Santo Domingo, Dominican Republic (PressExposure) June 01, 2014 -- The axiom Buy Low / Sell High applies not only to the stock market but to real estate as well -- and to business in general, for that matter.
But the fact is, when a sudden economic downturn sets in, most people do exactly the opposite. Large numbers of people panic and take irrational measures to protect their assets, and in so doing, exacerbate their losses. It's human nature.
Meanwhile a small minority, referred to as "contrarian investors", stay cool and find a way to take advantage of the situation, turning a catastrophe into a windfall.
One such investor who has mastered the art of profiting from economic crises and stagnation is Ian Schembri-Sant, a hotelier from Malta who settled in the Dominican Republic in 1990 at the age of 21 and has since been accumulating accomplishments in the hospitality and real estate industries.
Trained to strive for the highest standards of quality in the UK, Switzerland and the USA, on his arrival in DR, Schembri-Sant immediately recognized the deficiencies in the local tourism industry -- and the great opportunities for improvement this signified.
Attracted by the Caribbean climate and the Dominican people, in addition to the enormous business potential, he decided to make the D.R. his new home and to build a career around raising the bar of the local tourist industry.
First Venture: Gastronomy
Not only did Schembri-Sant's formal training focus on food service, but he defines himself as an F&B at heart; thus it is no surprise that his first venture was the Marco Polo Club, a venue where the best food and drink could be enjoyed, in a sort of white Cinderella castle overlooking Sosua Bay.
Schembri-Sant recounts "The site has been and always will be the focus point, and there are not many views in the country as incredible as Sosua Bay. The project consisted of my first 2 restaurants -- Ristorante Sabatini and L'Etoile D'Or - plus a cafe/bar we named Cafe Banana, and 9 luxury tourist apartments."
And he goes on to explain, "The first challenge was the architecture. It had to blend in with the traditional style of the village so we decided to use the Victorian style -- all in wood and conserving an old structure that was on the site."
But according to Schembri-Sant, the operation itself was the greatest challenge.
"I had to bring 5 chefs from abroad: a sous-chef from Paris, a French baker, an Italian chef for pastas, a Swiss patissier for desserts and a cake decorator/patissier also from Switzerland. We even brought a barman from Europe for our cocktail bar."
And he added: "Next challenge was getting the products. We could not find fresh foods, such as mozzarella, prosciutto or many other products locally so my wife Nathalie was off to Miami weekly to buy Angus meats, fresh fish, cheese and charcuterie, among others."
As the saying goes, behind every great man is a great woman. Through all the initial hardship, he could always count on his wife/partner Nathalie, a native of France and also a trained professional hotelier. Nathalie not only applied her interior design skills and remarkable taste to keep the venue exceptionally captivating, but she also handled the operations and filled in for her husband whenever needed.
The sacrifice and hard work of the first 7 years paid off, as Marco Polo Club became one of Sosua's most highly regarded food service venues. Schembri-Sant had successfully completed his initiation as a DR business owner and he was now ready to tackle bigger dreams.
After the 1996 presidential elections, the Dominican Republic began a new era of modernization and rapid economic growth. Schembri-Sant recalls the emergence of large supermarkets and fine restaurants mainly in the capital Santo Domingo. Now he could get both local and imported pastas, fine wine and most other products locally.
During the years when he ran the Marco Polo Club, he took a keen interest in the hotel business. At that time, and despite the country's new economic momentum, the North Coast hotel industry was beginning to decline due mainly to increased competition from the East Coast. Sosua had traditionally been a budget destination. By the late 90's the industry was dead.
Again, with his contrarian business mindset, Schembri-Sant set out to change that. He dreamed of a luxury boutique hotel that would command unheard of rates on the European plan. He knew that he also needed volume so he also conceived an upper middle class "All Inclusive" resort. That would, in turn, motivate other hotels to improve not only their physical facilities but also their services so as to retain a good market share in an area that is characterized by cut-throat competition.
Not many people, other than Schembri-Sant and his wife, thought he was sane. But he eventually proved everybody wrong.
Incursion into the Hotel Industry
Despite the gloomy predictions, Schembri-Sant knew the time had come when he got an opportunity to purchase 20,000 sq. meters (5 acres) of ocean front land next to the Marco Polo Club, the site of an abandoned cabana hotel built in the 70's.
He purchased the land and spent the next two years planning and building what he named Sosua Bay Club, consisting of a 250-room 4 star all inclusive, Sosua Bay Hotel, and the 50-room, 5 star boutique hotel Victorian House - that also incorporated the "old" Marco Polo Club.
When the sister hotels opened in the winter of 2001, they were 100% sold out. The second winter, Sosua Bay had rates double and triple what the area was accustomed to, and the Victorian House had captivated the elite market with unheard of rates for the North coast of the island. His plan had worked. Other hoteliers copied the formula and were now adding a small boutique luxury property adjacent to their "All Inclusive" hotels. Also some started to remodel and refurbish their property seeing that there was a clientele for high quality.
Within the next 3 years, the Victorian House achieved accreditation and memberships within the elite group of the Caribbean's top hotels. Schembri-Sant's goal had been achieved. In December 2007, he sold his interests in the properties and started planning his next venture.
The Real Estate Developer
As the contrarian investor he has always been, Schembri-Sant then set his sights on resort real estate development. Here, too, there was a stagnant market, following the sub prime mortgage crisis of 2008 and the ensuing global recession.
He could have chosen the much more vibrant market of Bavaro-Punta Cana on the East Coast for his first venture, but he knew all along that the highest rewards go to those who invest where others are afraid to do so. The success of his first two ventures had boosted his self-confidence as a developer. He knew he could tackle the most difficult tasks and make them work.
So he founded The Ocean Club Group of companies, which owns several prime oceanfront properties all over the North coast of the island and specializes in luxury residence clubs. In 2012 he started the first phase of The Ocean Club, Residence & Spa, Sosua: 48 condominium units ranging from 1 to 4 bedrooms, all on a spectacular stretch of golden sandy beach, a Beach Club, Baia Lounge and a Cigar/Wine Club. The resort will be managed by a top New York hotel group as of the 1st of November this year.
In this regard, Schembri-Sant explains: "At The Ocean Club, we bring together proven hotel management, architectural, construction and extensive local knowledge. We wanted to bring together the best of all worlds - to create a fusion of luxury residence with hotel services and amenities, offering only experiences of exceptional quality."
And he goes on to say that: "Our objective is to be recognized as the company that develops and creates the finest residence clubs wherever we locate. We create properties of enduring value using superior design and finishes, and support them with a deeply instilled ethic of personal service. Doing so allows The Ocean Club to satisfy the needs and tastes of our discriminating customers. Our goal is to become the leading developer of luxury residence clubs.â¨"
If comparative sales prices are an indicator of success, then there is no doubt that Schembri-Sant's first Ocean Club went through the roof, selling in a record time all the units at prices which are nearly double the North Coast average for beach condos. The 1-, 2- and 3-bedroom units sell for between $300,000 to over a million. But there's one little problem - they are all sold out. There are only some re- sales available, priced as high as $1,800,000. And this is all in the middle of a global recession.
When asked what his future plans are, Schembri-Sant is quick to say: "I believe that with the success we have had with the first Ocean Club in Sosua we will replicate the idea and formula in Cabarete next, then in other places in the Dominican Republic and eventually, in other Caribbean islands."