Country Article / Postcards
Switzerland's Best Hotel--Discounted
Date: 06/21/2005Dear International Living Reader,
There's a valuable lesson to be learned from the oil sheiks who have invested in Switzerland; they know that the Grand Hotel Victoria Jungfrau company (VIJN.Zurich) owns and operates quite simply the best luxury hotel in the whole country.
The group's newly refurbished spa in the Bernese Oberland has recently won many awards, and the rooms at the front of the hotel enjoy the very best view of the Jungfrau Mountain. While some visitors to the region are happily shelling out 760 Swiss francs ($600) for the cheapest room, others have found a way to get into one of the Grand Hotel's finest rooms at a much cheaper rate: if you own shares in the company, you get a 20% discount.
Because a number of Swiss investors have bought shares in the group in order to make the most of the discount, the share price is now largely detached from the company's actual value. At a share price of 225 Swiss francs ($177), the P/E is a staggering 100 and even the value of the real estate doesn't justify the high price.
And guess who owns a large chunk of the hotel company? The Kuwait Investment Office: the oil sheiks bought a 23.8% stake in Grand Hotel Victoria Jungfrau back in 1978. It's been a splendid investment ever since.
Whether the sheiks are using the discounted hotel rate, too, I dare not say. Either way, there is something to be learned from the world's super-rich: the earlier you buy into this type of little-known investment opportunity, the greater your ultimate reward.
Beat Erni
For International Living
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