Ecotourism ventures

Abstract

The diminishing wilderness areas remaining in southern Africa offer opportunities to establish and market ecotourism destinations. It would thus be useful to gain insight into what conditions make certain ventures viable. With the aid of a model and using data from Ongoye Forest in South Africa, the long-term financial viability of three operational ecotourism scenarios is assessed: upmarket lodges, middle-of-the-range chalets, and campsites. The resulting “preferred” scenario depends on a specific weighted interest in favor of the community, the environment, or the investor. The economic realities of southern Africa suggest that without government support, it may be risky to invest extensive initial capital into the larger scale ecotourism projects proposed.

Résumé

Les entreprises d'écotourisme: misère ou richesse. Les régions naturelles qui restent dans le sud de l'Afrique présentent des occasions pour établir et commercialiser des destinations d'écotourisme. Il serait utile d'ouvrir de nouvelles perspectives sur les conditions qui rendent viables certaines entreprises. En utilisant un modèle et des données de la forêt d'Ongoye en Afrique du Sud, on évalue la viabilité économique à long terme de trois scénarios opérationnels de l'écotourisme: hostelleries haut de gamme, bungalows moyens et terrains de camping. Le scénario «préféré» qui en résulte dépend d'un intérêt spécifique pondéré à la faveur de la communauté, l'environnement ou l'investisseur. Les réalités économiques du sud de l'Afrique suggèrent que, sans le soutien du gouvernement, il serait risqué d'investir beaucoup de capital dans l'établissement des plus grands projets d'écotourisme qu'on a proposés.

Introduction

Ecotourism operations are in essence hotels situated in natural areas, hence the recent preference for the term “nature-based tourism” (Goodwin 1996). Besides offering food and accommodation like regular hotels, such destinations also market some aspect of wilderness experience. Some of these operations are thought to play a conservation role by reserving exclusive rights to an area, thereby reducing adverse impacts on the environment. However, in South Africa, government conservation agencies in control of reserves are facing budget constraints and are pushing to market these destinations more aggressively. Similarly, private enterprises in control of large natural areas are facing increasing pressure from various sectors to justify their control over the areas in which they operate.

Therefore, due to the rising opportunity costs of conserving natural areas, particularly in less developed countries, one might assume that if not financially viable, these areas will inevitably be reverted to some form of agriculture, silviculture, industrial use, or other competing economic activity (Dixon and Sherman 1990). Correspondingly, if proposed tourism development is not empathic to local community's needs, it will inevitably fail to sustain the resource base that it markets to its tourists. Based on this interdependence among tourism, community, and conservation, it is imperative that those conditions and factors that make an investment into new ecotourism operations financially viable be identified.

Various community participation models for tourism development have been proposed (Boonzaier 1996; Child 1996; Simmons 1994), and it is not the objective of this paper to evaluate these. However, based on the potential growth of the industry, particularly in South Africa, it is important to address the question as to when such communities are likely to receive the maximum benefits from the industry. Ultimately that question will depend on the financial viability of the specific hotel or lodge. Although this does not invariably mean that financial viability of a venture will necessarily result in optimal socioeconomic benefits, subscribing to a capitalistic paradigm implies that this will usually be the case (Loon 1998).

In this paper, a generalized model that may be used for assessing the financial viability of many similar ecotourism operations in rural southern Africa is submitted. Putative ecotourism developments in Ongoye Forest, Kwazulu-Natal Province of South Africa, are used as a case study. Three potential scenarios are modeled: an exclusive lodge, middle-market chalets, and a basic campsite. It is useful to envisage these operations as unique combinations of three contrasting utilitarian functions: financial, environmental conservation, and socioeconomic involvement and upliftment. These three functions are not exclusive and are expected to be weighted differently by different interest groups. Each of these ventures represents a unique structuring of the three utility functions. The model is applied analytically, exploring the financial viability dimension of each venture individually, but providing judicious speculation on the contribution of the environmental and socioeconomic functions. The results of the respective financial viability of these ventures are particularly relevant with respect to state versus private enterprise involvement in southern Africa. Further, the implications of the model output are discussed in the context of sustainable tourism, and recommendations made for its wider application.

Although the emphasis may seem to be on statistical techniques in order to compare such tourism options, it is believed that this approach is still multidisciplinary in combining environmental and socioeconomic aspects which are applicable to many similar proposed ecotourism ventures in rural southern Africa. The focus on the financial dimension of such ventures is not intended to be a substitute for conventional accounting techniques to assess economic feasibility. Rather, it is meant to serve as a means of combining environmental and socioeconomic considerations with financial viability, the latter of which is believed to be of priority within the economic reality of the Third World or developing country status of most southern African countries.