Pajoka EcoResort Business Plan
created 2010
by Noan Fesnoux
Contribute with the Mind Contribute with the Heart Contribute with the Body
Letter from the Founder Dear Reader, The document you have in your possession has been a long time coming. Through the last two years, I have gone through many iterations, each time consulting those around me for advice and guidance. The final outcome of this process is something I take great pride in, and am confident is designed to build trust in the business both locally and internationally. Furthermore, Pajoka will serve as a model for both better business practices, as well as sound environmental design. I am a naturally inclusive person, and have tried to open up the development process to any who are interested in participating. During the building process any and all are welcome to come and establish our first site. For those wishing to contribute ideas I have created PajokaLearn, a learning commons where ideas can be readily exchanged and developed. It is people like this who we ultimately wish to attract.... those to whom it is more than just a beautiful beach in an exotic locale. I look forward to hearing the feedback this document will generate, incorporating ideas and concepts my friends and family have to offer, and eventually hosting many of you at one of the most sustainable beach resorts in the world. Sincerely, Noan Fesnoux
Contribute with your m ind
Contribute with your h eart
Contribute with your b ody
Help develop ideas, design living systems, and establish a business
Donate money or invest in the pajoka project
Visit us during building for free, or prebook a holiday at discounted rates
Table of Contents Letter from the founder Pajoka as an Open Source Model Contribute with y our m ind Introduction Contribute with your h eart Introduction Contribute with your b ody Introduction Business Overview History Vision and Mission Statement Objectives Ownership Location and Facilities Products and Services Description of Products and Services Key Features of Products and Services Production of Products and Services Site Selection Transportation Human Resources Future of Products and Services Comparative Advantages in Production Industry Overview Market Research Size of the Industry Key Product Segments Purchase Process and Buying Criteria Description of the Industry Participants Key Industry Trends Industry Outlook Marketing Strategy Target Markets Description of Key Competitors Analysis of Competitive Position Pricing Strategy Promotion Strategy Distribution Strategy Management and Staffing Organizational Structure Management Team Staffing Labour Market Issues Regulatory Issues Risks Implementation Plan Financial Plan Phase I development Phase II development Socially responsible profit distribution
2 4 5 6 7
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8 9 10 10 11 17 17 18 19 19 19 19 20 21 22 22 22 26 25 26 27 28 29 29 30 31 32 33 33 34 34 35 36 36 37 38 39 40 41 47 48
The Open Source Business Model Pajoka's ultimate goal is to act as a successful prototype for a new model of sustainable tourism. Access to the information and experience Pajoka has gained will be open to anybody to replicate, modify, and further develop. Sharing information like this is defined as Open Source. Open Source existed initially as a concept to allow for rapid development and deployment of web applications and software. It was seen as a way to allow collaboration and selfenhancing diversification of production models. Since the dawn of the internet, it has risen to become a vanguard of an open and accessible information technology era. Since this beginning, Open Source has extended to more and more human endeavours. From beverage recipes to designer drugs, many industries have taken on this model for the benefits it brings to the company and society. In acting as a model that is freely disbursed, Pajoka will achieve two things. Firstly, it will provide a means of marketing the concept, and in turn lead to more clients. Secondly, it will allow for sustainable tourism practices to be rapidly developed n a global scale. This latter point will improve consumer awareness and may provide a strong enough impetus to shift industry standard operating procedures. Thus, one of Pajoka's primary goals (promoting sustainable living practices) will be satisfied.
Other examples of Open Source Businesses: Instructables Restuarant OpenCola Softdrink Brewtopia The Tropical Disease Initiative The Science Commons Appropopedia – Sustainable Design
Contribute with your Mind Any project benefits greatly from the collective imagination of as many people as possible. Humans are innovative and creative, and can solve seemingly insurmountable problems using our cognitive abilities. In this light, Pajoka requires input from many people in the details of development and execution. Pajoka as it exists today is already an amalgamation of ideas from countless individuals. One person may see fallacies in what seems like an ironclad idea to another. Therefore, the first way that people can contribute is by using their mind. There will be two primary means to voice your ideas and concepts. First is through Pajokalearn. The second will be through the Pajoka Facebook page.
Pajokalearn Pajokalearn will eventually serve as the educational portal for Pajoka. Everything from helping guests improve their knowledge and understanding of the region where Pajoka is to the training of staff will be conducted in an online learning environment. In the development phase, Pajokalearn will serve primarily as a forum of discussion about which practices should be used to ensure Pajoka remains appealing to guests as well as highly sustainable.
Pajoka on Facebook Some people may be interested in becoming involved on a deeper level, but for many the time needed to do so is hard to find. In that case, Pajoka has a facebook page which will allow people to post ideas, interesting articles related to sustainable living, and other comments which may evolve into new ideas and improve the Pajoka business model.
All interested parties, whether an investor, beneficiary, or just a passionate environmentalist, may participate in the development of ideas surrounding Pajoka. Get involved.... your contributions are always welcome.
Contribute with your Heart As with nearly any project, financing is a critical piece of the puzzle. Pajoka refers to this as a contribution of the heart despite the fact that there will be financial returns for investors. This is because when money becomes involved, a certain degree of emotion also enters the picture. A donation may shed light on what passions and interests an individual may have, while investments indicate a firm belief in the value of the idea being invested in. Pajoka will search for financing using these avenues:
Investment: The primary means for Pajoka to achieve financing will be through direct investment. These individuals will buy preferred shares in Pajoka in blocks of US $5000 , and receive dividends once Pajoka has become profitable. Investors will also have the opportunity to purchase and develop adjacent land for their own use with assistance from Pajoka. When not being used by the investor, this property will enter the Pajoka rental pool and profits from its rental will be divided between Pajoka and the investor.
Donation: In some cases, individuals may want to support Pajoka but not have the financial means to do so. A donation is a simple way of providing assistance to the project without a large financial risk. Once Pajoka has achieved profitability, the amount of money donated will be returned to the local community and environmental funds.
Contribute with your body Once financing has been secured and fundamental practices have been put into place, Pajoka will need to be built and guests will need to fly from around to globe to experience it. Hence, the visceral stage of contribution will stand as a testament to a successful venture. Pajoka is pursuing two methods in which people can participate physically in its establishment:
Assistance in building: Anybody who is eager and willing is more than welcome to participate in the building of Pajoka. When under construction, Pajoka will be open and free for anybody to stay (although the facilities initially will be fairly rustic). Bring whatever skills you may have, whether that means providing music to work by, a knack for gardening, or the desire to build walls and roofs.
Holiday package pre-booking: One measure interested parties can take to get involved in Pajoka is to prebook a holiday. At US $1000, the recipient will get a 2 week stay at a time of their choice with all meals included. That is 50% less than regular bookings. Furthermore, the holiday voucher is valid for 10 years after purchase and can be transferred to anybody they like.
Business Overview History Tourism has always been viewed as a means to development. Large international bodies have put billions into foreign economies to promote this type of development. Naturally, it is seen as a symbiotic venture, since members of the developed countries profit from improved infrastructure in certain holiday destinations. The reality of what occurs is much less heartwarming. In many cases locals have been displaced and disempowered within their own community. Surely, jobs and revenue locals can obtain from the tourists do help. But at what cost? Some mass tourism destinations have lost their entire cultural identity. Yet tourism still remains a thriving industry, largely because the demand for ever improved facilities by holiday makers does not relent. If this could be used to promote cultural preservation, sustainability, and improved living standards all would benefit. The guest could relaxed in a safe, sustainable, and unique locale, the business would improve its desirability and ethical status, and investors would be ensured a return on investment. Both Noan and Kiky have experience relevant to this type of business. Kiky has worked many years in the tourism industry and has managed teams of hospitality workers in the cramped conditions of a cruise ship. Furthermore, she graduated from Tourism high school and has since worked in many different areas of the hospitality sector. Noan's studies have brought him to have a good understanding of natural ecosystems, and what measures need to be taken in order to attain sustainability on the Pajoka sites. His naturalist background puts him in an ideal position to work as a nature interpreter, or educate locals in this facet. He has successfully helped build a business which relies on establishing strong connections to the clientele.
Vision and Mission Statement Our mission is to create a multifunctional facility, which can act as holiday getaway suitable for those who are environmentally conscious, or as a site for a green learning school. We will strive to have a positive impact on clients and community alike, and will dedicate a portion of our net profits to community building and conservation projects. Pajoka will be a business that fits nicely into the green paradigm: a company built on conservation, sustainability, and profit redistribution into the local economy. Pajoka is designed to become a leader in a new developmental paradigm. As a sustainable green business, Pajoka will act as a model to both the local and international community. Through it’s development and operation, Pajoka will incite positive changes in education, leisure, and global awareness.
Objectives Our ultimate objective is to foster environmental stewardship in the local communities within which we operate, set aside land for conservation purposes, and provide shareholders with a satisfactory return on investment. Our immediate goals are to: 1. Obtain a relevant site for the construction of the Pajoka sustainable resort 2. Create an effective marketing campaign and buzz about the Pajoka project. 3. Complete the core habitation units on site, and start to generate revenues through their rentals. 4. Attract tourist for holidays throughout Sulawesi, particularly in South Sulawesi 5. Develop an ecologically minded community of citizens from around the globe.
Ownership Pajoka will be licensed as a direct foreign investment corporation (PMA) in Indonesia. The ownership of the corporation will be shared between investors, and the land for phase 2 will be leased from the community on an extended lease (Hak Bangunan). Land in phase 1 is owned by Reski Amirullah, although structures developed on it will belong to Pajoka. This will be done through the Hak Bangunan status.
Ara beach is an unnoticed but stunning strip of sand in South Sulawesi, Indonesia
Investors' properties will be purchased through Pajoka, and leased directly to the investor through a Hak Bangunan agreement with a lease of 50 years, which is extendable thereafter. These properties may be sold by the owner (ei. Investor), but the use of the property will continue to be the same. Pajoka will maintain the right to rent out the property when the owner is not there, and will continue to charge a community upkeep fee when the owner is present.
Location and Facilities
A clear satellite image of Ara beach. The road in the centre is steep, but the only access aside from the sea.
Pajoka will operate out of Indonesia. The site is located on Ara Beach in South Sulawesi. The 1.3km long beach contains only a few temporary dwellings, used by boat builders and fishermen from the local village. Still in a fairly natural state, this beach does not have water or electricity connections. Therefore, all development will be off grid. Close to the site are a number of attractions, including many dive sites around Bira, unique cultural villages such as Kajang, several caves of varying sizes, and island hopping around the area.
The dive sites around Bira are well known amongst enthusiasts, and only a short boat voyage from Ara. What lies in between has yet to be discovered.
Development will occur in two stages. Phase 1 will start up operations first, and act as a test site for the viability of Phase 2. At the first site a main house with lounge, kitchen, and dining area will look out onto three bungalows directly on the beach. This site will be nicely landscaped, with many food gardens laid out under the fruit groves of this flat terrain. A wall of coconut trees will shade the walking area between the bungalows. The white sand beach will be a prime attraction, as well as the diving and hiking in the area. This small site will be equipped with a full service dive centre and dive boat. The sand along Ara beach is some of the whitest around. The clean intertidal area is idea for beach lounging and playing games.
Phase 2 will consist of 10 bungalows, a restaurant/kitchen, a service house, and leisure centre. 7 of the bungalows will be double occupancy, while three will be designed for families. Every bungalow will have views of the water and beach. The restaurant will be able to provide food for all the guests, and be able to offer room service if desired. The service house will provide facilities for storage, laundry, staff housing, and contain fundamentals of the electricity infrastructure. The leisure centre will house equipment for divers, and provide equipment for other beach activities.
Rocky cliffs flank Ara beach, but make for interesting explorations of crab filled cliffsides.
In addition to these two stages of development for Pajoka, there will also be development led by the investors in their personal accomodation. Pajoka will assist the investors in acquiring property, a team of builders, and establishing their beachfront home. The establishment of these sites will be dependent on the investors, and therefore will not be taken into account in the initial financial statements in this business plan.
Phase 1 Photos
View of Ara beach from Phase 1 site
Phase 1 property as currently seen from the beach. The property goes from the tree on the right to the palm tree on the far left of the photo
Phase 1 property as seen from the North corner. This picture was taken at the end of the dry season, so some of the trees have dropped their leaves.
Phase 2 Photos
180 degree panorama of site for Phase 2
The entrance to the site is through a large fissure running parallel to the beach
A view from the hills surrounding the second site
Interesting rocks along Ara beach.
Phase 1 Building Design
Products and Services Description of Products and Services Pajoka will sell relaxing luxury holidays to ecologically minded clients. These holidays will include meals and accommodation.
Accommodation at Pajoka will be in either in the in Bungalows designed to host couples, but can be adapted to fit families of 4 comfortably. 2 bungalows will have a main room and a bathroom, and 1 will have 2 rooms and a bathroom. All are isolated from the other bungalows to give privacy to the guests. Once investors have added their properties to the rental pool, there will be more diversity in the accommodation available. At the moment, the Pajoka site offers comfortable, yet rustic accomodations.
In the neighbourhood of Ara, there are many fruit groves and forests. Mangoes, papaya, coffee, and chocolate all grow in this area.
All meals at Pajoka will be locally sourced, and provide guests with a healthy and authentic gastronomic experience. Since food is purchased locally, guests will not be able to choose from a menu, but instead will be offered what can be made with ingredients available. Guests may request other meals at an additional cost, and are welcome to use the kitchen provided they do not interfere with regular operations.
The activities available to the guests are numerous, and will increase with time. Through local partnerships, Pajoka will offer a variety of activities such as diving, sailing, and fishing. Other activities, such as hiking and touring the local area, can be done through Pajoka. Special requests are always taken into consideration, and Pajoka will try to meet these.
Key Features of Products and Services Over the past 10 years, the environment has become increasingly important in people's eyes. Pajoka will cater to the next generation of consumer: those who rate the quality of their vacation not only on the nature of the vacation but also on its sustainability. Since Pajoka is based in Indonesia, the initial investment for travellers from America and Europe (flights and time) will be high. Therefore, it is important to create a lasting impression for them. Although some repeat guests are expected, Pajoka hopes that promotion through word of mouth will allow us to expand our client base.
The principles behind Pajoka will allow guests to experience a self sustainable system which does not rely on polluting machinery (with the exception of transportation). With the self sustainability will come a back to nature approach, the natural beauty of the area will be showcased wherever possible, and bungalows will be integrated into the natural landscape.
Pajoka will work around existing vegetation as much as possible
The bungalows are meant to create a personal space for each family, while the commons area will provide guests with someplace to meet up and do group activities. Situated around the site will be a variety of seating areas so that guests can have some options as to where they want to relax. Staff will keep the resort tidy and will provide regular laundry and cleaning of the rooms. The staff will be well versed with knowledge of the local area, will speak both the local language and English, and will try to accommodate the guests in any ways possible.
Production of Products and Services Pajoka will need to be created from the ground up. There are a number of resources which need to be acquired in order for Pajoka to come to fruition:
Site Selection A site in South Sulawesi has been chosen as the initial development site. The site has been purchased and landscaped, but remains without electricity, water, or any permanent dwellings. It is wild, but still accessible by road and within 40 minutes to regional hospitals and trade centres. A village nearby will provide a reliable work force, as well as food broker.
Building Materials Most building materials will be sourced locally, while special building materials such as power generation, lighting, and waste management will be shipped to Makassar and then transported to the site. Installation of the electric systems will require specialists, but general building construction will be done in traditional fashion, Temporary buildings like the ones seen above can using traditional means. This will keep costs down be reused and incorporated into the building process. and allow Pajoka to invest immediately in the community through the creation of jobs. One available option for sourcing environmentally friendly building materials from the local area is to purchase old houses, and rework the wood into new bungalows.
Transportation A regular and reliable means of transporting goods and people will need to be acquired. This will facilitate rapid construction and later will help transport guests from the airport to the resort.
This vehicle is an example of the type of transportation Pajoka will initially purchase.
Human Resources Initially, we will need to establish a corporation in Indonesia and attain the valid building permits and licenses from the Government. Reski Amirullah will be in charge of this, and most of the local purchasing and initiating in dialogue with the community. Later she will take a managerial role in Pajoka, leading the staff and establishing procedures. Noan Fesnoux will head site development, coordinate the deployment of power generation, and act as Foreman of the building project. Once Pajoka has been completed, two additional individuals will be hired as hospitality workers, helping with daily operations at Pajoka.
Future of Products and Services As Pajoka begins to receive guests, we will adapt over time to reflect Industry trends and the client's needs. Various activities will be added to ensure that we can accommodate a broad range of clients. Provided that Pajoka receives a consistent stream of clients, Pajoka will look at expanding its base of operation and look into the viability of increasing the resort's capacity. Furthermore, the option of multiple bungalow sites that allow guests to enjoy a variety of natural landscapes will be looked at.
Achieving complete self sustainability at our primary location.
Catamaran Camping Tours in remote locations, allowing guests to explore the area in a natural, relaxed, and carbon neutral fashion.
Treks through Indonesian national parks which are guided by experienced English speaking naturalists.
Hosting of Sustainability camps catering to forward thinking students from across the world, using English as a means of communication. These camps will be marketed as an experience designed to both improve English skills and introduce the Green Paradigm shift.
Comparative Advantages in Production Much of the corporate structure will place Pajoka in a leading role in future markets. Since Pajoka will form as either a social business or a social enterprise, guests will feel more inclined to frequent our resorts, even if similarly priced with the competition. Pajoka's policy to provide per bungalow rates will encourage families who are looking for quality that fits their budget. Larger groups of people will also be encouraged to attend, costing Pajoka marginally more per person but increasing the likelihood that guests will engage in more activities.
Looking over the edge of a cliff in the area at the coral gardens below. Aside from the beaches most of the coast looks like the picture above.
Since the Pajoka site will be relatively isolated and in a natural environment, guests may prefer to reside at a Pajoka resort over the competition. Pajoka aims at integrating nature into the design of the resort as much as possible, and due to the carbon neutral goals that the company aspires to, guests will take comfort in the knowledge that their holiday is not placing additional burden on the ecosystem, but rather assisting in its conservation.
Industry Overview Market Research The tourism industry has been consistently on the rise over the last several decades, and ecotourism has developed large inroads in carving out their own chunk in the tourism industry. With the emergence of China as a economic powerhouse, Indonesia is poised to benefit from tourism from China. Indonesia is also located close to Australia, Japan, India, and Korea, all with direct air transit to Bali. In the past 10 years there has been an increase in foreign interest in Sulawesi, particular to tourists prone for finding off the beaten track locations. Since the natural environment is not heavily disturbed, the island of Sulawesi has become a hotspot for ecotourism. There are already a number of operators in the area, however none have as radical of a vision of sustainability as Pajoka. All the same, these businesses have established themselves well, and are able to charge western rates in Indonesia.
Pajoka will lead the market in developing a business plan which suits the Green Paradigm, the next major economic shift predicted by the majority of economists. In subscribing to ecologically sensitive practices, and developing a strong role in the community, Pajoka will cater toward values that are always in demand: charity, community, and environmental stewardship.
Size of the Industry The tourism industry has been expanding continuously over the past century, and with the advent of widebodied aircraft which enable people to reach farther and farther afield, Tourism has particularly grown in developing nations. Ecotourism in particular has been in a state of rapid growth over the past two decades, and is projected to grow even faster in the coming years. In 2004, the UN World Tourism Organization (UNWTO) found that ecotourism was growing three times faster than conventional tourism. In 2005, the Tourism Network rated ecotourism as the fastest growing sector of the tourism industry, with an annual growth rate of 5% worldwide, representing approximately 6% of the world gross domestic product.
Key Product Segments Ecotourism is broken into a multitude of segments. Pajoka will classify as an inbound tour operator and ecotourism accommodation provider. As an inbound tour operator, Pajoka will be required to make arrangements with various local businesses to provide accommodation, food, transportation, and interpreters (whether language or nature). Our accommodation will appeal to a number of different segments in the hospitality industry. 1. Family Package Holidays
2. Student/Backpacker accommodation
3. Educational Excursions
4. Adventure travellers
5. Vacation Rental Property
6. Long term vacationers
These segments in this market are based mainly on pricing and the length of stay. Pajoka will be able to accommodate these groups since our layout is fairly flexible. We can also offer long term vacation offers, which will reduce the profit generated per bungalow, but also fill up bungalows for extended periods of time. Since Pajoka will be located in a natural setting and will contribute to the conservation of the environment, it is our hope that we can attract school groups for nature interpretation and education on sustainability. Of utmost importance will be Pajoka's appeal to Families and groups of travellers. The bungalows will offer privacy for the group, and communal sitting areas will allow larger groups to gather and interact as they want. Many of Pajoka's programs will involve education of the guests about the local culture and the environment.
Key Market Segments Ecotourism caters to a growing body of travellers who are seeking "green" vacations. The appeal is generally to families and individuals 30 50 years of age, but is not limited to this group. If affordable, Pajoka will also be able to appeal to students and younger travellers who are searching for sustainability in their holidays.
A 2005 Analysis done by the Centre on Ecotourism and Sustainable development found that more than two thirds of U.S. and Australian travellers, and more than 90% of British travellers, consider active protection of the environment and responsibility for the community a hotel's obligation. It is Pajoka's main priority to meet these demands. The Ecotourism market is very broad. While most of the patrons are between 35 and 55, there is an increasing number of "mature" adults (older than 55) who are seeking out Eco tourism holidays. The market is equally divided by gender, and it is found that most ecotourists are physically active individuals. Ecotourists tend to be better educated professionals or businesspeople with college degrees and a genuine interest in learning about the nature and culture. Kurt Kutay, a tour operator, states that many of the traditional ecotourists fall into two main categories: Dual Income, No Children (DINC's) and empty nesters (children who have already grown and left the house). In the new millennium, two new market segments are emerging: families and single professionals. For both of the latter categories, it is of great importance to establish a cultural connection with the locals, quite possibly this factor is even more important than environmental protectionism.
Purchase Process and Buying Criteria There are many factors people consider when choosing an ecotourism holiday. Among factors to consider are: accessibility; location; seclusion; comfort; personal touch and design of site; price; attractions and activities; and friendliness of staff and locals.
Since most of the customers will be sought out through referral (word of mouth), it is essential that our customer service is of top quality. Therefore, staff should be friendly at all times, and the site should be welcoming for all visitors. It will also be important for the community to participate in this through genuine interaction with the guests which leaves both parties satisfied. Through such offerings, we will also expect a fair number of repeat customers. The eco tourism industry often works through referrals and repeat customers. Remy got a little tour around the beach on a traditional boat.
Certain amenities are also of importance to the customers. In terms of the basic needs in their accommodation, beds, private bathrooms, linen, soaps and toiletries, furniture, look and feel of the room, mosquito netting and ceiling fans are all important. Other factors about the site play an important role in what the customer demands as well. The meals, site design, interaction with locals, staff, activities and attractions all play an important role in this.
Description of Industry Participants The Ecotourism industry is hard to define, since many places claiming to be eco tourism destinations do not abide by the principles of ecotourism. There are also many other sectors in the tourism industry which get erroneously lumped into eco tourism, such as nature tourism, cultural tourism, and adventure tourism. Places in Indonesia which offer genuine ecotourism are few and far between. The market for ecotourism in this country has only recently opened up, and many of the operators are capitalizing on lax definitions to advertise themselves as ecotourism destinations in Indonesia. Much of the ecotourism industry in Indonesia at the moment offer more environmentally friendly holidays, but neglect to contribute to the community and protect the environment. Most of the current ecotourism locations are near large population and tourism centres such as Bali, but a few are in more secluded and pristine areas of Indonesia. Misool EcoResort in Rajah Ampat, Indonesia. This place is an excellent example of responsible ecotourism.
Tourism in Sulawesi is still in its infancy. Much of the island remains underdeveloped, and no areas have reached their saturation point. A minute proportion of the accommodation options in Sulawesi can be classified as ecotourism even in the broadest sense of the term, and those that do are generally secluded from one another and offer a variety of levels of luxury at a variety of prices. Amatoa resort is in Bira, a town located abour 20 minutes from Pajoka's site. This resort represents high end holidays which attract divers from Europe.
Key Industry Trends Current trends demonstrate the ecotourism is on the rise. As the fastest growing segment in the tourism industry, it is projected that roughly 30% of the entire market will be in ecotourism (in the broad form of the definition, which includes nature tourism and adventure tourism) by 2030. Airline travel may limit long distance vacationers in the future if prices become prohibitive, however Indonesia is located close enough to developed countries such as Australia, Singapore, South Korea and Japan that the growing demand for ecotourism in these countries will sustain businesses in Indonesia. China is also becoming a major source of revenue for international tourism, with hundreds of millions of Chinese tourists travelling by 2020. Since Makassar is now an international airport with flights to open soon to Hong Kong, travel times will be greatly reduced for East Asians.
Makassar is a short flight from regional hubs, like Singapore
Pajoka is also attempting to cater to long term tourists more in the future as well, in the event that air travel costs become prohibitive. Most professionals are becoming increasingly mobile with the emergence of Information Technology such as the internet and mobile devices. This may allow professionals to have extended "working holidays" wherein they are able to enjoy the natural environment and seclusion without affecting their career. Pajoka aims to provide a reliable virtual connection to the outside world, while also allowing one to enjoy the warm weather and easygoing manner of the tropics.
Industry Outlook Within the tourism industry, it is expected that high impact tourism has come to its saturation point. Tourists and local governments alike have become increasingly aware of the destructive tendencies that the mass tourism market creates. This can be clearly seen in the tendencies of World Bank lending for tourism. In the 70's tourism was hailed as a solution to end poverty in developing countries. The World Bank surmised that heavy development in this sector would allow for developing countries to limit inflation and improve their GDP. However, coupled with free trade this did quite the opposite, severely stressing the environment around tourist centres and generally leaving very little profits in the country where the development took place. Now the World Bank and other major lending agencies have put a focus on eco tourism, especially that which is locally run and profits remain in the host country. The demand for Ecotourism has preceded the lending tendencies of the World Bank, as well as any major regulatory body. Many of the leading authorities in the Tourism Industry believe that ecotourism is still in its infancy, and that with increasing environmental awareness people will be more and more inclined to go on holidays that involve ecotourism aspects. Globally, there is a consistently rising number of people who are environmentally and socially aware, and this may put further measures into place which favour eco tourism. As people become more aware of an individual's impact on their environment, tourists will seek out locations which minimize this, as well as put valuable land under conservation.
Marketing Strategy Target Markets The target market for Pajoka will depend on the activity that we are selling. Primarily, we will rely on middle income families and small groups. Due to the low cost of staying at Pajoka resorts, we aspire to be affordable to the average family who would take a trip to Bali or other regional tourism hotspots. Pajoka will offer the target market an affordable ecoholiday in a remote and peaceful location.
There is a growing awareness among Asian nations about the importance of our environment. This will inevitably lead to more interest in ecotourism, which means that there will be a much greater number of people in the target market as ecological awareness develops in Asia. As an indicator, Korea has recently changed their national paradigm to "Green and clean". While green living may not be practised, it is already being exploited for its marketability. Pajoka's educational division will target yet another market: the aspiring English students. While costs for summer camps continue to rise, many Asian families who wish to improve their child's English are looking towards destinations that are closer to home. This coupled with Pajoka's green paradigm makes it a highly appealing location for a camp. Nature tourism is booming in China.
Yet another group in Pajoka's target market will be the adventure traveller. This group has a broad range of budgets, and Pajoka will work at finding suitable packages and prices for all adventurers.
Swimming in a cave near Ara beach
Description of Key Competitors Pajoka will rely initially on word of mouth as the primary means of attracting clients. The initial guests will likely be those related or connected directly with staff at Pajoka. Much of the ecotourism industry has flourished using this as the primary means of marketing. While there are a number of competitors in Indonesia, most of these do not fulfil the mandate of being a proper ecotourism resort. Many resorts claim to be ecologically conscious, while only doing the bare minimum required to call themselves an "ecoresort". These resorts will be considered a threat to Pajoka in the sense that they can operate with lower budgets and higher profit margins and do not perpetuate a Large resorts like the one pictured above consume great amounts of energy and sound image of ecotourism in Indonesia. produce lost of waste.
The proper ecotourism resorts which follow ecologically sound practices may actually offer access to new clientele. Since the overall vision is the same, and the areas of operation are generally far apart, an alliance between true eco tourism operators would be able to refer clients, trade industry practices, and potentially work together on overseas marketing.
Alila in Ubud is an example of a high end ecotourism resort
Analysis of Competitive Position
Green School is Bali is an excellent example of environmental education.
In some ways Pajoka will have no competition in Indonesia. Up until now, only one other eco tourism education facility has been established in Indonesia. This niche market will be principally served by Pajoka. There are other facilities in Indonesia which offer similar programs, but no facility to date which educates the students in English and about the environment.
With the middle class family tourists, there is a fair amount of competition, however it is centralized in Bali. Most off grid establishments cater to upper class couples, while Pajoka will cater to middle class families in its first phase of development. Direct competition includes Wakatobi Dive Resort, Selayar Dive Resort, Misool EcoResort, and Maleo Cottages. These operators are dispersed throughout Eastern Indonesia, and each offer a slightly different experience to that which Pajoka aims to provide.
Selayar Dive resort in South Sulawesi
Pajoka's greatest competitive advantage will be that of price for westerners. Most resorts take advantage of their exclusivity and charge prices which make travel with a larger group to these areas prohibitive. Pajoka will count on the target market of families and middle class travellers to keep a decent level of patronage in order to offer lower prices. The Wakatobi dive resort in Southeast Sulawesi
Pricing Strategy Summary of prices: 1 bedroom bungalow and meals $140/night 2 bedroom bungalow and meals $160/night Educational Adventures $25/student/day Adventures – $25/hr for planning and from $50/day for guides.
Pajoka will have a number of pricing strategies, each catering to a target market: 1. Middle Class Family For this demographic, Pajoka will charge on a per night basis for a bungalow. The costs will be approximately $160 per night. Each bungalow will provide sleeping arrangements for 4 people. Included in this price would be 3 meals, although if the guests want to order particular foods they will have to pay extra. Extra people in the bungalow will cost $20 per person per day. 2. Couples – This group will be able to afford a little more per person, and each bungalow will go for $140 per night. Included in this will be three meals that are made using sustainable means. 3. Educational Tourists Pajoka will have facilities that will be able to accommodate a medium sized camp of approximately 20 students. Pajoka will bill the academic organization who runs the camp directly a rate of $35 per student per day. This will include meals, accommodation, and transportation. 4. Adventure Tourists Some tourists who come to Pajoka ecoresort will have arranged custom itineraries with Pajoka. Pajoka will charge these people $25 per hour for the arrangement of the itinerary, and from $50 per day for the guide. All other costs will be added to the final estimate of each trip. Pajoka is following an aggressive pricing strategy wherein we will be able to open up ecotourism to a niche who until recently have not been able to afford it. Pajoka will rely on location to add great value for the clients, while initially avoiding costly infrastructure such as air conditioning in all rooms. When compared to other remote resorts, Pajoka will have a much more appealing pricing policy.
Promotion Strategy
Pajoka will initially build a buzz through word of mouth. This has proven effective for many other low budget eco tourism operators. However, other marketing initiatives will be pursued in order to ensure regular patronage. Not our target market, but quite possible something that is marketable!
Pajoka will also campaign digitally through the internet. The main reason for this is that there is a much greater reach, and since the target market for Pajoka is so broad geographically it will be necessary to develop online presence. This has already been initiated through the Pajoka Blog and Pajoka's website, as well as through postings on other sites (such as environmental graffiti and TED). Another reason why Pajoka will use the Internet as the primary marketing tool is the environmental impact is less. Fliers and brochures are expensive to create initially, and they also create large amounts of waste, something Pajoka will avoid wherever possible. Furthermore, Pajoka will strive to establish connections to like minded businesses through the Internet. These connections may develop into symbiotic relationships where mutual benefits can be attained.
Distribution Strategy Pajoka holidays will be bought directly online via the Pajoka website. Bookings can be made on the telephone, through our representatives, or directly over the internet. Customer service and sales support will occur directly through the Internet. Email will be a primary means of communication, along with direct person to person chatting through online applications such as Skype and Yahoo Messenger.
Management and Staffing Organizational Structure Pajoka is a Social Business, and will have a board of shareholders who will oversee major investments and provide overview of the operational budget. However, as preferred shareholders the board members will not have voting rights, and instead depend on Noan Fesnoux to adhere to the company mandate as laid out at startup. Shareholders may hold a vote of no confidence if the company mandate is violated, and there is strong evidence of mismanagement. This graphic defines prime motives of Pajoka Eco-resort
Daily management will be conducted by Reski Amirullah, one of the founders of Pajoka. She will implement the ongoing budget of Pajoka, ensuring efficiency and staff satisfaction. Initial startup of Pajoka will be managed by Noan Fesnoux and Reski Amirullah. They will make sure that the construction of Pajoka satisfies its mission statement, as well as present clear progress reports to investors through blogging and regular updates via email.
Management Team Noan Fesnoux has successfully built a previous business, Little Mountain Campus Academy, from the ground up alongside the owners of that company. He has a background in science, giving him the tools necessary to understand the complex interactions that are needed to make Pajoka a self sustainable business. As a world traveller, he has witnessed a variety of industry practices, both good and bad, which will aid him in developing an appealing and ecologically sensitive ecoresort.
Quite possible the only known photo of my father and his two sons all wearing suits.
Reski Amirullah graduated from tourism high school in South Sulawesi, and went on to become a critical member of a liveaboard dive operation based in Indonesia. She has experience with staff management, as well as guest relations. Her knowledge of the local cultures and customs is invaluable to the success of Pajoka, and will provide support for the initial development of Pajoka. In a country where local contacts are vital for a business' conception, Reski's network of contacts will aid in the rapid development of Pajoka. Resumes for Reski and Noan are attached to the business plan.
Kiky and her consultants discussing 'business affairs'
Staffing While Pajoka is under development, there will be no need for ongoing staff positions. Upon welcoming the first guests, Pajoka will hire a small staff to maintain the hotel and provide additional services. 1. Room Service, site maintenance – A local will be hired as the first staff member with Pajoka. They will ensure a general cleanliness of the facilities, make beds daily, and assist with meal preparation. While experience will be an asset, this is not required. The workers will be paid a monthly wage that is above national standards, which will amount to no more that 2 000 000 Rp per month (~200 USD). Initially, no benefits package will be awarded, however as Pajoka increases its clientele they will receive health benefits and continuing education scholarships. Training for the position will require them to learn basic English, as well as what is required in general housekeeping. This training will be provided by Reski Amirullah. 2. Driver, Groundskeeper – This position will also be one given to a local resident. They will drive the company vehicle for guests and maintain the Pajoka gardens. They must have experience as either a driver or a farmer, preferably both. They will be paid a monthly salary of 2 000 000 Rp (~200 USD). Benefits will be provided at a later date as Pajoka increases its usership. The person must have a valid driver's license. Training in basic English, as well as cooking for western clientele will be provided by Reski Amirullah. As Pajoka increases its clientele, these jobs will be divided among more staff members. Each will be provided with an education in a basic level of English speaking and understanding, as well as details about the Pajoka site which allow it to be self sustainable.
Labour Market Issues Unemployment is quite high in Indonesia, and therefore there will unlikely be any shortage in qualified staff for Pajoka. Furthermore, given that Pajoka will pay above national standards for the work assigned, it is likely that the job will be highly vetted. The remote location may prove to make living off site difficult, in which case accommodation for staff will be provided by Pajoka.
Regulatory Issues Intellectual Property Protection Pajoka aims to spread green tourism practices across Indonesia, and will attempt to make much of the documentation and processes within the company open for public use. Transparency is an issue which many Indonesian companies lack, and Pajoka wishes to do its best to provide transparent accounting and procedures in a effort to immunize itself from corruption. Creative Commons copyrights will be provided to all documentation Pajoka creates. This will serve the dual purpose of allowing the company to increase brand awareness as well as promote healthy, sustainable tourism practices in Indonesia.
Regulatory Issues Pajoka will be required to initially register as a PMA in Indonesia. Indonesian law has recently changed to permit complete ownership by foreigners, however we will attempt to maintain foreign ownership for part of the company. As with any hotel, Pajoka will need to register with the local tourism board and gain approval for commercial use of the site. Pajoka will also attempt to make connections within provincial and regional government which allows the company to serve as a model of sustainable tourism in the area. Sulawesi currently has a strong mandate promoting green business, which may facilitate development.
Risks Market Risks The tourism industry is one highly susceptible to a variety of factors. Politics, natural disasters, terrorism, economics, and media all have serious impacts on the tourism industry. While these factors can crush the tourism industry, a low overhead and safe business practices can help Pajoka sustain itself through difficult times. Furthermore, using referrals provides some immunity to these factors. Other Risks As with all tourism operations, there is also the liability to keep the client in good health throughout their stay. Safe business practices in all activities which Pajoka undertakes will be an essential part in keeping clients safe while staying with Pajoka. Another risk that Pajoka will have to contend with is under and overexposure. Underexposure will require Pajoka to develop a new marketing strategy, in which a broader client base is sought. This can be achieved through working with Outbound Tour operators, developing new packages to appeal to other market niches, and lastly hiring a marketing agency to assist with expanding our exposure. Overexposure could also result in compromising Pajoka's mission of providing high quality tourism through attracting insincere clients. With such an issue, Pajoka would need to screen incoming guests to ensure they wish to patron Pajoka for the right purposes.
Implementation Plan Implementation Activities and Dates Nov 2009 First Pajoka site has been purchased Dec 2011 Construction of Pajoka main guest house has begun Mar 2012 Primary guests house has been completed, and work on secondary structures underway May 2012 Pajoka has attracted first clients July 2012 Pajoka continues to further develop site... gardens growing and further buildings planned Nov 2012 Pajoka profits exceed monthly upkeep costs.
Financial Plan Summary of Financial Statement The first Pajoka resort will be created in two phases of development. The first phase will provide a small and intimate setting on the main beach, and will serve as a test into the viability for further development of Pajoka. Once the first phase is complete, the second phase will be started. This phase will cost considerably more to develop, but have a much shorter recapitulation period. The size of phase two will also mean that the project will have a considerably stronger influence in promoting conservation, sustainable development, and cultural preservation in the area.
Initial Investment: Pajoka aims at collecting the required startup capital without taking loans from the bank. Pajoka will seek investment in several manners. First would be a contributor, who is interested in supporting Pajoka's mission but does not have the capital to do so. These people can donate money (5500 dollars) and time to help realize the goals Pajoka has set out to acheive. While they see no financial benefit for their actions, they recieve recognition and personal reward in helping out. The second group are the Early vacationers. For an investment of 1000 dollars, they will receive a coupon for two weeks at Pajoka resort once it has been completed These coupons will be valid for 10 years, and allow the recipient 2 weeks of vacation time at Pajoka. Multiple units of this can be bought per individual, allowing those interested to purchase as much vaction time as they may be interested in. The final group are the investors. They will invest in preferred shares of Pajoka in blocks of 5000 dollars. These investors will recieve dividends once Pajoka has achieved profitability, as well as assistance in purchasing adjacent lands near Pajoka sites. Following Pajoka's development code, they can then share in the infrastructure development, as well as create additional units that can be added to the Pajoka rental pool. Their share status will be that of preferred shareholders.
Phase 1: Initial Beachfront Bungalows, Service House, and Dive Equipment for 4 guests Target Investment: $120 000 Projected Recapitulation Period: 3 years from start of operations Target Net Monthly Income: $11 000 Target Monthly Expenses: $US 1 856 Phase 1 requires relatively little staff, but will require an international coordinator to manage bookings and site staff. *After balancing the budget books and providing investors with a return on their investment, Pajoka will reevaluate the coordinator’s monthly income. *coordinator salary will increase with profitability
Long Term Development Goals for phase 1 core complex: Peak reinvestment into the community (per annum): $US 13 900 Peak reinvestment into the environment (per annum): $US 16 800 for more information on this, click here
Pro Forma Income Statement (all in $US) 2012 Net Sales
2013
2014
3 year overview
20060*
54660**
65500***
0
0
0
20060
54660
65500
Sales & Marketing
120
2700
2700
Property & Utilities
0
2000
2000
2196
4392
4392
5431.29
1175.19
1408.25
6300
6300
12300
Interest Operating Loan Interest Term Loan
0
0
0
0
0
0
Depreciation
0
0
0
14047.29
16567.19
22800.25
Direct Cost of Sales Gross Margin
140220
Expenses:
Operations Banking & Other Wages & Benefits
Total Expenses Net Income Before Taxes Less: Income Taxes
6012.71
38092.81
42699.75
1202.54
7618.56
8539.95
Net Income
4810.17
30474.25
34159.8
*using conservative estimates of an average of 20% occupancy **at 30% occupancy ***at 40% occupancy
53414.73
69444.22
Pajoka Projected Net Income over first years: The below graph is an estimate based on an average occupancy of 20% in the first year, and 30% in the second year. Max. Occupancy is at 70% in the summer of 2013 over this period.
number of nights sold
estimated occupancy through first couple years of operation 45 40 35 30 25 20 15 10 5 0
small beach bungalow large beach bungalow
07/12 09/12 11/12 01/13 03/13 05/13 07/13 09/13 11/13 06/12 08/12 10/12 12/12 02/13 04/13 06/13 08/13 10/13 12/13
date
This next graph shows the net profits Pajoka estimates it will generate:
estimated net income Jun 2012 - Dec2013 8000
net income
6000 4000 Net
2000 0 -200006/12
07/12
09/12 08/12
11/12 10/12
01/13 12/12
03/13 02/13
-4000
date
05/13 04/13
07/13 06/13
09/13 08/13
11/13 10/13
12/13
Phase 1 Total Expenses for Infrastructure
Fully equipped has a capacity for 8 guests, as well as diving and sailing equipment. This is the desirable status for Phase 1. This would enable the resort to attract a broad demographic of clientele, as well as provide excellent facilities. Main house and 2 guest bungalows would be the minimal functional size in providing hotel like service. Otherwise Pajoka would be more appropriately designated a vacation rental. Phase 1 will open Jun 2012 to it’s first guests. With an estimated average occupancy of 2030 percent Pajoka would take approximately 3 years to repay the initial investment.
Startup Cost Estimates for Phase I – detailed analysis number
cost per unit
total
Infrastructure
section total 26450
tapping the source piping general wastewater gardens solar panels windmill generator battery/power storage inverter and regulator water holding tanks
1 1 1
1000 2500 3000
1000 2500 3000
10 1 1 1 3
1000 5000 4000 500 150
10000 5000 4000 500 450
Service house
26410 main structure outdoor bathroom and WC cooking cove and hearth fridge freezer microwave stove oven HE dishwasher AC unit tables chairs sofa upstairs lounge seating upstairs bookshelf pots and pans dining set for 20 pax lighting side tables coffee table hammocks
1 1 1 1 1 1 1 4 10 1 1 1 1 1 1 2 2 8
15000 2500 2500 300 300 120 500 300 300 250 70 40 700 250 50 200 100 2000 30 30 30
15000 2500 2500 300 300 120 500 300 300 250 280 400 700 250 50 200 100 2000 60 60 240
Bungalows
23270 structure wastewater garden plumbing bed frame mattress
3 3 3 4 4
5000 1000 500 100 300
15000 3000 1500 400 1200
indoor furniture toilet sink shower fixings outdoor recliners bedsheets towels
4 3 3 3 6 8 12
200 50 60 100 40 40 15
800 150 180 300 240 320 180
dive RIB (rigid inflatable boat) compressor dive tanks BCD Fins Weight Belts
1
5000
5000
1 4 4 4 4
1000 120 500 70 40
catamaran
1
2500
1000 480 2000 280 160 0 2500
Equipment
11420
Gardens
800 vegetable garden tree planting irrigation hoses equipment shed gardening equipment
1 10 1 1 1
100 10 250 150 200
100 100 250 150 200
business costs
8600 lawyer fees accounting fees business license liability insurance
1 1 1 1
1000 600 5000 2000
Transportation
1000 600 5000 2000
16440 8 passenger vehicle vehicle insurance
1 1
15000 1440
Phase 2 – Cliffside bungalows, central restaurant, expanded diving and recreational facilities. Target investment: $US 200 000 Projected recapitulation period: under two years Target Net Monthly income: $US 29 988 Target Net Monthly expenses: $8740 Phase 2 of Pajoka will move the business from the experimental stage into a legitimate business. In this stage, facilities will be able to provide for up to 40 guests simultaneously when taking into account the accommodation created in phase 1. Staffing will be expanded substantially, and new key roles will form. Some of the key infrastructure costs (ei. Water and power) will be partially covered with the surplus from phase 1. Eight new bungalows (4 small and 4 large) and a larger restaurant/commons area will be the largest expenses in this stage.
Social Business – Profit Distribution Model If Pajoka were to act as a social business, investment into the community and the environment would need to occur. These components would increase after certain benchmarks have been achieved. The graph below shows how the profits would be divided from 050%, 5070%, and 70100% occupancy. As the occupancy rate increases, as does the benefit to the community.