Accommodation and Tourism Facility in
Motherwell – A Business Plan
November 2007
Contents
1. Summary of Feasibility
2
2. The Aim of this Business Plan
2
3. Market Analysis
2
Tourist Numbers and Growth Forecasts
The Hotel and Backpacker Markets in Nelson Mandela Bay
The Competitive Advantages of the Motherwell Eco-Lodge
2
3
4
4. Product Description
6
The Motherwell Eco-Lodge and Chalets
Sustainable and Eco-Friendly Characteristics
Staffing Requirements
Set-up Timeframes
Marketing and Sales Strategy
6
7
Marketing Campaign up to and Including Opening
Marketing Campaign aimed at 4 Target Markets
Conclusion
9
11
12
6
8
8
5. Risk Analysis
12
Cost of Construction and Setup
Department of Trade and Industries Subsidy
Will Income Targets be met by the Eco-Lodge and Chalets?
Can Expenditure be kept at Budget Levels?
12
13
6. Conclusions
13
13
13
1
ACCOMMODATION AND TOURISM FACILITY IN MOTHERWELL
Business Plan
1. SUMMARY OF FEASIBILITY
The Feasibility Study for the Motherwell Eco-Lodge and Chalets development suggests that
this development is feasible under certain conditions:

The Eco-Lodge must include a conference facility which could seat possibly 280
guests per day: a 20% usage here is anticipated (20,440 guest days per year) at
R100 per day = minimum conferencing income of R2,044,000.00 per annum
Catering income to the Eco-Lodge would be R102,200.00 per year, which is a rental
of 10% of turnover on an estimated turnover of R1,022,000.00 which would accrue
from the restaurant, the bar and teas, to the catering concessionaire.
Accommodation income of a 70% occupancy of 20 chalets at R500 per chalet per
day which gives an accommodation income of R2, 555, 000.00 per annum.


The above would result in an annual income of R4, 701, 220.00. Operating expenses are
calculated at R1, 696,000.00, which would leave a surplus before debt servicing of
R3,005,000.00.
2. THE AIM OF THIS BUSINESS PLAN
The aim of this Business Plan is to establish the process whereby the Motherwell Eco-Lodge
and Chalets will become established and achieve the following:

20,440 guest-days of conference delegates at a billable cost of R100.00 each, per
year.
R102, 200.00 income from catering, which is a 10% turnover rental on a catering, bar
and tea income of R1, 022, 000.00 per annum.
A 70% occupancy rate on 20 chalets at an average of R500.00 per chalet per night.
Expenses held at R1, 695, 000.00 per annum.



3. MARKET ANALYSIS
3.1
TOURIST NUMBERS AND GROWTH FORECASTS
From Annexure A we can draw the following figures:





Nelson Mandela Bay played host to 405,600 foreign tourists in 2006, and 2,015,710
domestic tourists. These groups spent R2, 3 billion each, giving a total value to the
NM Bay economy of around R4,6 billion (pg 25).
It is estimated that these numbers will have increased to the following figures by
2010: foreign tourists, 488,000 spending R5, 3 bilionl; domestic tourists, 2,270,000
spending R3, 8 billion. Total tourism spending: R9, 1 billion (pg 25).
These figures suggest a rapidly growing tourism market, particularly in numbers
and spend of foreign tourists.
It has been estimated that an additional 233 hotel / resort rooms are needed in the
NM Bay area by 2010, and a further 487 by 2015 (these numbers are over and
above new building projects underway).
These growth forecasts suggest a healthy and growing industry, requiring new
entries into the market in the short term. Plainly, new entries have to satisfy the
requirements of their target market in order to be successful.
2
3.2
THE HOTEL AND BACKPACKER MARKETS IN NELSON MANDELA BAY
Page 24 of Annexure A lists the main large accommodation establishments in Nelson
Mandela Bay, and supplies their 2004 room rates and average occupancies. We have
brought this up to date with research done for this report, and the results of this
research are in the following table:
Hotel
Price per night for
single room
Breakfast
included
Phone
Significant
Facts
Number
of
Rooms
Beach Hotel
Sea-facing: R995
Not s-f: R810
No – R90
extra
041 583 2161
En-suite rooms
58
Brookes Hill
R595
Yes
041 584 0444
68
Chapman Manor
City Lodge
Courtyard
R520
R630
Room: R870
Suite: R995
Yes
No – R65
No – R78
extra
041 584 0678
041 584 0322
041 583 4655
Edward Hotel
Formula One
R530
R229
Yes
041 586 2056
041 585 6380
Holiday Inn
R699
041 582 3720
Humewood Hotel
Kelway
R479.10
4 star R820,
3 star R660
No – R83
extra
Yes
Yes
Suites – 2 bed, 1
bed, bachelor
Incl bathroom,
Kitchenette /
kitchen
En-suite rooms
En-suite rooms
Suites / rooms.
Suites: bathroom +
living room
En-suite rooms
Bathroom in the
room
En-suite rooms
041 585 8961
041 584
0638/9
En-suite rooms
En-suite rooms
67
65
Kings Tide Boutique
B&B
Paxton Hotel
R500, R735, R1135
Yes
041 583 6023
En-suite rooms
12
R699
041 585 9655
En-suite rooms
83
Pine Lodge
R555
041 583 4004
Chalets
70
Protea Hotel Marine
R895
No – R78
extra
No – R69
extra
No – R120
extra
041 583 2101
En-suite rooms,
some suites
98
Road Lodge
R338.35
041 583 4404
R650
Bathroom in the
room
En-suite rooms
92
Summerstrand Hotel
No – R34
extra
No – R80
extra
Windermere Hotel
Willows
R1300
Chalets: R270 – R730
Cottages: R495 – R850
Rondawels: R205 – R850
Yes
041 582 2245
En-suite rooms
Chalets, Cottages,
Rondawels
15
50
041 583 3131
Total
Average
Occupancy
Backpackers Accommodation
24
147
80
97
88
280
237
1630
70%
Lungile Lodge
(Humewood)
Dorm – R70 pp
Double – R250
No
041 582 2042
PE Backpackers
(Central)
Dorm – R55
Double – R150
Twin – R150
Yes
041 586 0697
Jikeleza Lodge
(Humewood)
Camp – R40pp
Dorm – R65 – 70pp
Double – R180-200 p/rm
041 582 2597
3
1 Cora Terrace
(Central)
Tanaqua Lodge
(Humewood)
Rooftops
Willows
Dorm – R75
Private:
Single – R180
PP sharing – R90
Camp – R45pp
Dorms – R75pp
Double from R200 p/rm
Twin from R200 p/rm
From R150pp
Dorm (own bedding) R40R60 per person.
Yes – cereal
041 582 4304
Self-catering
041 585 1655
The above is a reasonably thorough analysis of the hotel and backpacker market. The
Secondary Market (see Pg 24 of Annexure A) has not been included, as they are not, with
respect, competitive establishments.
3.3
THE COMPETITIVE ADVANTAGES OF THE MOTHERWELL ECO-LODGE
As we have noted (see Feasibility Study, section 5), almost all of the successful hotel
and B&B establishments in Nelson Mandela Bay are clustered in the Humewood /
Summerstrand beachfront strip. The attraction of this area is obvious (again, see FS
Section 5).
What do we have to do to get to a 60% room occupancy of 20 rooms for the Motherwell EcoLodge, and to meet our goals of convention numbers and catering usage?
3.3.1 The Four Key Markets for the Motherwell Eco-Lodge
A.
The Motherwell Community
The Eco-Lodge will have to advertise itself to the following markets here:




Accommodation – it must inform, and regularly remind, Motherwell Business
and the Motherwell middle class, of its services – direct mail, email, phone
calls, etc. Another possible customer is the NM Bay Municipality.
Backpackers – an 8 bedroomed unit, rental at R500.00 for the night, is a very
competitive backpackers product (R62.50 per person). And each unit has two
bathrooms, a kitchen and linen – a backpackers heaven! Regular mailings,
calls, etc to Schools, Churches, Sports Clubs etc.
Catering. Special Sunday lunches and Wednesday evenings will draw
support, and Friday evening happy hours will do likewise. Possibly a kiddy
playpack will be an added attraction.
Conferencing. The Municipality, and local business etc, will be a potential
base of support.
The support from the Motherwell Community will be encouraged if the Eco-Lodge
runs a publicised and efficient “Creative Tourism” programme, in which guests
are encouraged to stay at the Lodge, and to involve themselves in creative
tourism programmes co-designed by the Lodge, the Municipality’s department of
Economic Development and the local community (see next section).
B.
Coega Industrial Development Zone
The Coega IDZ is undoubtedly the potential market for the services of the
Motherwell Eco-Lodge. As we have already noted, the Coega Development
Corporation is about to occupy its newly-constructed office block in the IDZ – this
will be the first major grouping of permanent workers to be domiciled in the IDZ,
and this will happen in December 2007.
Should the NM Bay Municipality agree to build the Eco-Lodge, or to commission a
process that allows a developer to build such a facility, it would probably only
come on-stream in late 2009 or in mid 2010 (see Gantt Charts in next section).
By then a number of major factories will be in construction, and other office
4
buildings and commercial businesses will be on-stream. This will create a large
reservoir of senior and middle managers working on construction or in factories or
office buildings in the IDZ by early 2010. Plainly, they will need conference and
recreation facilities; restaurants and bars and accommodation opportunities. The
proposed site of the Motherwell Eco-Lodge is closer to the IDZ than is any part of
the NM Bay Metro except Bluewater Bay, and will thus be in an excellent position
to get some of this business.

Conferencing Business
The Coega IDZ will create considerable opportunities for conferencing, training,
board meetings, breakaways, retreats, etc, etc. This will be core-business for the
proposed Eco-Lodge, and as such a strategy must be developed to “catch our
share” of this business (see next section).

Catering and Beverages
As with the previous note on conferencing, the executives domiciled in the Coega
IDZ will be making use of restaurants, bars and recreation facilities generally –
the Eco-Lodge must promote itself to get a significant section of this business
(see next section).

Accommodation
The ongoing development of the IDZ should see a steady stream of highly skilled
workers (engineers, machinists, finance people, etc.) coming to the IDZ for short
and long stays while establishing production, financial and general business
systems in the plants that will be built. The small chalet, which has a lounge, a
bedroom, a kitchenette, a workstation with an ADSL connection, and a private
bathroom (all of this with a view and with access to a restaurant, a bar, a riverfront and conference facilities) will be the ideal unit to accommodate such
executives. The suggested rate of R500.00 per night, is very reasonable by hotel
standards, and there is no reason why a good chunk of this business should not
be available to the Eco-Lodge. This should be the main target market for the
accommodation services of the Eco-Lodge.
[While the IDZ is the obvious target market, it must be remembered that nearby
Markman Township is also a thriving industrial zone, with considerable
requirements for conferencing, catering and accommodation, and must be
worked intensively in this regard also].
C.
The General Growth in the Tourism Market
As we have noted in the Feasibility Study, a shortfall in tourist-based
accommodation is anticipated in the NM Bay area (between 230 and 480 rooms
by 2015). Should the Eco-Lodge market and advertise itself appropriately, some
of this will be available.
Further, intensive marketing with governmental and parastatal organisations (the
NM Bay Municipality; Government generally; Telkom and Transnet and Eskom,
etc.) could see conference usage develop in this market for the Eco-Lodge, with
attached catering and accommodation takeup.
D.
Eco-Tourism and Cultural Tourism
The NM Bay area has a very limited number of tourism accommodation
establishments that cater for eco and cultural tourists. Most local hotels are just
that – traditional concrete hotels, set on the urban strip of Summerstrand /
Humewood. The game-parks of the hinterland do offer eco-tourism opportunities,
which are very successfully promoted and much used, but in the Metro
5
environment the Eco-Lodge will be a unique development – a township based
eco-lodge, with sustainable technologies (solar panels, etc) and links into cultural
activities that would be encouraged to start in adjacent Motherwell (see section
4.5.2.1).
The design of the Eco-Lodge is possibly the only such institution in the Metro,
with many small buildings (rather than one or two big, environmentally
overwhelming ones) spaced widely around a big site to make them as
unobtrusive as possible.
Annexure D notes how the Eco and Cultural Tourism markets are growing, and
what opportunities they now provide. Plainly, the Motherwell Eco-Lodge is tailormade to catch a section of this growing market.
E.
Market Scan – Conclusions
The four market opportunities outlined in this market scan are, we believe, surely
enough to support a small-scale Eco-Lodge as envisaged in this Feasibility Study
and Business Plan – a 20 chalet resort, in a beautiful environment, with carefully
controlled costs and a reasonable marketing and advertising budget.
4. PRODUCT DESCRIPTION
4.1
THE MOTHERWELL ECO-LODGE AND CHALETS
The proposed establishment is adequately described in section 10 of the Feasibility
Study, and in the architectural drawings in Annexure E hereto. It is again noted that
these drawings are preliminary, primarily for concept and costing purposes. They show
an establishment that is:




An Eco-Lodge main building, with conference facilities, restaurant, bar, deck with
sweeping views, and boma and entertainment areas.
20 chalets, 10 of which are two bedroom (max 8 sleepers) and 10 one bedroom
(max 4 sleepers). They are approximately 70 m² and 45m² in size.
A Boardwalk down the steep cliff to a boathouse and recreation facilities on the
river.
Parking, Guardhouses, etc., as required.
The estimated cost of building this is R42, 560, 000.00 (see Annexure F).
However, the Feasibility Study suggests that considerable savings will have to be made,
and a maximum spend of R20 million is recommended.
4.2
SUSTAINABLE AND ECO-FRIENDLY CHARACTERISTICS
To optimize the ecological sustainability of the Lodge the following resource–saving
technologies the following can be considered:
 Energy Supply
Identify the range of different forms of energy for various needs and consider the
viability of environmentally sustainable off-grid options: solar and wind. Explore
means to conserve energy by insulating the facility, using of low energy appliances
(energy efficient lights)
 Water Supply
Alternative water supply methods like rainwater harvesting and ways of conserving
water can be considered
6
 Sanitation
Different sanitation options and the recycling of sewage for other uses and
environmental benefits can be considered. Examples: Enviro-loo that uses little
water and which can convert sewage into a substance that can be composted and
used to improve the quality of soil and in vegetable gardens. Biogas systems that
produce gas that can be used for domestic cooking, heating and lighting.
 Wastewater management
Wastewater management is concerned with channeling, treating and even storing
used household water in a way that does not damage services, facilities and the
environment. Ways in which to recycle wastewater, how treated wastewater can be
used for irrigation, fertilizer for gardens and even agriculture can be considered

Storm water management
Assess storm water management system with particular emphasis on storage such
retention ponds. Consider ways to manage drainage of sites in case of local
flooding, maximizing natural paths and flow into vegetated areas and vegetable
areas

Solid waste management
Explore practical, affordable and acceptable solid waste management systems to
prevent unsightly appearance of waste that is often dumped in an unregulated way
Explore community-based waste management and the employment creating
opportunities associated with recycling and the benefits of re-use of products.
4.3
STAFFING REQUIREMENTS
It is estimated that the following would be the staffing requirements of the Eco-Lodge:
1 General Manager
1 Marketing Officer
2 Front Office Personnel
1 Back Office Person (Bookkeeper)
1 Driver / Gardener
6 Housekeepers
1 Maintenance Officer
Catering staff, and security staff, are not included as these services will be contracted
out.
7
4.4
SET-UP TIMEFRAMES
Motherwell Eco-Lodge and Chalets: Set up
Timeframe
2008
2009
2010
JFMAMJ J A S O N D J F M A M J J A S O N D J F M A
Activity
- to committee
Feasibility Report and
Business Plan
- to council
Consolidation of Erf and Rezoning
Decision on Lease or Sale of Site
Proposal Call for Developers
Developer Appointed
Contract
Drafted
Agreed
Architect Briefed
Plans Drafted
Professional Team Assembled
Bill of Quantities
Building Tender
Builder Appointed
Contractual Period
Building Complete
Furnishings, Pavings, Plantings, etc.
Hotel Opens
Key Staff Appointed
Balance of Staff Appointed
Staff Training
Marketing Programme
4.5
MARKETING AND SALES STRATEGY
The Motherwell Eco-Lodge will require a determined marketing campaign to establish
itself, to become known and to become supported. This campaign should have two
legs:
 A general campaign, to promote the Eco-Lodge before and on opening.
 A specific campaign, tailored at the four key markets (see 3.3.1).
8
4.5.1
MARKETING CAMPAIGN UP TO AND INCLUDING OPENING
This campaign is summarised in the next two tables:
MARKETING MEDIUM AND ATTEMPTED USAGE – GENERAL GOALS
MEDIUM
USAGE
Direct Contact
Website
A comprehensive website is necessary
e-mail lists
Create as extensive a list as possible – borrow from all national and even
international lists – present all Eco-Lodge events early and powerfully
Snail Mail
For people without email facilities.
Brochures
Supplied to companies who place them in hotels, shops, etc. Also for
Posters
Motherwell Supporters.
For taxis and other opportunities, restaurants, etc – particularly for
Supporters.
Direct & Personal Contact
Tour Agents, Travel Agents – all people who can direct customers to the
Eco-Lodge. They must have courtesy visits with Red-carpet treatment to
the Eco-Lodge. Particularly TV, Radio and Press persons. Also, factories
must be personally called on to encourage use of the Eco-Lodge facilities
for corporate functions, and to bring them into the Eco-Lodge’s circle.
Television
SATV
Try for regular coverage, and occasional spots on Top Billing, Carte
MNet
Blanche, etc. Try for daily spots prior to, and coincident with, the opening
eTV
BBC News
CNN
Attempt to get coverage on opening.
Other Int. Media
Radio
SABC
Attempt for saturation coverage prior to and alongside the opening. Some
Radio Xhosa
advertising should be considered.
Algoa FM
Umhlobo Wenene
Etc
Newspapers – locals
Herald
Some advertising is necessary – daily programmes for Eco-Lodge events.
Weekend Post
Attempt to get two stories per day prior to opening and over opening
Die Burger
period.
Freebies
Regional
G-R Advertiser
Grocott’s
At least one story per edition prior to opening
Daily Dispatch
Weekends
Sunday Times
Others
Once weekly articles for a month prior to opening.
Mail and Guardian
National
Star
Cape Times
One or two stories per newspaper prior to opening.
Pretoria News
City Press Sun
Argus Mercury
Sowetan
International
British, Swedish,
USA, etc
One or two stories prior to opening – many international newspapers have
South African offices or “stingers”.
Magazines
South Africa is not short on magazines – contact can lead to good review
Architectural and Art (Local
articles.
and International)
Home Magazines
Outdoors (Getaway)
Financial Mail, etc
Popular (YOU, etc)
Ladies (Fairlady, etc)
9
MARKETING CAMPAIGN UP TO AND INCLUDING OPENING - SPECIFIC ACTIONS
Medium
2 months prior to opening
Month prior to opening
Direct Contact
Put programme for opening on website
Website
Establish website
Begin with weekly emails
E-mail Lists
Create comprehensive marketing list Mailings to those without internet
Snail Mail
As for email - don’t overlap
Print Brochures re Eco-Lodge
Brochures
Create Brochure Distribution list
Print Posters re opening - Distribute 2
Posters
(BDL)
weeks prior to opening
Personal Contacts
Tour Agents, Travel Agents, Managers,
PA's and Public Relations Officers
from businesses in Coega, Markman,
Motherwell,
Councillors
Target Market in Motherwell - schools,
sports groups, etc.
NM Bay Tourism and Tourism bodies
Television
SATV
Mnet
eTV
DSTV
BBC News
CNN
Other international media
Radio
SABC, Algoa FM, Radio Xhosa, etc.
Newspapers
Locals: Herald, Die Burger, Weekend
Post, Freebies
Regional: Grocott's, Daily Dispatch
Weekends: Sunday Times, etc
Nationals
International
Magazines - All
Week prior to opening
Daily emails and mails re
opening programme and
news.
Distribute brochures through
BDL
Refresh damaged Posters
Train staff in how to contact these vital In the wisdom of the Marketing Manager, When complex effectively
people.
invite these parties personally to inspect complete, repeat invitation.
progress on site, as and when
developments occur.
Attempt to get features (Top Billing,
Carte Blanche, 50/50 etc) to do spots
to coincide with opening.
Attempt to get weekly stories on new
developments - personal contact is
vital here.
Invite all relevant persons
to gala openings, with
lunch and guided tour
Attempt to get news and
Attempt to get daily spots
feature items about imminent re major events - create
opening
newsworthy stories.
Invite to gala opening with
lunch and guided tour.
Attempt to get news spots to coincide
with opening.
Treat as for TV.
Opening
Update website daily with
news items
Daily emails and mails re
opening, events etc.
Regular personal contact - attempt to get Personal Contact - attempt to As with TV.
2 x weekly stories.
get daily story
As with Radio
As with Radio.
As with TV.
Mould stories to special interests
(Architecture, art, natural world, etc)
Provide all possible
information, phone calls etc.
10
Invite all to opening.
4.5.2
MARKETING CAMPAIGN AIMED AT 4 TARGET MARKETS
We have identified 4 key markets for the Motherwell Eco-Lodge (see 3.3.1). These
must be intensively cultivated, often through personal contacts, phone calls, etc., from
the marketing manager, etc.
4.5.2.1 THE MOTHERWELL COMMUNITY
The Motherwell community is fundamental to the Eco-Lodge, and, we believe, the
Eco-Lodge will be fundamental to the Motherwell community.

CREATIVE TOURISM
As we have noted in section 6.4 of the Feasibility Study, “Creative Tourism” is a fastgrowing part of the tourism market, and one which relates directly to the Motherwell
Eco-Lodge. “Creative Tourism” provides opportunities to tourists to actively engage in
local community activities. We noted that in Nelson, New Zealand, a network of
businesses has been established which offers tourists creative experiences: bone
carving, Maori language classes, weaving, felting, woodwork and cooking.
Similar opportunities need to be created by the Motherwell Eco-Lodge, and “tutors”
from within the Motherwell community need to be identified; suitable premises require
identification, and the tutors trained to work in these premises to offer a fascinating
and challenging experience for a cultural tourist, to involve himself/herself in.
Such activities could include:
o
o
o
o
o
o
o
Learning how to make wire sculptures.
Learning how to make beaded sculptures.
Learning how to bead clothing.
Singing with a church choir.
Xhosa language classes.
Learning how to cook traditional dishes, and how to brew traditional beer.
And many other cultural activities.
It is not envisaged that these “lessons” would happen at the Eco-Lodge, but that
community “tutors”, in suitable premises, would give visitors lessons in these types of
activities. These visitors would stay at the Eco-Lodge, which would actively promote
and support the above programme of activities.

MOTHERWELL COMMUNITY SUPPORT FOR THE ECO-LODGE
The Eco-Lodge will provide a valuable facility for the Motherwell community, and, like
all such facilities, it requires promotion and marketing to ensure that target markets
are here:
o
o
o
Regular emails and (where email does not apply) snail mails, supplemented
by personal visits and phone calls, must reach the target communities
(Motherwell Businesses, the local middle-class, schools and sport groups
etc.) which emphasize the excellent and inexpensive services this Eco-Lodge
has to offer – particularly emphasizing the backpackers facilities.
Special community Saturday and Sunday lunches, assisted by watersports
and kiddies playgrounds, etc., must be promoted.
Conferencing facilities must be promoted for weddings and community
functions, and for use by businesses, etc.
11
4.5.2.2 COEGA INDUSTRIAL DEVELOPMENT ZONE SUPPORT FOR THE MOTHERWELL
ECO-LODGE
This Business Plan holds it as a key premise that support from the businesses of the
Coega Industrial Development Zone, and the adjacent Markman Industrial Township,
will be the key to the financial success of the Eco-Lodge, for these businesses could
provide sufficient conferencing, accommodation and catering requirements to ensure
the success of the Eco-Lodge – if they support the Eco-Lodge.
The core promotional work will have to be personal contact – the marketing manager
of the Eco-Lodge will have to be a “people’s person” who establishes personal
contact with the people in each of the Coega / Markman businesses that can provide
support for the Eco-Lodge, and must regularly and repeatedly contact this person
offering specials, new promotions, etc., in order to encourage support. Mailings are
also useful, but personal support is the key weapon here. As the number of
businesses is not enormous now, but will grow over time, this type of personally
solicited support is possible and should form the base on which a good level of
support will grow.
4.5.2.3 THE GENERAL TOURISM MARKET
The general tourism market can be encouraged to support the Motherwell Eco-Lodge
by good publicity (newspaper, TV and radio stories, etc.), advertising and hard work
with tourism operators and their managers. See 4.5.1 for the broad matrix in this
regard.
4.5.2.4 ECO-TOURISM AND CULTURAL TOURISM
This market can be reached by:



4.5.3
Good publicity (particularly in the large number of nature publications, from the
very successful Getaway magazine and 50/50 TV programme, to the specialist
publications like African Birds and Birding, etc.).
Personal promotion into the Eco-industry – there are many conservation bodies;
and consultancies performing EIA’s etc. They need to be contacted and kept
personally and regularly informed.
By running an outstanding Eco-Lodge, good word-of-mouth advertising will follow
naturally.
CONCLUSION
It is our belief that the above, proposed marketing strategy – one half a general
marketing programme, the other half being aimed at the four key markets of the
Motherwell Eco-Lodge, will be sufficient, if properly and energetically run, to ensure a
high enough level of support for the Eco-Lodge to meet the Aims of this Business
Plan (see Section 2 above).
5. RISK ANALYSIS
This project has considerable risk. This includes:
5.1 COST OF CONSTRUCTION AND SET UP
The Feasibility Study showed that this project is viable at a construction and set up cost
of R20 million. This is considerably lower than the estimate provided by the Quantity
Surveyor who provided input into this project.
12
However, this estimate is high when compared to construction costs at a similar
establishment, the Pine Lodge. Here, a 40 m² chalet is built, and furnished, for
R175,000.00.
The redesign and determined negotiation can get the Motherwell Eco-Lodge and Chalets
built at the budget estimate – but it will be hard work.
5.2 DEPARTMENT OF TRADE AND INDUSTRIES SUBSIDY
Over years now the DTI have provided tax-free cash grants to subsidise the construction
of tourism accommodation (the SMEDP grants). These are at present under review,
which review will be over in early 2008. Plainly, certainty is necessary regarding the
nature and extent of these subsidies.
5.3 WILL INCOME TARGETS BE MET BY THE ECO-LODGE AND CHALETS?
This Business Plan has outlined strategies to obtain support, both generally and from the
four specifically targeted communities, that should be sufficient to ensure support levels,
and thereby income levels, are met.
5.4 CAN EXPENDITURE BE KEPT AT BUDGET LEVELS?
Expenditure targets are easier to meet than are income targets – all business crises are
first met with reductions in expenditure first, while determined attempts are made, over
time, to meet revenue targets. The same will be the case here – control over expenditure,
and, if necessary, curtailing rising costs, are vital, and targets set can be met and
maintained by determined management.
6. CONCLUSIONS
The Feasibility Study has, in considerable detail, outlined the conditions under which this
project is financially viable (section 12.3). We believe these conditions can be met, and
viability is genuinely possible.
The way forward is thus:




The NM Bay Municipality must identify and rezone the proposed site, large enough to
accommodate the proposed lodge, and with additional land for expansion.
The NM Bay Municipality must decide on whether it will sell or lease the site.
The site must then be sold or leased through a suitable public process, with
conditions as are felt necessary.
The NM Bay Municipality should also:
o
o
o
o
o

Clear up the entrance to the site, which is today filled with rubble
Construct a suitable link road from Motherwell to the entrance to the site.
Put up suitable signage, to guide guests to the site from all over Motherwell
and the Addo Road.
Perform an EIA on the proposed development.
Bring the necessary bulk services to the boundary of the site.
Thereafter the developer can proceed, and, we believe, can succeed. Timeframes
are in section 4.4.
13