Year on year the historic Old City of Dubrovnik is becoming less of a city and more of a giant ancient hotel. Every cobbled side street has its own “Apartments” sign hanging above the door as the locals move out for the summer months and rent to the waiting tourists. Renting apartments through the popular websites, such as AirBnb and Booking.com, has become an easy way for families to live and in the height of the season they can earn more than the average annual salary.
Just surf the internet and you’ll be greeted with thousands of apartment and villas in and around Dubrovnik, with prices ranging from 50 Euros a night to a whopping 15,000 Euros. From small, cupboard-sized rooms, to luxurious villas with private butlers and swimming pools, every shape and size of private accommodation is on offer.
And the demand is growing and growing. Bookings for this year are already in full swing with many apartments in the Old City already fully booked during June, July and August. And with the average price of a one-bed apartment in the heart of the Old City renting for just under 150 Euros a night it isn’t difficult to see why this business is so attractive. With only around 750 people actually calling the Old City of Dubrovnik home the number of apartments and therefore the number of guests far outweigh the inhabitants.
However, it isn’t all plain sailing. Actually purchasing and refurbishing any building inside the city walls need the nerves (and the finances) and patience of a saint. “Reconstructing a building inside the Old City is extremely challenging. Firstly, you have to satisfy the requirements of the Conservation Department and then you must use a licensed builder to carry out the works. There are only seven or eight firms that have this license and of course they are constantly busy,” explained a private investor who has apartments in the Old City. And the cost of building and adapting apartments inside the historic centre is considerably more expensive than any other suburb of the city. “If the building is devastated and requires reconstruction from the ground up then prices start at around 1,000 Euros per metre squared, if the space just needs a fresh look then prices start at around 300 Euros,” concluded the investor. Adding that if an investor takes a mortgage to buy the property and then a loan to finish the apartment it will be impossible to see a profit for at least twenty years.
The average price of an apartment in the winter in Dubrovnik is 50 Euros whilst in the summer months the same apartment will cost you 150 Euros. And renters who go that extra mile to attract guests can expect to have 200 nights a year.
There are around 452 apartments inside the city walls, and in the wider Dubrovnik area a staggering 3,326 renters. “In 2016 there were 1,956 beds inside the Old City and in 2017 that number rose to 2,169,” commented Božo Burić, the head of Private Accommodation for the Dubrovnik Tourist Board. Adding that the vast majority of apartments were ranked as three-star, with 60 percent of apartments in the Old City having three stars.
From April to November these apartments record an 80 percent booking capacity. And one of the keys to achieving this is the feedback from clients, according to Nino Dubretić, the co-owner of the Dubrovnik travel and booking specialists, Direct Booker.
Are there any indicators that this trend will come to an end, will reach a saturation point? Looking at the indicators for the future the answer is no, at least for the next few years. With more interest, more publicity and more flights coming year after year the demand for accommodation will remain at these levels for the foreseeable future.