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Property: from boom to unbalance in tourist locations! Introduction For some years now there has been a genuine boom in the holiday properties market. Demand is still growing and is rapidly becoming internationalised. Entrepreneurs in the property market are investing in the best sites, in both new and traditional destinations. And they have developed new business models designed to make the acquisition of property as attractive as possible. The strength of this growth in the holiday property market is a major factor for development. At its best this growth makes it possible to create new tourism centres and to revitalise the often rigid and poorly utilised structures of the existing tourism regions. At its worst it results in under-utilisation of beds in the traditional hotel and parahotel accommodation sectors, as well as high rents for local residents. Discussions at the 9th edition of the Sommets du tourisme Chamonix-Mont-Blanc will focus on the opportunities and the risks involved in the property boom and in particular the strategies at the level of destinations that make it possible to maximise the benefits from development while minimising the negative aspects. We shall also be looking at the measures which the authorities who want to make the best of these strategies would do well to adopt.The questions we shall consider
There is strong demand for investment in the holiday property market and for the acquisition of tourism-related property. This is due to new demand for the kind of accommodation that allows flexible utilisation and offers the prestige that is now the order of the day. Entrepreneurs in the holiday property market are finding it easier to capitalise on this new demand thanks to favourable economic framework conditions including interest rates in the industrialised nations which are now at historically low levels. The attention of the holiday property market is now focused on the most attractive sites in both new and traditional destinations. The strength of demand does not only reflect a country’s level of development, but is increasingly international. Americans are investing in and purchasing residential property in the Rocky Mountains and Mexico. Certain Spanish coasts are hosting entire colonies of retired people from other nations. The tourism regions of France are also much in demand among people in search of holiday or retirement property. The construction of apartment blocks and other properties increasingly comes under the heading of foreign trade, or perhaps the “export” of property might be a more accurate description. In the trendiest tourism areas the gross value added each year by the sale of holiday properties amounts to 10% or more of the total gross regional product. This creates jobs that are much appreciated by the local residents.
Tourism accommodation is undergoing constant transformation. The motto of the major players is now innovation, as can be seen from their new business models. They are able to offer today’s clients exactly what they want. The aim is segmentation of the market. They make use of industrial methods as well as new forms of financing. The big hotel chains have both standardised and industrialised businesstourism accommodation. Second home salesmen offer their clients the prestige of luxury apartments with services – which is now the nec plus ultra of tourism accommodation. There is an international clientele for luxury properties, now known as “trophy homes”. Many of the post-war “baby boom” generation have made fortunes, which they increasingly invest in holiday homes in the most beautiful places on the planet. They soon identify entirely with their new home and whatever country and region they have adopted. The younger generations meanwhile are looking for homes that will allow them to lead a family life free of all constraints. Young people with shared interests often flock together, a notable example being “snow boarder” communities, and they look for accommodation that can cater to their special needs. The types of financing available in the holiday property market are increasingly varied. As well as the classical types of financing we now have property “by floor”, “time-sharing” and “fractional sharing”.
The rate of occupation of traditional hotel and parahotel structures in existing tourism regions is generally higher than is the case with second homes. However the services on offer and in particular the equipment and installations are often not up to modern requirements. The smaller hotels are no longer able to rationalise, cut their costs or to reinvest. And as for the existing stock of apartments, which often suffers from a low occupancy rate and an inability to renovate, the situation is now very serious. Being non-standard, they are not easy to place on the commercial market. Attempts to explain the difficulty of the situation for existing accommodation often refer to excessive building of so-called “cold” beds, which are rarely visited by their owners. These are clearly a negative factor for the local economy. Something needs to be done to make these empty beds economically viable. Even then however it would not improve the situation of the traditional accommodation sector, unless the latter were to succeed in transforming itself.
The concentration of holiday properties in the best sites leads to both negative and positive externalities, affecting visitors and residents alike. Certain agglomeration effects increase the number of installations, equipment and services while improving their quality. Resorts are transformed into attractive cities. The presence of tourists and the owners of second homes tends to improve the quality of life, giving rise to a multicultural society. However the negative agglomeration effects cannot be overlooked. These include the high prices being asked for the rental or purchase of houses and apartments in the best sites, and the problems that arise from the multiplication of private transport.
The future of the traditional resorts will not be assured by strategies that favour the maintenance of existing structures. Nor is it enough to slow down the construction of tourism-related apartments and homes. Much more important is an effort to combine the traditional types of accommodation with new forms, as is being done with success at resorts in France and the United States. In the context of efforts to rejuvenate the life cycle of existing accommodation it may prove necessary to attract investment in the new types of accommodation that offer a higher occupancy rate. These investments, which will have to overcome the problems associated with small company size, can provide a new source of profits to potential clients. The future strategies of destinations must include structural changes so as to encourage diversification in the accommodation sector, together with a more standardised product range.
The regional and local authorities have an important role to play. They can make it easier to get the full benefit from new housing and accommodation strategies in tourism regions. They should promote tourism by making it easier to invest in the types of accommodation that, with the appropriate management and marketing, can ensure a satisfactory rate of occupancy. These promotional measures need to be conceived in the framework of a master plan designed to stimulate and guide development of the tourism accommodation sector while taking into account the housing needs of the local population. The objective of such a plan must be to reduce the negative impact of the concentration of holiday properties, using both the tools of regional planning and fiscal regulations. To achieve the desired level of development in a market economy there is a basic principle that must be observed -- fiscal measures must be given preference over restrictions. But these measures must not be imposed on the holiday property market with too heavy a hand. Reinvesting this tax revenue could help to revitalise existing accommodation. Conclusions The 9th edition of the Sommets du tourisme Chamonix-Mont-Blanc will address these questions by means of interventions de principe, and in particular through the examples of successful innovation which we hope will stimulate creative imitation. These topics will be the subject of debates chaired by experienced media experts (experts with much experience of the media?) .
Prof. Peter Keller
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