Over the past six years, iO has established Sun Gardens Dubrovnik as one of the leading beach destination resorts in Europe. The resort, which has 408 keys, a world class spa, sports centre and extensive food, beverage and other resort amenities, has won numerous awards and whilst under iO’s management has been ranked by Expedia among the top 30 resorts in the world.
iO has also established one of the only successful resort based real estate sales programme in the Adriatic, with the completed first phase completing sales of 71 residences at over €4,000 per m2, at price points ranging from €170k - €800k per unit and achieving 10%+ annual absorption rates. iO was awarded Best European Developer in 2012 and 2013 by Overseas Property Professional and the project won Best Residential Development in Croatia in 2015 at the International Property Awards.
In April 2017, iO relaunched Sun Gardens Dubrovnik as an independent destination resort, affiliated to Leading Hotels of the World.
The performance of Sun Gardens Dubrovnik has improved significantly since iO took over direct day to day management from the incumbent international operator in 2011, by switching from a management agreement to a franchise agreement. Since making this change and under iO’s guidance, the resort has outperformed the domestic competitive set and has been repositioned to sit amongst the leading destination resorts in Europe. This is demonstrated by a material uplift in a number of key performance metrics in financial results, guest satisfaction and service quality scores. These improvements have been achieved through a combination of the following key initiatives:
- Dynamic yield and inventory management e.g. optimal pricing through high, shoulder and off peak demand, broadening high end sales and distribution networks, leveraging SEO (online search engine optimisation), SEM (search engine marketing) and CRM (customer relationship management) opportunities
- Improved contracting e.g. reducing reliance of wholesalers and traditional tour operators, building relationships with higher yielding partners, closely aligning with luxury travel agents and tour operators, ensuring that distribution and sales networks used clearly align the Resort with other leading luxury resorts and hotels in Europe, North Africa and the Middle East
- Reshaping business mix to optimally align with changes in seasonal demand, focusing on segments which generate the highest opportunity for revenue and profit at different times of the year
- Clear segregation and differentiation from the domestic market and competitive set, to reposition the Resort amongst the leading hotels and resorts internationally
- Seasonal extension through the effective targeting of special interest groups and conference business during shoulder and low seasons
- Tight cost control over payroll (flexible headcount, training, efficient rostering and minimal overtime) and purchasing, in particular food and beverage supplies
- A disciplined preventative maintenance programme coupled with selective investment in capex and other property improvements
As a result of these initiatives, in the period 2011 through to end 2016, iO has achieved annualised growth in RevPAR in excess of 10% and delivered in excess of 5 times absolute growth in GOP. iO has also introduced significant uplift in guest service standards and quality scores, to comply with Leading Hotels Quality Assurance Standards, as a result of which Sun Gardens Dubrovnik is now ranked at a level equivalent to many of the world leading hotels and resorts. As a consequence of increased and enhanced awareness in Europe, North America and the Far East in particular, the resort now has a guest profile network which extends to over 130 nationalities.
iO has also established the residence sales programme at Sun Gardens Dubrovnik as arguably the most successful vacation residential scheme in Croatia and one of the best in Europe, when measured in terms of price achieved per square metre, absorption rate and benefits offered to owners through the home ownership arrangements. The programme is designed to leverage sales at above prevailing market benchmark prices by combining a compelling investment opportunity with associated home owner usage and lifestyle benefits, which has successfully differentiates the residences at Sun Gardens Dubrovnik from competing product in southern Europe.
iO has an established global network of brokers which are well connected to prospective buyers interested in the region. This is supplemented with proven direct marketing and lead generation programmes e.g. web, PR, advertising and direct mailings. The programme delivers a high proportion of direct sales, contributing to further reductions in the overall costs of the sales programme, as prospects buy into the purchase opportunity during their stay at the resort.
iO therefore has a deep understanding of the close interplay between resort operations and real estate sales and also the importance of ensuring that the legal and administrative framework is seamless and user friendly from the buyer’s perspective, including mortgage product if required. iO has established a successful residence rental programme at Sun Gardens Dubrovnik, achieving gross yields in excess of 7% per annum to owners generating an average of 25 weeks rental (48% of occupancy) over a 12 month basis in a seasonal resort destination.