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Population: 4,200 Altitude: 1,000 metres Area: 170 sq km Nearest airport: Salzburg

“When I was a child, Bad Gastein was what I imagined Manhattan must be like,” says Olaf Krohne as he strolls along a promenade that winds through the Austrian spa town of about 4,000 residents. He gestures up to the belle époque hotels that rise high above us. “From the very first time I saw it I was amazed by the buildings.”

As strange as it might sound, it’s actually possible to see what he means. About 90 minutes from Salzburg by train, Bad Gastein is nestled in the Hohe Tauern mountain range in the Alps. The town is arranged around a waterfall that runs through its centre with dozens of grand hotels, built around the turn of the last century, stacked up and staggered along the steeply tiered cliff face. Looking up from the square near the base of the waterfall, the structures rise high into the air like skyscrapers; you have to tilt your head all the way to see to the top.

It’s a captivating sight amid the mountains and one that Krohne, a trim 42-year-old hotelier from Germany, found hard to forget. As he grew older he returned to Bad Gastein again and again, enchanted by the spot he describes as the “most urban place in the Alps” thanks to its architecture and glittering history. Though he found success opening restaurants and hotels in Hamburg and Copenhagen in the 1990s and early 2000s, he was always drawn to the idea of returning to Bad Gastein. When, in 2009, the opportunity to take over the 32-room Regina Hotel came up, Krohne jumped at the chance. “I just thought I could create something here.”

Bad Gastein is a town built on tourism. Though it first began to expand during a gold rush in the 16th century, it was the town’s thermal springs and their purported healing powers that proved the real draw. Spa treatments, known as “the cure”, were thought to help with a range of ailments, including ageing itself. They attracted European royalty and statesmen, such as Austria’s Franz Joseph I, German emperor Wilhelm I and Otto von Bismark, who became regular summer visitors eager to wade in the town’s restorative waters.

By the late 19th century a thriving industry had been established. Two hotel families in particular dominated the town: the Straubingers and the Windischbauers. The two dynasties were responsible for construction of several of the spa town’s most resplendent structures. They were also bitter rivals, each wanting to outdo the other with both the number and the magnificence of their hotels.

“My great-grandfather had 12 children and he was determined to build a hotel for each child he had,” says Georg “Nonno” Kaltenbrunner, a descendent of the Windischbauer family. Sitting beside him is Uki Bellman, a descendent of the Straubinger family and one of Nonno’s dearest friends, despite their ancestors’ rivalry. A smartly dressed, rotund gentlemen with impeccable manners, Nonno is now retired. Bellman, who is 78 despite looking much younger with a brown bob and blunt fringe, still operates the six-room Villa Hubertus, which was opened by her grandfather in 1908.

Though the Straubinger and Windischbauer families saw unlimited potential in their expanding empires, 1914 saw tourism grind to halt. “During the First World War the hotels didn’t collapse, the clientele did,” says Bellman sadly. Decades of decline and uncertainty followed. After the Second World War the town built its first ski lift, which saw a boost in winter visitors. The summer season, however, struggled to return to its pre-war popularity.

By the 1980s spa treatments had fallen out of fashion and overnight stays had dropped off dramatically. Yet, despite the steep decline in tourism, few hotel operators seemed willing to adapt. The combination proved disastrous and several of Bad Gastein’s magnificent hotels fell into decline; others went bankrupt and were abandoned. Even the town’s most striking venue, the Grand de l’Europe Hotel, an 11-storey work of splendour built in 1909, was shuttered. (Many Gasteiners today believe the hotel was the inspiration for Wes Anderson’s Grand Budapest Hotel though the director has said that a Czech hotel inspired his film’s centerpiece.) The Grand de l’Europe has since reopened yet just 20 per cent of the rooms are in operation; the opulent foyer stands empty and unused.

Though the ski season and the thermal springs ensured that there was always a trickle of guests – an odd mix of the very fit and the very old – the town was largely thought of as a dusty relic, if it was thought of at all. Yet the blend of stunning natural beauty and majestic architecture remained. For Krohne, Bad Gastein always represented glamour, if of the faded variety, and he sees plenty of opportunity here. “The Regina Hotel is just the start,” he says. When he moved in “it was more traditional, a bit kitsch, a bit dusty. But it was a real sleeping beauty.” During the past few years he has transformed the 101-year-old building into an elegant boutique hotel complete with a sauna, spa and cinema; an urbanite playground where city-dwellers can get away and still feel at home.

Along with partner Jason Houzer, a former fashion director from Munich who helps to run the hotel, Krohne began inviting everyone he knew in Hamburg, Berlin and Munich to come to stay, throwing large parties to introduce people to Bad Gastein. The duo didn’t just want to transform the hotel: they wanted to transform the town. “We want to see a renaissance of Bad Gastein,” says Houzer.

In that, they are not alone. Ike and Evelyn Ikrath opened Miramonte, a 36-room boutique hotel in a former bank that sits high up the cliff face, in 2009. Ike, an architect from Linz with thick black glasses and a mane of wild white hair, came to Bad Gastein with his wife, who was born here to a hotel family. The Haus Hirt, a smartly designed 29-room hotel that’s a 10-minute drive from Miramonte, was owned by Evelyn’s parents before she took over in 2000. The couple now run both hotels along with the newly opened Alpenlofts, a cluster of apartment-style chalets.

Standing in the dining room of Miramonte, where long communal tables are lined with Bertoia chairs and books on art and design fill shelves on the wall, Ike and Evelyn fizz with energy when discussing the potential of Bad Gastein, exchanging ideas and talking over one another. It’s a common trait among people here. “There is a small group of like-minded people, including Olaf and Jason, who work together,” says Ike. “We are shaping the town.”

This new generation of hoteliers see themselves as heralding a modern era in Bad Gastein. And unlike the hoteliers of the town’s past, this new group believes their businesses – and the town itself – thrive when they co-operate. Several times during our visit we hear people referred to as the “dreamers and doers” of Bad Gastein. It’s an unofficial, slightly schmaltzy slogan that’s used to describe those who are bringing an entrepreneurial spirit to the town.

The phrase applies to nobody more than Jan Breus and Stefan Turowski. After years of working in creative industries in Berlin – Breus was a fashion stylist and Turowski was a theatre press rep – they learnt of an opportunity to run the Waldhaus Rudolfshöhe, a cosy four-room hotel high up in the mountains, away from the centre of Bad Gastein. “Three weeks later, we packed our van,” says Turowski with a nonchalant shrug as he pulls a beer from the draught tap behind the bar in the Rudolfshöhe’s dining room.

The pair set to work updating the hotel’s dated rooms, adding their own collection of art and mid-century furniture to the space to get it ready for its June opening. Though neither Turowski nor Breus had run a hotel before, both are sanguine about their move – even as they hunt for a chef after the one they had lined up unexpectedly quit before the summer season. “Berlin is over,” says Breus cheerfully, cinching an apron round his waist as he heads to the kitchen. “Bad Gastein is now.”

That optimism is reflected in a burgeoning creative scene here. In 2011, Andrea von Geotze, an art collector from Hamburg, launched the Sommer Frische Kunst (a summer art festival), as well as an artist residency. In September this year, Ike and the performance artist Friedrich Liechtenstein are starting the first film festival, dedicated solely to vertical cinematography in homage to the heights of Bad Gastein itself.

Chronicling the cultural offerings in the town is the Grand Tour Traveler’s Journal, a glossy magazine dedicated to life here. Alexander Kellas, a creative director from Graz, and Nina Prehofer, a writer and editor, have long enjoyed coming to Bad Gastein and they launched the biannual magazine in 2013. “We wanted to be ambassadors for Bad Gastein,” says Prehofer. They printed 16,000 copies of the first issue – and 100,000 of the third – distributing them in cities across Austria and Germany. “It was something new,” says Kellas. “For 10 years the newspapers and media were just bathing in the town’s decline and death. It was like necrophilia.”

Yet Bad Gastein undeniably still faces challenges. Though the town has more than 8,700 beds across its hotels, guesthouses and b&bs, it only racks up 1.1 million overnight stays per year, which means the occupancy rate for the town is about 30 per cent. Many of those stays are in the winter season. Then there’s the cluster of buildings and hotels, including the Hotel Straubinger, that remain abandoned, blighting the town’s historic core. A Viennese developer started buying up the buildings from the cash-strapped municipality in the late 1990s with promises to redevelop them; they’ve stood empty ever since and attempts to purchase them have been rebuffed.

Like many historic towns, Bad Gastein has been largely resistant to change. In the late 1960s the Austrian modernist architect Gerhard Garstenauer was commissioned by the then mayor for a series of projects in the town, including a new spa. Though it proved popular, his brutalist congress centre in the main square, completed in 1974, did not.

The concrete structure stands in stark contrast to the regality of the hotels surrounding it and has divided opinion for decades. Lack of maintenance saw it closed in 1999; it was bought by the same Viennese developer and has since fallen into ruin. Some, like Krohne and the Ikraths, dream of seeing it transformed into a museum or arts centre. Others would like to see it razed altogether in order to preserve the town’s more refined ambience.

“I just wish it was being used,” says Thomas Tscherne, the owner of Hotel Weismayr, which overlooks the crumbling congress centre. “If it was, the building and the centre would be alive. It wouldn’t look so mean.” Tscherne and his hotel – both of which could be described as traditional; the hotelier dresses in lederhosen on a day-to-day basis – are at a disadvantage next to the abandoned buildings. They give the Kaiser Franz Josef Strasse, the town’s main drag, a desolate, haunted atmosphere.

Though a clutch of hotels do offer good food and thriving bars, much of the action is tucked away in the guesthouses. The steep, winding streets of Bad Gastein can often feel a bit empty. Houzer confesses that he’d love to see “a great sushi restaurant” or other culinary offerings available in town.

Yet even today there are some Gasteiners who resist the idea that the spa town needs to adapt – or that it should be shaped by outsiders. A born and bred Gasteiner told us that he was sceptical of the spa town turning into what he dubbed “the Berlin of the Alps”; some of the older hoteliers have also been wary of the idea of attracting a new crowd.

They might not have much choice. Sitting in the dining room of the Regina, Krohne and Houzer sip cappuccinos and make plans for the upcoming summer season; guests from Japan, New Zealand and Canada, in addition to the regular stream of Austrians and Germans, have already begun to arrive.

Out the open window, the peaks of the mountains rise higher than the belle époque hotels; the steady sound of the waterfall can be heard even from here. It’s a setting that guests have been enjoying for more than a century. If Krohne has his way, people from all over the world will continue to savour it for decades to come. “The way to the new Bad Gastein is to always progress and evolve.”

BAD GASTEIN DIRECTORY

The top spots to bed down for the night, get a cup of coffee and attend an alfresco yoga class.

Stay

The Regina Hotel: Updated in 2009 by German hotelier Olaf Krohne, this hotel makes a persuasive case for Bad Gastein’s revival. With 32 rooms – many of which have balconies with views of the town centre – the hotel has an intimate atmosphere while also providing all the amenities needed for a comfortable stay away from home, including a cinema, library, sauna and steam room. The large windows in the cosy dining room provide panoramic views of both the town’s grand hotels and the Alpine peaks. The bar stocks an excellent selection of Austrian beer and wine.
5 Karl Heinrich Waggerlstrasse
+43 6434 2161
dasregina.com

Miramonte: Opened in 2009 in a converted bank, Miramonte is a boutique hotel and health retreat in one. A mix of mid-century furniture and original hardware from the bank gives the space a polished setting while spas, saunas and yoga studios provide ample resources to relax. We recommend sitting on the terrace at sunset, drinking in the sights – and maybe a cocktail or two.
3 Reitlpromenade
+43 643 425 770
hotelmiramonte.com

Haus Hirt: The sleek older sister of Miramonte, Haus Hirt is the place to go if you’re travelling with children but don’t want to forsake the smart setting (a pool and childcare services ensure that parents get a break too).
14 Kaiserhofstrasse
+43 643 427 970
haus-hirt.com

Waldhaus Rudolfshöhe: Remote even by Bad Gastein standards, the Rudolfshöhe is tucked high up in the mountains above the town. Nestled in the forest, the cosy four-room guesthouse is warm and charming and has stunning views.
1 Hardtweg
+43 643 420 446
rudolfshoehe.at

Hansi Hansi Bed & Breakfast: Open only in the winter season, Hansi Hansi is run by 23-year-old chef Felix Schellhorn who inherited the bed and breakfast from his grandmother (Hansi is his grandfather’s name). Expect eclectic rooms designed with an artistic eye.
15 Pyrkershöhenstrasse
+43 6434 2200
hansihansi.com

Cafés

Blonde Beans: Conveniently located across the street from the train station, Blonde Beans was launched by two Swedish women in 2015. This cosy spot serves up Johan & Nyström coffee, smoothies and a selection of sandwiches and baked treats, as well as wine.
4 Bahnhofsplatz
+43 664 364 6655
theblondebeans.com

Don’t miss

Felsentherme: Built in the late 1960s by Salzburg modernist architect Gerhard Garstenauer, these thermal baths have been expanded to also offer saunas, massage treatment rooms and outdoor pools. Luckily the original pool, built right into the mountain, remains largely untouched.
5 Bahnhofpl
+43 643 422 230
felsentherme.com

Pavilion Kaiser Promenade: Owned by hoteliers Ike and Evelyn Ikrath, the space is used for visiting exhibitions, galleries or pop-up restaurants. Check out what’s happening during your stay.
10 Kaiser Promenade

Gastein Museum: Tucked inside the Grand de l’Europe Hotel, this museum explains Bad Gastein’s rich and colourful history. It also offers walking tours for those who’d prefer to see the town’s story up close.
1 Kaiser Franz Josef Strasse
143 6434 3488
gasteinermuseum.com

Open space

Sportgastein: While the suspension bridge at Stubnerkogel is a tourist favourite, for open spaces we prefer the challenging hiking trails from Sportsgastein, which is a short bus ride away from Bad Gastein’s centre.

Exercise

Yoga: Pilates and yoga lovers are spoilt for choice here, with many hotels offering their own studios and regular classes (check out Miramonte or Haus Hirt). But a particular favourite are the outdoor classes held beside the waterfall in the town centre.
12 Kaiser Wilhelm Promenade
+43 643 2339 3225

Essentials

Don’t forget to pack your trainers; even the most casual stroll through the streets of Bad Gastein can feel like a hike due to the steep terrain.

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