Sani/Ikos Group is turning the notion of the all-inclusive on its head. With its collection of luxury-level coastal resorts in Greece and Spain, this integrated owner, developer and operator has charmed affluent fans of the beach holiday.
Ikos, the group’s growth vehicle, grew out of Sani, a luxury destination resort that sits on more than 1,000 acres on Greece’s Kassandra Peninsula. Opened in 1971, it has gradually expanded to include five hotels surrounded by a private forest, bird sanctuary and white sand beaches; 24 restaurants, 22 shops, 20 bars and five themed spas; and a private yacht marina.
“It’s a very safe environment, very upmarket, friendly and unique,” says Andreas Andreadis, Sani/Ikos’s CEO and son of Anastasios Andreadis, one of Sani’s co-founders. It’s also difficult to duplicate, he adds, because of strict waterfront development regulations and limited sites of a similar nature in Europe.
Sani/Ikos is owned by LBRI Group, formed in 2015 by Andreadis and his brother, Stavros, with the backing of Mathieu Guillemin, Oaktree Capital Management, Goldman Sachs Asset Management and Hermes GPE. The company is fully integrated: It owns, develops and operates its resorts and all the amenities. That control ensures a seamless experience for a sprawling resort like Sani.
Three Ikos resorts, each with 300 to 400 rooms, have opened in Greece since 2015. Upcoming developments include Ikos Aria, set to open on the Greek island of Kos this year, and the first resort in Spain, the former Costa del Sol Princess Hotel, which will be reborn in 2020 as the 400-room Ikos Andalusia following a €150 million (US$170.5 million) makeover.
Over the next five to seven years, Andreadis says plans call for another opening each year, which would double the size of the portfolio. The focus is on Greece and the Iberian Peninsula. “Because our clientele is mainly European, we prefer to be concentrated in these target countries that have the main source markets,” Andreadis says.
Strong numbers are driving that expansion. Together, Sani and Ikos properties generate ADRs of €400 (US$455), occupancies of at least 95% and 40% EBITDA.
Appealing to aspiring
The Ikos product is a downsized?version of Sani that offers a family-?friendly “infinite lifestyle” experience at an all-inclusive price. The elements of the flagship property: a stunning beach property, built or renovated to high standards; spaces and activities for three generations; five to eight buffet and a la carte restaurants with menus from Michelin-starred chefs (and the option to dine outside the resort); multiple bars; 24-hour in-room dining and all-day beach service, minibars, and use of a Mini Cooper for off-campus exploration.
And all-inclusive really means that, Andreadis says. “Nothing is priced. Our restaurants have sommeliers and wine lists with 300 labels; if someone wants Champagne, it’s free — as is 24-hour room service or the minibar. We believe this makes people feel much more free, relaxed and less stressed,” he says. “It’s a very high-end feeling, like Sani or a Four Seasons experience. But you aren’t signing bills.”
Guests who opt for deluxe accommodations enjoy larger rooms and suites and more personalized service, including a concierge who will line up restaurant reservations, spa appointments, preferred drinks and activities before arrival.
Ikos, Andreadis argues, is aimed at a substantial and largely undersupplied segment: aspiring luxury-to-luxury customers. With nightly rates ranging from €200 to €250 (US$227 to $284) in the low season to €2,000 (US$2,272) during high season, its appeal spans travelers with household incomes in the €100,000 to €1 million (US$114,000 to US$1.14 million) range.
“It’s like a small town,” Andreadis explains. “We are not only hotel operators, we are more like mayors running a dream municipality. We have to manage every aspect; we don’t have one company running the marina, another company running one hotel and a different operator running the restaurants or managing the sports clubs.” Centralized operations help managers prioritize items like restaurant reservations to ensure that VIPs get preferential treatment.
Ikos, similarly, presents a balancing act — how to provide 5-star service in high volumes? Designing a resort that can accommodate busy times, staffing up, providing a variety of spaces within the resort to support high volumes — those are keys to providing the type of relaxed experience guests seek. “The moment a client feels stressed in a buffet, an a la carte restaurant or a bar, the whole thing falls apart,” Andreadis says.
Sani/Ikos allots 3% to 4% of revenue to ensure properties stay fresh. “We invest heavily in keeping our assets completely brand new,” Andreadis says. “When the client enters the room, every fabric is fresh, every piece of furniture looks like it was just built. Every year we add new things — a new pool, a new club, another restaurant… Our customers love to see we are?reinvesting in our properties.”
The attention to detail and service show. “They are exceptional at what they do,” says Derek Gammage, non-executive chairman, EMEA, for CBRE Hotels Ltd., London. “The guest experience, the food, the quality of the room, the resort, the staff. It’s extremely good. We haven’t seen the likes of this in Europe.”
TripAdvisor’s 2018 Travelers Choice Awards ranked two Ikos resorts first and third best all-inclusive resorts worldwide. Mark Pallister, a commercial manager at British Airways Holidays, says Sani/Ikos always scores high on customer satisfaction among the clients he sends to the properties. “They very much pride themselves in offering a very high standard of family holiday experience,” he says.
Growing presence
Arguably the trickiest hurdle to growth is finding suitable development sites. “We want beachfront properties, and greenfields are very difficult to develop because of environmental restrictions,” Andreadis says. So existing hotels located in a sunny climate, near airports with at least 1.5 million inbound passengers, and on parcels of at least 25 acres, are targeted. Sani/Ikos typically purchases the property, strips it down to concrete and rebuilds with the Ikos style and finish quality in place.
That ability to reimagine an existing property is an art. “They bought a Club Med, and watching how they created something pretty quickly from a tired and old unit was amazing,” Gammage says. “What sets them apart is the vision that allows them to take something that was yesterday’s news and create something that fits their resorts.
”One key at this stage is concentrating on known holiday destinations with built-in demand. “Resorts with a recognized name give us an advantage — they are appealing for families, and it’s better than going to a less-known location. But we think as the brand expands, we can go to less well-known locations,”Andreadis says.
Another challenge is labor — these are labor-intensive developments. A typical 400-room Ikos resort employs a staff of 700 to 750, and it’s one reason Ikos’ development pipeline is confined to Greece, Portugal and Spain. Higher labor costs in Spain are offset by good airport access, tourism infrastructure and climate. There’s demand for a product like this in France, Andreadis adds, but labor regulations and high wages make development there unfeasible.
The other labor hurdle is seasonality, a roadblock for many major hotel operators. Ikos properties stay open seven to eight months of the year. That abbreviated schedule means a lot of pressure to keep rooms filled. “The only way you can make money (with a seasonal property) is if you operate at full capacity,” Andreadis says.
Staffing is an issue as well. Staff members are paid for two months off, according to EU laws, and during the season their housing and meals are part of their compensation package. But they work very hard, typically six days a week.
Going forward, Andreadis is bullish on Ikos’s potential beyond the Mediterranean. He thinks positioning Ikos as an “infinite European lifestyle” concept is worth consideration. “Who doesn’t like the European lifestyle?” he asks. “It could be very successful in the Caribbean, in China, in Dubai.”
Joint ventures, local partners and franchises are a possibility. “We have to be careful, because we don’t want to compromise the quality,” he explains. “With a good partner, we can’t imagine why something like this can’t be done outside the Mediterranean. There’s a huge appetite for this type of product.”