November 13, 2020 - What to do when the planes stop flying and traditional tourism markets dry up? An innovative shift in focus at the Chedi Lustica Bay, and some lessons from Montenegro in how to reinvent tourism.
"Luxury means different things to different people," a friend said to me recently "For me at the moment, luxury means nature, space, fresh air and outdoor activities."
Things we used to take for granted, I thought to myself later - particularly those who were forced to endure weeks of urban lockdown earlier this year (and in some cases, once more this winter). COVID-19 seemingly has no preferences of victim based on importance, reaching the highest officials in 10 Downing Street and The White House, to name but two. Nature, fresh air, space, privacy - a chance to breathe and return to the old normal. That really is luxury, I agreed, before putting on my mask once more as I entered Zagreb Airport.
I was on my way to Montenegro, staying at The Chedi Lustica Bay where I discovered first hand how they are currently navigating the hotel industry’s troubled waters. The hotel wanted to show me how they were adapting to the considerable challenges of the new reality. The weather was spectacular, they promised, and a quad bike tour of the peninsula would be a highlight of the year. Looking out of the window at one more drizzly grey afternoon in Varazdin, I didn't take much convincing, and we made plans for a 3-night stay, with me flying down to Dubrovnik.
Longterm readers of TCN may recall an article I wrote soon after my first visit to Lustica, back in February, 2018. Back then I was stunned that such a project could actually be getting off the ground in the Balkans when I had spent years watching major foreign investments in Croatia get strangled by paperwork, bureaucracy and corruption. And yet here, across the border, a visionary Swiss-based business was investing 1.1 billion euro to develop a prime piece of real estate. The 7 million m2 plot on the Lustica peninsula would be home to no less than 7 luxury hotels, a new village of 2,500 people, two marinas and an 18-hole golf course. The project, done in partnership with the Montenegrin government, was moving forward at speed. Crucially, with such a large amount of land, the investor was in total control of the design of the space. If he wanted to build an experience that focused on peace, beauty, nature and stress-free living, he had no neighbours he needed to negotiate with.
And that is exactly what is happening at Lustica Bay.
It was an experience which led me to write one of my most discussed articles ever on TCN (even at ministerial level in both Croatia and Montenegro) after that first visit - Lessons from Montenegro: Why Luxury Lustica Bay Will Never Happen in Croatia.
During my first visit to Lustica almost three years ago now, I encountered what was essentially a building site, and I remember laughing when I was told that the luxury The Chedi Lustica Bay would open in July that year, especially when reverting back to my experience of such projects in Croatia. But open in July it duly did, and progress since then has been more than impressive, despite the slowing brakes of the corona era.
To be honest, when the hotel contacted me, I was surprised that the Chedi Lustica Bay was even open in mid-November, especially in this crazy year which has ravaged tourism all over the world.
One of the challenges of tourism in both Croatia and Montenegro is seasonality. This chart of Lustica's most important feeder airport - Dubrovnik - gives a great indication of the seasonality of its tourism. And these statistics are from 2019, which was a normal year.
Understandably, the tourist arrivals mirror the frequency of flights. Take away the flights, and you take away many of the traditional tourism markets. Just ask Dubrovnik. While most of the rest of Croatia benefited from the lack of flights because neighbouring countries were forced to choose drivable destinations due to no flights, Dubrovnik was starved of tourist supply and registered just 12% of 2019 arrivals for the first 6 months of this year.
The situation was even worse for Montenegro. Not yet an EU member, some of its main markets were effectively killed for the year when Montenegro was removed from the EU list of safe countries. The 14-day self-isolation requirement on return made a holiday to Montenegro unattractive to all but the diehard fan. In 2019, 49% of tourists to Montenegro came from Germany, Russia and the UK alone, all markets which were effectively cut off for this year. Regional visitors made up just 9% of tourist arrivals last year.
But regional tourists had one big advantage for those tourism businesses willing to seek them out - they could arrive by car. And while the average tourist from regional countries may not have as much disposable income as the Brits, Germans and Russians, there are a significant number of wealthy people in countries such as Serbia, Croatia, Bosnia and Hercegovina, Kosovo, North Macedonia and Albania. They, too, were perhaps planning to fly outside the region, and the lack of flights meant that they were a new target market. This is especially true in the winter months, when tourism locally is traditionally dead. Many tourist businesses close for the winter months on the Adriatic. It is the time of year when the owners relax after a long and successful season, and they fly off somewhere for an extended and well-earned holiday. With no flights this winter, the market is there for those with something to offer.
And the results were impressive. With tourism numbers necessarily much reduced, this year's regional visitors topped more than 80% of all arrivals (up from just 9% next year), with the 2021 forecast as things return towards normality projected at 60% for the hotel.
And, as I discovered during my latest visit to the Chedi Lustica Bay, there is plenty on offer against a backdrop of pristine nature, clean air, space and privacy. Luxury, my friend at the start of this article would call it.
So what is it that the Chedi is doing differently, remaining open all year, when many hotels in Dubrovnik did not open at all in 2020?
The two keys to its relative success are the amazing adventure playground which has no neighbours, as well as a management team not afraid to diversify and explore new avenues.
It is often said that the Montenegrin coast is overbuilt and its beauty compromised. While this is certainly true in places (look away now Budva and Herceg Novi), nothing could be further from the truth on the Lustica peninsula. It really is a bubble of positive vibes and unhindered beauty at every turn, quite unlike any other I have encountered on the Montenegrin coast. And, as I was to discover on my quad bike tour, it has a deceptively rich (and extremely healthy) tourism offer.
When I first visited The Chedi Lustica Bay in early 2018, it was still under construction. My impression was that this was an excellent project, but it was all a little isolated from the rest of the tourist action.
It was only on this visit that I began to fully appreciate the magic of the Lustica Bay experience, now that more has been constructed, and things falling into place. Far from being just a hotel, those 7 million square metres offer the complete Lustica experience, quite possibly one of the best such luxury experiences of space, nature, beauty and fresh air that exists in Europe today.
Using the hotel as a base, there are breathtaking opportunities for cycling on roads where you will encounter nobody.
Or yoga on the water, a calming way to start the day.
The 18-hole Gary Player golf course is not yet finished, but the driving range is open and very popular most of the year (open until November 15).
There were several people on the beach, and even swimming in mid-November, while the kayaks and SUP boards are available for use.
The fleet of quad bikes or e-bikes awaits, which can be rented either with or without guide. The quad bike guide is definitely worth it.
I have to confess I was a little nervous about taking the quad bike, a first time for me, but I was assured by the excellent (if slightly crazy) Chedi guides that this would be one memorable tour.
They were not wrong.
What an incredible way to explore the peninsula, at one's own pace and interest level.
Any thoughts that this might be a gentle tour sticking to the main roads were quickly dispelled, as we headed offroad for the first time, stopping occasionally to remove obstacles in our way (see above).
Time to admire the many beautiful churches to be found in Lustica villages.
A chance to observe the relaxed local way of life - Montenegro in autumn on a glorious November late morning.
Driving through traditional waterfront villages, an oasis of calm.
Our guide Milan was a Lustica local, passionate about his peninsula. He took us to some of his favourite spots where his friends like to go hiking, get away from the crowds, and enjoy barbecues in nature, such as this place by one of the Boka region's 85 fortresses, which were built by the Austro-Hungarians.
Fortresses which had their secrets, as Milan guided us through a 400-metre tunnel under the fortress at Grabovac.
Sensing our appreciation of his tour, Milan took us deeper into his world, showing us the quaint stone villages, many of whose houses are sadly in a state of disrepair.
While others have been beautifully restored and offer stunning views surrounded by nature and no other people.
The colours of Lustica in autumn.
Wild beauty and the old normal. After months of stressing about - and writing about - the pandemic, it really felt that I had found a tiny bubble of natural freshness which harked back to how life used to be.
Onward we drove through the fields and past the olive groves from where Montenegro's exquisite olive oil hails. If you have the time and inclination, there are additional delights to sample, including olive oil tasting at the Moric family olive grove, as well as some quite sensational local cheeses produced by a Russian woman who moved to the peninsula 9 years ago.
A little donkey feeding is also on offer.
And everywhere, the dry stone walls lining the roads.
The Austro-Hungarian influence is strong in the Boka region, and not only due to the numerous fortresses. Masters of infrastructure, it seems that the Austro-Hungarians were ahead of their time, even laying the foundations a century ago of today's quad biking routes. Now we were going truly off-road.
But if I thought that was as off-road as it was going to get, Milan had other ideas. For he knew of places of extreme beauty on his peninsula that the Austro-Hungarians had never come across. There didn't seem to be any road, so I just kept in the line behind the quad in front. The views were outstanding, as was the weather (21C in mid-November).
A view of Mamula fortress, which is on schedule to open as a luxury 5-star hotel next summer.
A tour I will never forget.
Huge thanks to crazy Milan and Tamara for their part in the best tourism experience of the year so far. Highly recommended.
The tour over, it was time to return to home base to sample the off-season offer of the Chedi Lustica Bay.
While there were other guests swimming in the outdoor pool, the indoor one was free.
During my stay, the 2020 World Luxury Hotel Awards were announced, and there was good news for the Chedi Lustica Bay, which was voted Best Luxury Coastal Hotel in Europe, Best Luxury Boutique Restaurant in Europe, and Best Spa Team in Montenegro. An impressive haul of accolades which I decided to investigate. Thumbs up for the Thai coconut prawn curry, an exotic dash on a menu which otherwise focuses on organic local produce...
... from Thai curry to Thai massage. A relaxing way to recover from my quad biking adventures.
One of the challenges the Chedi team faces is attracting the local market. When Porto Montenegro opened in Tivat over a decade ago, it was understandably seen as a haven for rich foreigners, off-limits to locals. That perception has now changed, and the development is popular with locals, but I had the impression that this was how The Chedi and its marina village was viewed by locals.
That perception is also gradually changing as the marina village opens more shops and hospitality outlets, and as more locals came for a coffee and reported back. But that change in perception is also a result of the fresh approach from the hotel management, whose strategy is to increase the number of activities on offer. Not just the cycling, kayaking and quad biking, but also within and around the hotel itself, with locals more than welcome.
Cooking classes for adults on Thursdays.
Cookie and art classes for kids at weekends.
Free movie nights, including free popcorn, on Wednesdays. Sometimes these are held in the amphitheatre in the marina, a truly spectacular movie location.
And sometimes in the hotel lobby, where guests are free to enjoy the comforts of the lobby and the big screen.
And the kids' entertainment is not weather-dependent, and the converted conference room has never looked so appealing or popular.
A quick video tour.
All these extra facilities are free of charge to hotel guests, and - in a nice gesture - also free to locals and anyone else who comes to the hotel and spends. Not a bad investment to relax in this waterfront oasis while allowing the little ones to explore and play.
And regional visitors are coming. Normally, they might have been eyeing a beach in Thailand and Sri Lanka this winter, but with those options no longer on the table, some fulfilling family fun with a touch of natural luxury is proving to be a pleasant if unpredicted alternative. One great innovation which I really liked is the hotel's resort credit - Book one or more nights in a seaview room in this active lifestyle destination starting at 199 euro and use the entire room rate as resort credit and stay for free. A little quad biking, kayaking, massage, movie nights and fine dining, with the accommodation thrown in for free.
And this new focus on activities seems to be working, with the hotel projecting much higher revenues from activities for next year. Interestingly, during my stay, a quarter of guests had signed up for an additional paid activity. Indeed, this overall shift in focus towards lifestyle, outdoor activities and the regional market is probably the best tourism response I have encountered on the Adriatic during this troubled year.
This has been a stressful year for us all, and I was not sure what I would encounter on my brief trip to Montenegro this time. But what stays with me some 48 hours later is that luxury. Not of the comfortable bed, the excellent views, the delicious food, the memorable activities. But the luxury that my friend mentioned at the beginning - nature, space, fresh air privacy. It really felt like the old normal, the things we used to take for granted. Lustica Bay is a bubble, no doubt, and the energy of the people living and working there rubs off on you.
One of the most interesting adaptations to the new realities has been the decision to convert some rooms into office units. These new offices are available for an all-inclusive price of 790 euro a month and unlimited parking and high-speed Internet. Having access to all the hotel facilities and activities, as well as inspiring views such as from this office above, it is one more innovative angle that is already bearing fruit; the first digital nomad has already taken advantage of this offer for an initial 3-month period.
The old normal at the end of 2020. It does exist. Not that epidemiological measures were not in place. They absolutely were, and seemingly adhered to much more strongly than I am used to back in Croatia. Perhaps part of the reason for that feeling was that I did not come across that many people - perhaps 10 in all during our 4-hour quad bike tour, for example.
Just a normal lunchtime on the Lustica marina in mid-November.
On the drive back to Dubrovnik Aiport, I caught sight of the traffic sign as you leave the airport. Dubrovnik to the right, 19 kilometres, Gruda to the left, 11 kilometres. And below that, some place called Tivat in Montenegro. I smiled.
During my transfer from the hotel, my very friendly driver, a Tivat native, told me about life in Tivat before the arrival of luxury tourism and first Porto Montenegro and now Lustica Bay.
"15 years ago, Tivat was so insignificant that it was not even mentioned on the national weather reports. And look at it today."
Indeed. Back then, the very notion that someone would go from Dubrovnik to Tivat for a weekend to relax would have been laughable. Today, that is a very common occurrence. And now if you travel 10 minutes more, you can explore wild beauty and the old normal. In luxury. A luxury that includes nature, space, beauty and endless fresh air.
I heartily recommend it.
With many thanks to the Chedi Lustica Bay team for arranging my visit and sharing their insights. Learn more about the magic of Lustica Bay on the official website.
(Paul Bradbury was a guest of The Chedi Lustica Bay in November 2020)
