The Hindu Business Line : Global demand for eco-lodges expected to rise by 10 pc

THE global demand for eco-lodges is expected to increase by an average of 10 per cent per annum over the next several decades, but the sector faces a number of challenges and requires a comprehensive development strategy to support its sustainable growth, says a report on eco-lodges published recently by the International Finance Corporation.

According to the report titled `Ecolodges: Exploring opportunities for sustainable business', a development strategy for the eco-lodge industry must take into account several key factors that impact the profitability of an eco-lodge.

For instance, one influencer of profitability is the destination where the eco-lodge is located.

The destination must be attractive to the eco-tourism market, with policies that promote eco-tourism, the report explains.

At the same time, successful eco-lodges are able to offer clients more value than their competitors; not just in terms of price, but also in terms of design, facilities, services and so on.

While being in an attractive eco-tourism destination contributes to the success of an eco-lodge, the lodge's management must be able to translate the available attractions into high-quality experiences.

Knowledgeable guides, comfortable accommodation and good food also enhance the visitors' experience and contribute to the lodge's success, the report says.

Financing structures that allow for long-term return on investment perspectives and have a low amount of debt are another common characteristic of profitable eco-lodges, says the report.

In fact, financial packages that allow for longer break-even periods are important contributors to the success of an eco-lodge.

Successful eco-lodges are also generally more accessible, with easy connections to international flights.

Similarly, profitable eco-lodges are run by managers with a passion for the business, combined with the right mix of technical skills and vision, says the report.

Business models that have the active involvement of an owner or entrepreneur during the start-up phase also appear to have a greater chance of success, the report adds.

Also these lodges need technical support especially in areas such as market studies, business systems, accounting, preparation of financial statements, business planning and identifying new technologies for energy and waste management, according to the report.

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