So, what do you do if you have an idea and a location for a hotel, the market opportunity appears clear and your demographic is hungry for it, but the territory is too small and there may be environmental considerations? The answer from Sunborn, a private company in Fin- land owned by the Niemi family, is simple – put it on a luxury yacht.
It’s this model that has led to the presence of the Sunborn Yacht Hotel, which will open in early 2014. Entrepreneurs will recognise a number of the business drivers behind setting up in this way. The company’s research suggested there were around a million hotels in the world, and although quality can be very high, only a handful of them could be described as “unique”; target a high-end customer base and add the notion of a luxury yacht and you automatically have a good fit.
You also have the benefit of a totally movable asset. “We’re completely com- mitted to mooring off Gibraltar and working there,” says Hans Niemi, executive director of Sunborn. “But it’s reassuring that if any of the territories in which we operate, from St Petersburg to Lon- don, had a changing requirement, we could change to a different yacht.” He stresses that his market research suggests this won’t be necessary.
Movable feasts like this have other ad- vantages as well. They can be put up when land would otherwise be unaffordable. It’s no small expense to put a luxury yacht in place next to Gibraltar’s Ocean Village, but it would cost considerably more to try to buy the land for a hotel of similar stature. Not that buying the land would be possible: “Gibraltar is six square kilometres in size, so the land to build a facility like this simply wouldn’t be available,” says Niemi. This is also useful when it wouldn’t be possible to build a fixed structure for other reasons: in Venice, for example, it would have been difficult if not impossible to build a hotel next to some of the major heritage buildings, and in St Petersburg, a modern building next to the Hermitage would have been difficult – if not downright undesirable. Substantial luxury yachts over- come these objections and make the in- vestment that bit more solid. On leaving a territory, once the electricity and other service supplies are unplugged and unplumbed, there is no residual environmental footprint.
“Beds on board: accommodation in Gibraltar will be increased by 31 per cent”
Sunborn believes the yacht hotel will appeal to a demographic that’s already visiting Gibraltar but which isn’t staying there as much as the Tourist Board would like.
There are four flights into and out of the Rock per day, but a lot of travellers, particularly in the business market, end up crossing the border into a Spanish hotel – spending their money on Spanish entertainment in the evening. The Gib economy is robust, but nobody can afford to turn business over to the neighbours in quite this cavalier way. “According to official figures, on arrival in Gibraltar, 61 per cent of visitors cross the border and sleep somewhere else,” says Niemi. “We’re aiming to do something about that.”
The owners will be pitching the yacht towards the event market – weddings and bar mitzvahs, of course, but primarily to conferences. It will prosper if it is just the UK that takes advantage of it; obviously the owners hope nationals of other countries will follow, but the UK’s direct travel links offer an obvious advantage.
This is why there has been such interest from the MICE (Meeting Incentives Conferences Exhibitions) industry, which in the UK alone is worth £20m. “The challenge had been that there was nowhere for the MICE industry to hold its events,” says Niemi. “Sunborn Gibraltar will fulfil that. Almost purely as a result of last July’s Meetings Show UK, we attracted several million pounds-worth of corporate inquiries in just five weeks, which bodes very well for Gibraltar plc.” There will, of course, be corporate deals on offer
– The headline price will be more expensive than local hotels, but the managers maintain value will be at least equivalent. The financials should add up not only for conferences requiring accommodation, but for day-tripping conferences as well – you leave the UK in the early morning, have a conference on the Med, come back in the evening and the investors will be pleased enough. This is why, whereas most hotels budget their business plans on 20 per cent income coming from conferences, Sunborn’s dedication to MICE is going to be significantly higher. Zero VAT makes the pricing structure simple and the mooted return of ferries to North Africa will improve the appeal of the peninsula as a destination overall.
No matter what the Gibraltar Tourist Board and tourism minister manage by way of appealing to visitors to stop longer than a day, Gibraltar currently has an in- built ceiling. Fill 650 beds and you have no hotel space left. Sunborn will not only add the first five-star accommodation to the territory, but it will increase the total accommodation available by 31 per cent. It is to be hoped that changes to transport and other logistics discussed elsewhere in this supplement will keep pace.