HOMESTAY ON ANNAPURNA CIRCUIT Global Enterprise Experience 2013 Team 53 Marc Schoppman - New Zealand, non-native English speaker (group leader) Avuyile Andisiwe - South Africa, non-native English speaker Cao Jia Qi - Macau, non-native English speaker Dora Cecilia Balint - Hungary, non-native English speaker Gaetan Ndahimana -Rwanda, non-native English speaker Júlia Anna Balint - Hungary, non-native English speaker Julio César Arias Castaño - Colombia, non-native English speaker Sujan Adhikari - Nepal, non-native English speaker Table of Contents Executive Summary..........................................................................................................................................1 1. Introduction 1.1 Targeted Region.....................................................................................................................................1 1.2 Targeted Social and Economic Issues....................................................................................................1 2. Business Overview 2.1 The Business Model..............................................................................................................................2 2.2 Competitors in the Market.....................................................................................................................2 2.3 Marketing/Promotion.............................................................................................................................2 3. Value Creation 3.1 How Millenium Goals are Addressed....................................................................................................3 3.2 ‘The Female-Entrepreneur-Support-Fund’............................................................................................3 4. Organisations to Establish Partnerships With........................................................................................4 5. Future Outlook 5.1 Scalability of the Business.....................................................................................................................4 5.2 Modifications.........................................................................................................................................4 6. Financial Plan.............................................................................................................................................4 7. Risks and Barriers......................................................................................................................................6 8. Conclusion...................................................................................................................................................6 References..........................................................................................................................................................7 Executive Summary The presented proposal deals with the introduction of a homestay concept to the rural families living alongside the Annapurna Circuit in Nepal, a famous destination for hikers from all around the world. Our organisation supplies rural households with goods and knowledge needed to accommodate these tourists and in return receives a small part of the generated proceeds. Issues tackled thereby include gender inequality, as the organisation by and large works with the women of the households, and general poverty. The business described here is economically sustainable as it creates a net present value of NZ$ 56,953.55 at an initial investment volume of NZ$ 500,000. It is not designed to exploit a business opportunity to maximise returns but to make a socially valuable contribution. The business thus addresses several Millennium Goals of the UNDP while it is a self-sustaining and secure investment. Investors with a drive for social justice are asked to support our ambitions. 1. Introduction 1.1.Targeted Region The Annapurna Circuit extends in Lamjung, Manang, Mustang and Myagdi districts of Gandaki zone in the north western part of Nepal. Lying in the lap of the Himalayas, the circuit offers spectacular sights of flora, fauna, hills and mountains including Annapurna, Nilgiri, Tilicho, Machhapuchhre and has been widely recognized as a natural paradise. It was listed as one of the top ten treks in the world by many entities (greattreks.com, n.d. and huffingtonpost.com, 2012). In 2009, 132,929 tourists arrived with the purpose of trekking and the average growth rate is 16,8% (Central Bureau of Statistics, 2010). The Annapurna trekking extending from Beshisahar to Pokhara is a three week journey into the nature and the cultural diversity of this region. There are hotels and lodges with moderate facilities in some villages, while in other areas the trekkers stay in tents and camps overnight. Dharapani lies in the Manang district and is usually the destination for an overnight stay for the fourth evening. It lies in a mountainous region, which makes large scale agriculture and trade business almost impossible due to climatic and geographic factors. The physical beauty of the region and the high number of tourists on the trekking circuit are the plus points, thus have potential to be utilised as an income generating source for women. 1.2.Targeted Social and Economic Issues The natives in Dharapani consist of people belonging to Sherpa, Gurung and Thakali culture. Some Brahmin and Chhetri households are also there in this village. The majority of people are engaged in a subsistence form of agriculture. The village does not have access to any form of transportation and the nearest town, Beshisahar, is at a two-day walking distance from the village. Among the age group of twenty and above, literacy rate among males is about 30% while the figure drops to a negligible number for females. Males head their household and are primarily engaged in agriculture. Some of them act as porters to the tourists and trekkers visiting the Annapurna region. Females are bound to the household activities limited to domestic household works and parenting children. Trading locally produced agricultural products and porter charges are the only sources of monetary income to the people in this region and males are the direct recipients of it. Women do not have any economic power, consequently are deprived of social power as well. The majority of people in this region fall below the poverty line. 2. Business Overview 2.1.The Business Model The idea behind our business is to let local women participate in the wealth which tourists bring along. This is to be accomplished by introducing the concept of homestays. Our employees get in contact with families and we supply the households with beds, bed clothes, dictionaries, and basic medicine to enable them to accommodate tourists without their own investments. As enough households in one town join the network, clusters of around six households are built which work together as a household group. These clusters, which consist of representatives from all households, are led by a woman (household group team leader) who gets assistance from our office in Kathmandu regarding operational activities. The tourists arriving in Dharapani are divided into groups and each group is handed over to one household group team leader. The team leader assigns the tourists to particular households in her group. Each household accommodates three to four tourists at a time. The team leader is responsible for the well-being of the tourists assigned to her group. The households will provide accommodation, dinner, and breakfast to tourists, as it is common for lodges in Nepal. The whole package will cost tourists 200 Nepalese Rupees (US$ 2.28), which is a competitive price on the Annapurna Circuit. Of these NPR 200, we give NPR 130 (US$ 1.50) to the women of the households. The rest will stay with our business in exchange for the services we provide. These services are manifold. At first, we establish the network of households and provide them with necessary goods. Then, after these foundations are laid, our company attracts tourists with marketing activities and distributes the tourists to the households as they do not have the capital to promote their services themselves. To preserve the standards of accommodation and to guarantee valuable experiences to the tourists, our staff will maintain a database of quality assessments made by tourists after their stay with the families. In order to overcome resistance of the men, who might not immediately accept women being given leadership roles and rewards, men are also partly integrated in the project. In addition to that, our staff will be trained to convince them of all the benefits our model brings to them. 2.2.Competitors in the Market There are two alternatives to homestays: hotels and smaller lodges. For most of the hikers, the Annapurna Trekking Circuit is not a leisure trip, but an adventure during which they can encounter the local people and culture. These insights they can get by living directly with local residents. Hearing their stories is what differentiates our homestays besides the price. Thus hotels are not considered as our competitors. Our main competitors are the individual lodges which are most comparable to our homestay concept. As the majority of these lodges are run by local residents, the quality of services depends on the hospitality of the family members, which leads to uncontrolled variability. Our business, in comparison, provides facilities and training to the household families, a common network/brand name, a shared