Julian Houchin is the Director of iO Adria, owners of the Sun Gardens resort in Dubrovnik. Julian has worked in the tourism industry for 28 years and prior to joining iO Adria in 2007, Julian was with Cendant Corporation (now Wyndham Worldwide) where he held the roles of Managing Director and Business Development for NorthCourse Leisure Real Estate Solutions.
Seasonal demand for any resort operator is a fact of life and driving business throughout the year is the secret to success. Resorts by their very nature have periods of low and high occupancy, and established resort operators will know their demand patterns so that they can maximize their yield through the relatively limited peak period. Typically, resorts will generate up to 80-90% of their annual rooms revenue within a rather short period, which begs the question, what can resorts do to sustain occupancy levels and generate revenue throughout the year and reduce what I like to call the availability rate by extending the season? In many instances, hotels in resort destinations will prefer to close out of season, as operating on a full 12 month basis does not make commercial sense.
TAKE A PROACTIVE APPROACH
This is quite a common case in Dubrovnik, as the opportunity to drive occupancy is typically hindered by reduced airlift outside peak and shoulder seasons. Other seasonal resorts face similar external factors (such as lack of snow), but it is encouraging to see that many have evolved and taken a proactive stance, such as the ski resorts of Europe and North America, many of whom now offer a variety of summer activities. Mountain biking, snowboard hybrids, open air concerts, hiking and yoga at 11,000 feet enable these resorts to extend their offerings into the spring and summer.
As developers and operators of the luxury five star Sun Gardens resort in Dubrovnik, we adopted a similar proactive approach to our business model. We set about creating Croatia’s premier destination resort, located 11km from Dubrovnik’s old town, that would compete with similar integrated resorts across Europe. We took a simple view that if we developed a luxury waterfront resort in one of Europe’s fastest growing tourism destinations, and developed an extensive resort amenity range, we would attract families and guests during the peak season, keep their wallets in-resort during their stay and also attract business out of season.
ADAPT YOUR DESIGN ACCORDINGLY
Subsequently, a lot of thought and planning went into the design of the resort which comprises a 201 room five star Radisson Blu Hotel, 207 one, two and three bedroom residences with gardens and sea views, three outdoor swimming pools, up to 16 different food and beverage options including a night club, an award-winning spa by OCCO, a comprehensive sports facility including tennis, squash, climbing wall and five-a-side floodlit football pitch. We also boast an in-resort grocery shop and retail promenade, a beach with a variety of watersports, a small transit marina for ferrying guests to and from the old town of Dubrovnik and the Elafiti Islands, a kids club and one of southeastern Europe’s largest and most flexible conference facilities, all of which is enclosed within in a mature landscaped environment, hence the name of the resort.
Such an extensive amenity range helps us to strengthen our peak periods of occupancy, ensuring that we operate at full capacity from June – September, but it also enables us to extend our season by targeting different segments of the market. This has resulted in our ability to capture and often exceed our fair market share out of season. Our award-winning spa, for example, has been popular with spa break operators and spa enthusiasts alike, and having listened to our customers and general demand, we have recently introduced detoxification and winter short break programmes which has helped attract business out of season. We now have groups of guests who visit our resort solely to enjoy the spa experience during the winter months. Furthermore, we have also introduced a spa and sports membership for local residents who typically use the facilities out of season.
Having one of the largest conference venues in the region has enabled Sun Gardens to also establish itself as one of Europe’s leading conference resort destinations and has resulted in us hosting many conferences and incentives for some of Europe’s leading companies. We have worked extensively to broaden our shoulder and low seasons by working closely with the MICE sector and have successfully hosted a variety of product launches this year, including a car launch for one of Germany’s top car brands. The event took place in January which is very much our low season. Our conference business has contributed to attracting a broad and diverse mix of nationalities, resulting in over 143 different nationalities visiting the resort throughout the year.
LISTEN TO FEEDBACK
Over and above the ability to capitalise on the resort infrastructure in order to promote low and shoulder season business, we also listen carefully to the demands of our customers so that we better understand what might attract them to the resort during other periods throughout the year. Such feedback has resulted in the creation of packages that include school half term holidays during the months of February and October, tennis clinics with our
in-resort tennis pro in shoulder season and gourmet cooking lessons with our head chef in October. We also look to the local and regional “drive to” markets to target short break and weekend getaways and have grown our business from these markets, particularly during winter months and over Christmas and New Year.
Having launched whole-ownership residential sales of our residences at Sun Gardens Dubrovnik 18 months ago, we now have nearly 50 owners, many of whom like to visit the resort during the quieter winter, spring and autumn months. This naturally presents an opportunity for incremental food, drink and room revenue spend as several of our owners like to bring groups of friends with them. Furthermore, we typically use the low and shoulder periods to invite pre-qualified real estate prospects to visit the resort on special promotional offers, thus further generating room and revenue opportunities.
Like many resorts, good inventory and yield controls will ensure a strong performance during peak season. The challenge for all resort operators is to continue to be creative, listen to market feedback and react accordingly to grow the shoulder and low seasons which, with a proactive approach, will steadily reduce the overall availability rate during these challenging months.