The luxury hospitality sector in Switzerland is experiencing significant growth, a stark contrast to the recent developments surrounding Orascom Development Holding (ODH) and its impending exit from the Swiss Stock Exchange. As the famed luxury resort, The Chedi Andermatt, continues to attract guests, ODH finds itself departing publicly traded markets under less than favorable circumstances.
Notably, the owner of The Chedi, Andermatt Swiss Alps, which is partially held by the Sawiris family, reported a remarkable profit increase in the final quarter of 2024, doubling its earnings to 10.4 million Swiss francs. This uptick was driven by strong performance in its real estate segment, particularly benefiting from special exemptions associated with Swiss property regulations, allowing the resort to secure its position as one of the few luxury residential providers in the region.
Despite these promising numbers, ODH’s public equities journey is set to conclude with the approval from SIX Exchange Regulation for its delisting, effective June 5, 2025, with the last trading day slated for June 4. This decision culminates a public listing that began in 2008 with much fanfare, as initial share prices soared to 152 francs amid expectations of robust growth. Over the years, however, performance has deteriorated significantly, leading the company’s stock value to hover below five francs for an extended period.
In early 2025, the Sawiris family executed a buyback of most publicly traded shares at 5.60 francs, approximately 40% above the prevailing market value. This move secured their ownership stake to over 97% without compelling any shareholders to sell. The official rationale provided for the delisting underscores a desire for streamlined management free from the obligations tied to being a publicly traded entity.
The decision to withdraw from the public market has left many small investors who participated in the initial public offering facing considerable financial loss. The optimistic projections linked to ambitious projects in Andermatt have not materialized to the degree anticipated. Even a capital increase in 2022, which set the stock price at 7 francs, failed to rekindle investor confidence.
Contrasting ODH’s challenges, the Swiss luxury hospitality sector is witnessing an unprecedented boom. New ventures, including the Appenzeller Huus in Gonten and the establishment of Mandarin Oriental hotels in Zurich and Lucerne, reflect mounting confidence in Switzerland as a premier luxury travel destination. This surge is underscored by a record-breaking 41 million overnight stays tallied in 2023, primarily driven by international travelers seeking the allure of Swiss luxury.
Investors such as Silvio Denz, Peter Spuhler, and the Niarchos family have committed substantial investments to renovate and elevate historic establishments like the Kulm in St. Moritz, Hotel des Trois Rois in Basel, and Florhof in Zurich. However, the ongoing luxury hotel business remains a demanding landscape, as highlighted by the Dolder Grand Hotel in Zurich. The establishment recorded a modest operating profit of 4.8 million francs for 2024, largely due to a debt waiver from its ownership, a practice not uncommon in the upscale segment, where operational revenue often struggles to cover significant capital investments.
As Orascom exits the public eye, its future developments in Andermatt will unfold without the scrutiny of quarterly reports or the fluctuations of a stock price. This mirrors a broader trend in the luxury sector, with leaders like Silvio Denz stepping away from public exchanges as well, reflecting a strategic retreat into private investment avenues that promise greater control and potentially more sustainable growth.
In summary, while the luxury hotel market in Switzerland thrives, characterized by high-profile investments and an influx of international guests, Orascom Development Holding’s departure from the Swiss Stock Exchange serves as a sobering reminder of the complexities and challenges that can arise in the world of finance and investment. This dichotomy showcases the resilience of the luxury sector even as individual firms navigate turbulent waters.