Financing Tourism Concessions Sue Snyman

2012/04/04

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Our Journeys Change Lives

Financing for the private sector in tourism

concessions in southern Africa

International Workshop on Tourism

Concessions in Southern Africa

Maputo, Mozambique, 19-22 March 2012

Sue Snyman

[email protected]


History and Background

Wilderness has always considered

itself first and foremost as a

conservation company

With an ecotourism arm.

i.e. we aim to:

• conserve the wild places of Africa

• by enabling people to visit them

• and earn a return for the business and its employees at the same time


We began by creating

“journeys and experiences for discerning globally caring travellers”…


But today we are in the business of “building sustainable conservation

economies”, achieved through the employment of a responsible

tourism model.


Brand Overview


Wilderness Safaris Camps

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Wilderness Safaris Concession Relationships • Botswana

– Okavango Community Trust (OCT)

– Khwai Community Development Trust

– National Parks

– Private owners with management contracts

• Congo – Private partner – management contract

• Kenya – Private partner – management contract

• Malawi – National Parks

– Relationships with community and NGO partner

• Namibia – Joint ventures (Damaraland Camp & Doro Nawas Camp)

– Palmwag – payments to the Big 3 Conservancies

– Skeleton Coast Camp – National Park & voluntary community levies paid to 4 conservancies

– National Parks

– Privately-owned land

• Seychelles – Private owner – management contract

• South Africa – Tripartite agreement - WS; Government & Makuleke community

– Joint Venture – Mpukane community & WS

• Zambia – National Parks

• Zimbabwe – National Parks – relationships with communities


Business Planning

• Specific conservation areas – biomes & endemism

• Tourist routes/circuits

• Accessibility

• Communication

• Supplies

• Viable business model

• Partnership opportunities


African Biomes

“Of the 27 853km2,

only 2.0354 km2 is

covered by

infrastructure (less

than 1% of total area)”

African Biomes


African Centres of Endemism


Business Planning

• Specific conservation areas – endemism

• Tourist routes/circuits

• Accessibility

• Communication

• Supplies

• Viable business model

• Partnership opportunities


Different options for capital investment

• Third party funders

Industrial Development Corporation (IDC)

Stanbic

FNB

• Private partners

Chitabe & Abu Camp, Botswana

North Island, Seychelles

Odzala Camps, Republic of Congo

• Joint ventures

Damaraland Camp, Namibia

Rocktail Beach Camp, South Africa

• Own sources/equity

• Sale of non-core assets

• Cost reduction and productivity improvement

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Case Study: Damaraland Camp


• Joint venture

from Snyman, forthcoming


Options for revenue generation

• Bednights

• Curios

• Road and air transfers

• Third party bednights (travel shop)

• Sale of capital assets

• Management fees

• Marketing fees


Lessons learned

• No tourism circuit – no tourists

• Assess market demand and WTP before investment

• Short seasons hard to break-even (Zambia)

• Political instability causes concerns in the market

• Health risks cause concern

• Product knowledge/awareness is key and needs to be on-going

• Partnerships need to be based on understanding of all aspects of the business

• Expectations needs to be managed – continuously

• Open, honest dialogue and communication essential


What are the challenges:

• Tourism market fluctuations;

• Tourists’ changing desires and needs;

• Exchange rate fluctuations;

• Regional political/social/health issues;

• Managing expectations of all stakeholders;

• Costs of alternative energy;

• Costs of operation (remoteness);

• Training costs & retaining staff


THANK YOU

Travel

Financing Tourism Concessions Sue Snyman