How private green and cultural investments shape ecotourism industry
When I first started promoting ecological projects in the late 1990’s ecotourism was barely heard of and it was seen more as a fad rather than a serious tourism model as it is today. It was a niche market for a limited number of individuals. It was completely absent from the executive boardrooms and largely invisible on the Internet which was also in its early days. Today the landscape has changed entirely and the advent and wide reach of social media has propelled ecotourism to become the travel and tourism’s industry fastest growing segment. Globally, ecotourism has a large market share, representing an estimated quarter of the world’s travel and tourism market as a whole and according to the Center for Responsible Travel, CREST, it generates $77bn in revenue.
The new era of ecotourism spurred on by green investment
Undeniably, ecotourism and its wide uptake has helped shape perceptions of what it means to be a conscious tourism development, be it large or small, a responsible travel company or an eco tourist. It also influences those who are looking to protect natural ecosystems against environmental damage and thus beyond the balance sheets and ROI as the primary goal. This is because they understand that the profitability of their venture is also predicated on the long-term sustainability of the areas they invested in. This newly inspired investor confidence in ecotourism is also boosted by a number of visits to ecotourism sites, which amounts to 8 billion visits per year. This is worth $600 billion in direct spending according to a new study published in the open access journal PLOS Biology.
The Millennials are also shifting the growing trend, as they become associated with a new type of eco tourist, focused on travel experiences and products that espouse, the so called, tripple bottom line at the core of their strategy. We see that the interests converge: many conscious travelers want to see less environmental and social deficit caused by their holiday choices and more real gains for the community and the planet as a whole.
And so do authorities, organizations and individuals invested in the area that are on this bandwagon, too. This is exactly the ethos and driving force behind the Eco-Resort Granada, a 4-star 90-room resort with a purpose initiated by the project’s CEO, Gerardus Dirks. He is convinced that going green and upping the socio-environmental criteria of his integrated approach to ecotourism development in Nicaragua is the recipe for success. The company’s CSR is set to a new level as it aims to address many of the region’s economic and social challenges, which are all interconnected. The project’s primary aim is to preserve the region’s indigenous forest, with its people, biodiversity, culture, languages and ancient practices.
“The resorts will not only offer quality accommodation, but act as a transfer center for knowledge that inspires a change in thinking of the guests and indigenous community in order to create a higher environmental and cultural awareness for everyone and execute the results. It’s really that complete circle,” he explains.
The ecological credentials of this innovative zero-pollution resort are outstanding and are thought to create new benchmarks for the industry when applied on a large scale. Solar-powered air conditioners and grey water irrigation systems are just a couple of technologies that will be employed. Large savings on resources will be made by making all the processes sustainable from construction materials through to design considerations, to renewables and supply chains which will increase profits. The Resort will also develop their own apps to communicate sustainability to clients and partners to accelerate performance and loyalty.
Creating long-lasting change
The CEO believes there is money to be made through championing a highly advanced sustainable ecotourism model in the country that borders Costa Rica, one of the greenest countries in the world and buoyed largely by its smart investments in the ecotourism sector. “In the last two years 4 star hotels such as Marriott and Hilton opened in Nicaragua but what’s missing are 4 and 5-star resorts, says Gerardus. There are only a handful of small resorts and therefore many quality tourist go to neighboring countries. Nicaragua, with its untouched nature, needs quality hospitality and Parrot Resorts will do their share in creating a resort that is fully sustainable. The Green Revolution is here [Nicaragua], and the big resorts want in.”
A decade ago, sustainable accommodation meant rustic eco-lodges and retreats. But, as consumer demand continues to push responsible tourism forward, it is no longer just a niche market but an economic necessity for businesses. As Fran Brasseux, Executive Director, Hotel Sales and Marketing Association International (HSMAI) Foundation, said, “Green is no longer just a trend. It’s a way of life.” A 2011 survey by Conde Nast Traveller showed that 93% of readers felt that travel companies should be responsible for environmental protection and 58% said that their hotel choice was influenced by the support the hotel gives to the local community.
They are hoping to communicate this message in the crowd-funding campaign and thus tap into a vast network of investors who align themselves with the same sustainable living and conservation principles as those held by forward-looking and experienced entrepreneurs and CEO’s like Gerardus.
The difference between the ‘normal’ hotel chain and the Eco Resort Granada is vast. Whilst the first adopts small environmental, money-saving measures such as using energy-saving lightbulbs , encouraging their customers to change their towels less often, and may even make small donations to local charities.
The Eco-Resort Granada if fully integrated with the indigenous community and has factored in environmental and economic enhancement of the community and the resort’s staff, and its customers. The social benefits – the by-product of this activity – are manifold: the wellbeing of the staff, guests and that of the community. Incorporated into the concept are the 3 P’s .
People…. Planet…. Profit….
If you are either the hotel’s guest, staff or a partner you will be part of the solution and shift in thinking, as you realize that your everyday actions connect directly to nature simply by noticing that your light and shower are powered by the sun, the sofa you rest in comes from sustainable forests, food is from the organic forest garden and the suppliers follow strict sustainable guidelines set by the Resort and only use biodegradable packaging.
The strategic scope of this venture goes even further than this: 25% of the revenue is to be re-invested into sustainable projects, educational programs & trainings of local rangers and university students, workshops and tours. This will translate into further income streams for the resort, jobs for the locals, help launch new sustainable businesses and improve social infrastructure.
The Resort aims to invest a yearly $250,000+ into community development projects and put on reserve another $250,000+ per year to invest in more resorts. Shareholders (lead investors, crowd funders etc.) will have a great return of around 10% on their investment and will become automatically also shareholder in the following resorts. It is a win-win formula for everyone.
Seeking green or cultural investment to create the world’s leading Eco-Resort
The advent of ecotourism closely matches the emergence of green and social impact investing. This new sector has support of the organizations set up to facilitate the process. The funding is matched with green and social investors with equally aligned projects and people on the ground, ready to implement the change. But there is an increasing number of private investors in the mix, ready to support conservation and community led projects that are not only about making a healthy profit. NatureVest estimated the total of conservation impact investments to reach in the next five years – $5,6bn which will greatly exceed the $1.9bn made through 2009 to 2013.
For this very reason, in a bold move, Gerardus has opted for a blend of crowd-sourcing and lead investors over traditional financing. Lead investors will be encouraged to give not just funds, but input into the development of the project and ways to stay on the cutting edge of sustainability, quality and community development. These lead investors would have experience related to the project or a passion for its mission and a desire to be involved and make a profound change using this integrated model as a vehicle. In exchange for their financial, intellectual and creative contributions, they will receive four times the share value of their initial financial investment.
To date Gerardus has won the support and backing of the key local environmental and political figures and also has been promised substantial funds, providing the project raises the initial $50K necessary to kick-start the process and leverage larger capital for the venture.
This will be followed by a dynamic crowd funding campaign, which in turn adds the benefits of raising funds, support and awareness for the project. The campaign will allow the public to become active shareholders in the project and receive around 10% return on their investment in the form of dividends.
Crowd-sourcing will also serve to create a community of people to help spread the word about the project, communicate its value and track the progress while constantly raising awareness of sustainability in travel and tourism.
“What we are trying to do with this concept is to get constant innovative and creative input, it is a sustainable cultural journey. And you get that when you involve a lot of people that are interested in your project.”
Eco-Resort Granada has passed the planning phase and is now moving towards action. Decades of experience, solid financial analysis and a passion to start a movement that could completely alter the face of the hospitality and tourism industry are coming to fruition. To help them get the project of the ground support them by being a green-cultural investor, join the crowd funding campaign, (dates to be announced) invest as a lead investor or just learn more about the project on their website: www.parrotresorts.com.