New horizons and new businesses in the world of hospitality and resorts

Since ancient times, investors have been looking for business models that, adequate to a risk margin that they can afford, satisfy the maximum possible return. Especially in times of volatility, the search for real proposals with attractive possibilities of profitability in the short-medium term are on the rise, that is, we increasingly reward more in a world in which everything was for yesterday that the return on our investment is in terms of time the sooner the better.

We could say that the most popular and considered bets today are due to three key factors:

The profitability-risk binomial: nothing new, a self-respecting entrepreneur knows that any project carries risk and that, depending on the degree of said risk, profitability varies. That of “No risk and maximum profitability” we all know that neither exists nor should it ever be said. A low risk bet is inexorably linked to a conservative return, a risky bet brings with it, if the business works, an attractive return. Finding the middle point according to the pocket and the spirit of the entrepreneur and the investor (sometimes the same person, sometimes not) is synonymous with success and above all sustainability over time.

ROI: The return on invested capital is or should be the guideline for any new idea put into practice. “How long will it take me to recover the initial capital and start counting net profit?” It is one of the questions that every entrepreneur/investor should ask themselves and know how to answer without hesitation. Not knowing how to answer this question means building a giant with feet of clay. For this, it is always good to either observe how similar companies have done it or develop a project already tested by third parties and have solid data in this regard.

The IRR: the axis that makes everything turn, the internal rate of return is what will make the money arrive and flow or what will make possible interested parties discard a project, not because of its viability but because of the profits that it implies given the investment To make.

No self-respecting project escapes these three rules. There will be more, but these three are the Sancta Sanctorum to take into account when making serious decisions, beyond the attractiveness of an idea. We could say that if a project does not have a correct estimate of these three factors, it is not a project, it is a good idea, and the business cemetery is full of good ideas, some of them without having seen the possibility of being executed. And the hotel and resort world is no exception.

Skybubbles was born from these three premises, a brand that began its journey in 2016 and that today is already established on 4 continents and in more than 22 countries.

What are Skybubbles? From the outset we could say that a different way of interpreting the space of luxury rooms.

Starting from 3 clear questions:

Why do 4 walls have to separate us from our surroundings when we think of a room?

Why does talking about experience with nature have to imply the idea of giving up comfort yes or yes?

Can you disrupt a world as consolidated as that of luxury hotel and resort stays?

And inspired by Walter-Muller, a French architect who promoted a new way of understanding classic construction in the 1970s, the Skybubbles are a purely visual product, difficult to describe in words, since talking about bubbles as luxury rooms or a novel experience would be talk about the tip of the iceberg of this concept that definitely comes to change many things.

But going back to the beginning of the article, any revolutionary idea is fine until it lands on the pitch, where all the strategy and planning must face all the benefits that at the moment are only provided in an Excel table. That is when the Rabassa brothers in 2016 stop thinking and decide to act.

Studies say that 95% of the brands that are born today disappear during the first 5 years, in these 6 years already changing the world of high standing stays in Skybubbles can already draw conclusions about why this brand shows strength and a heady future prospect.

For the Rabassa brothers, the first and fundamental thing, although it seems obvious, has been to clearly define who their client is, a conclusion they have reached through a mixture of forecasting and market experience. They know perfectly well that their two typical clients, what marketers call Buyer Persona, are entrepreneurs with experience in the hotel sector who are looking for an innovative proposal and the directors of luxury hotel chains who seek to differentiate themselves from the rest with something new and different. to offer its customers, given that competing with “the best” is increasingly difficult. Once you have the best buffets, the best rooms and the best excursions or tours, the final customer’s choice ends up going through details, because it is becoming more and more difficult to differentiate yourself in the world of luxury!

Once the client has detected the success of the project, it is necessary to answer the three questions that he formulated at the beginning of this article and that clarify and dispel, as only data can do, the possible doubts that an entrepreneur may have;

The return on investment is 9 months from the purchase of the Skybubbles and 6 from the commercialization of reserves. The keys to have such a quick return? The first is the installation, from the commission to the commercialization it only takes 3 months, incomparable with any new construction structure or reform of any building acquired for that purpose. Invoicing as soon as possible is the priority of everyone who invests in a new business, and few projects allow you to invoice in such a short space of time.

The return-risk binomial is balanced, since the investment to be made not to launch a project of 4-5 skybubbles is not the typical one that is only available to a few, rather the other way around. This means that the risk is reduced compared to any acquisition of work or construction. On the other hand, profitability continues to be the pillar of the Skybubbles proposal, reasons to be proud of it are not lacking; the average price per night is around 25% more than that of an average 5-star hotel room and reservations for stays exceed 80% of the annual average on weekends and 60% on weekdays. The usual thing is that in the months with the best weather there is a wait of 3 weeks to a month and a half to be able to reserve a night in a Skybubble.

Finally, and as a key point for decision-making, the internal rate of return calculated over 5 years for each Skybubble is surprising, numbers in hand:

Taking into account an average occupancy of 80% on weekends, 60% on weekdays (the moderate average real occupancy provided by resorts and hotels that have skybubbles installed and running) and a (high) discount of 10 % for maintenance tasks (cleaning and occasional repairs). Adding as a reference a purchase and installation price of 50,000 euros and a price per night of 300 euros interweekly and 500 euros on weekends, the Skybubbles show an IRR of 12, 5%. Yes, yes, 12.5%, now add the possibility of cross-selling… Do you now understand why there are more and more all over the globe?

3 Key Points that one must take into account when considering betting on Skybubbles as a business, because not everything can be rosy;

The ubication; The environment is pleasant and beautiful is key for the Skybubbles to be attractive and work well in the eyes of the consumer. If the fusion of nature, experience and comfort is not accompanied, it loses integers and it will be noticed in the number of reservations. It is important to have a suitable environment. The arrangement of the rooms is also key, as well as the distance between them, privacy is absolutely key.

Permits: Obtaining the permit to be able to install and market the ranches are different in each continent, country and community, it is important to first verify that the activity can be carried out before making any hasty decision. That is what they are in charge of alerting and notifying those interested in Skybubbles, obviously.

Financing: The product does not carry added financing, so it is important to be clear about the investment that is wanted/can be made and to know the capital that is to be financed by the interested party’s financial institution. Despite this, it is optimal and advisable to start in phases, and advance once the previous phase (generally 4-5 units) is already consolidated.

Ready then to innovate and be profitable? If the answer is yes, do not hesitate to contact us.