Tourism is one of the biggest growthsectors in the country – some estimates put its growth at three times that ofthe world average – and there’s no doubt that it’s an industry in which seriousmoney can be made. But it’s not without its challenges. “Historically, raisingdevelopment capital for tourism initiatives has been extremely difficult –financial institutions see it as a risky investment. In addition, most lodgeshave average occupancy levels of between 35% and 60% – more established lodgesare well supported but the newer ones battle to gain recognition, particularlyin the international market,” says Chris Rightford, co-founder of TortilisAfrica, a tourism investment and leisure company.
But where others see challenges, Rightfordand co-founder Dusty Rodgers saw opportunity. They innovated a new model thatmeets the challenge of raising tourism development capital and drivesadditional business to lodges to boost occupancy levels. Tortilis Africaconsists of two divisions. Tortilis Africa Investments gives people theopportunity to buy shares in a portfolio of luxury eco-tourism lodges andboutique hotels and raises development capital for tourism developmentopportunities. Tortilis Africa Leisure sells membershippackages which entitle corporates or individuals to a certain number ofbednights per year at the same portfolio of lodges. Tortilis Africa Investmentsforward-buys 30% of the bednights from lodges in the portfolio and sells themto Tortilis Africa Leisure, which makes them available to members. “This drivesextra income to the lodges, helping them to boost occupancy,” Rightfordexplains.
He adds that he and his team spent a gooddeal of time in competitive analysis and research on how people buy leisure.“Other time-based options give you access to designated weeks or months on anannual basis, but our model gives people random usage on a first come, firstserved basis. They can use their bednights whenever they choose, provided thereis an opening at the lodge they wish to visit,“ he explains. Membership isvalid for 12 years and the allocation of bednights is renewed anually. The model is currently unique in the localmarket but getting it just right was a challenge. “We started with the idea forthe investment company, whereby investors would get shares as well asmembership with bednights. But we realised that some people are interested onlyin one or the other so we split the two, although we do offer an investmentoption with discounted membership for those people who want both.”
It’s also been a challenge to get lodges tobuy into and understand the concept. “We had to convince them that the 30%business we were sending them was in addition to their normal business, and notreplacing it,” he says. The fact that he and Rodgers and their respectivecompanies, The Nature Workshop and Islands in Africa,are recognised pioneers in the eco-tourism field, has no doubt helped along theway. The pair teamed up with Kevin Trinder-Smith from Base Capital whostructured the legal and financial arrangements. “The three of us invested thesweat equity.” There’s a good market, both locally andinternationally, for the investment and leisure products. “We believebusinesses in particular stand to benefit from purchasing membership. When youadd up the cost of conferences, incentive programmes, break-away weekends andtrips with clients, businesses are spending a lot of money each year onaccommodation. Buying membership gives them access to flexible bednights thatthey can use at a range of top destinations,” Rightford concludes. Contact: +27 11 537 4600; www.tortilisafrica.com
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