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Kasigau Wildlife Limited: Tourism as an alternative Source of livelihood for the Kasigau Community

To create an elegant wilderness experience that builds a stronger Africa

Since 2003, committed conservationists and cofounders of Finch Travels, Ltd. (FTL) Frank Omondi and Boniface Nganga began a process in an attempt to offer an alternative source of livelihood to the Taita community living in the Kasigau area of Kenya’s Taita Taveta District (SE Kenya). Although Kasigau is endowed with significant natural resources and invaluable tourist attractions, the region has yet to benefit from these enormous resources, and remains one of the poorest parts of Kenya. Instead, the region’s wildlife populations and indigenous forests face a constant threat of poaching (i.e., snaring and harvesting of trees for charcoal).

Kasigau Wildlife, Ltd. (KWL), which is a joint venture between Kasigau Ranching, Ltd (K.R.L), (shareholders and owners of the 52000 acre Kasigau Ranch) and Finch Travels Ltd, intends to develop a 24 bed, high-end tourist eco-lodge to provide an alternative source of revenue for the communities in the wider area who are majority shareholders in the venture. KRL’s tourism resources promise to render a major source of income to Kasigau Ranching shareholders and to the people of the Kasigau area in general with its Internal Rate of Return (IRR) estimated at = 50.584%. Consequently, KWL is seeking strategic partners and investors to provide additional financing and voluntary skills for its conservation and eco-tourism endeavors.

Facts

Year of establishment

2005

Sales (US$)
Two years ago:
Last year:
This year (forecast): 203,436
Year 2 (forecast): 338,887
Year 3 (forecast): 77,871
Net profit after tax (US$)
Two years ago:
Last year:
This year (forecast): -66740
Year 2 (forecast): -40670
Year 3 (forecast): 116,646
Total number of Employees
Two years ago:
Last year:
This year (forecast): 23
Year 2 (forecast): 32
Year 3 (forecast): 33

How do you expect this to be financed?

Own Contribution in cash 100,000
Loans (debt) 442,857
Shares in your company that you offer to investors (equity)
Other sources 242,857
Total finance needed (US$) 785,714

The Business

What is your product/service?

Although KWL will serve primarily as a full specialty provider of excellent accommodation services for middle- and high-income clients in the greater Tsavo area, secondary services will include provision of campgrounds and facilities alongside catering and restaurant services to non-lodging clients. KWL’s value-added offering will encompass personalized attention, exclusivity, elegance, competitive rates, and specialty focus—all of which translate to increased client satisfaction.

Our interviews with properties serving the high-end segment of Kenya’s tourism industry (exclusive property owners and airlines) indicate that a significant increase in demand exists for superior and exclusive accommodation services. KWL will position itself as a niche service provider for the middle- and high-income market and will continue to promote high-quality products that add value to the client’s travel experience, while at the same time making a significant difference to the local populations hosting wildlife.

In concert with its physical design, Kasigau Lodge will embody the attributes most likely to appeal to the middle- to high-income clientele we intend to target:

Exclusivity—The lodge will offer unparalleled exclusivity to guests, as defined by its size (24 beds), obviously limiting occupancy to a maximum of 24. To provide lodge guests with the desired privacy, other visitor facilities, including the campsite, will be located far from the lodge.
Elegance—The lodge will evoke the ancient African safari tradition of elegance and style. This fulfilling, all-inclusive experience will offer guests the finest meals and unrivaled personalized attention from waiters and other staff.

Unlimited Adventure—Guests will enjoy complete freedom to choose how they spend their time within the property. Options will include day/night game drives in a four-wheel-drive vehicle, guided walks, mountain climbing (Mount Kasigau), mountain biking, horseback riding, bush breakfasts, and bush sundowners. Kasigau Lodge will also offer amenities such as laundry service and massage service.

Explain how you will sell your product/service (marketing strategy) and how you will reach your customers (distribution strategy)?

Recognizing the critical role market presence will play in the success of this venture, KWL will work to develop high visibility through promotional campaigns in the target markets in the U.S., U.K., and Europe. We will also take advantage of the market network already established by FTL and its affiliate companies both locally and overseas. KWL will contract with a marketing and public relations consulting firm to help extend the reach to the target markets.

We have made budgetary provisions in the KWL business plan to establish and sustain an effective marketing campaign, which we view as a long-term strategy employing print and electronic media promotions as well as client loyalty and viral promotion (i.e., word-of-mouth). Locally, we will continue to forge alliances with groups and individuals sharing similar objectives and focus.

We expect direct competition from virtually any property in the region. However, various factors, ranging from cost of accommodation, tour operators, and client needs (i.e., demand for exclusivity) to market visibility and distance from the main tourist circuits, play key roles in influencing prospective clients’ purchasing decisions and length of stay. KWL’s competitors include Lion Rock Lodge, Voi Safari Lodge, and Kilaguni Serena Lodge, none of which offers exclusivity, elegance, and extra adventure (e.g., night game drives, game walks, horseback riding) to the middle- and high-income clients that we plan to target. Market standards will determine much of KWL pricing, although we will attempt to maintain modest margins in Year 1. KWL will make every effort to maintain a competitive pricing policy, but by Year 3 we expect to earn the ability to charge a premium for services, as the company builds its reputation and visitor experience.

What makes your business different/better than your competitors (competitive advantage)?

Exclusivity—The lodge will offer unparalleled exclusivity to guests, as defined by its size (24 beds), obviously limiting occupancy to a maximum of 24. To provide lodge guests with the desired privacy, other visitor facilities, including the campsite, will be located far from the lodge.

Elegance—The lodge will evoke the ancient African safari tradition of elegance and style. This fulfilling, all-inclusive experience will offer guests the finest meals and unrivaled personalized attention from waiters and other staff.

Unlimited Adventure—Guests will enjoy complete freedom to choose how they spend their time within the property. Options will include day/night game drives in a four-wheel-drive vehicle, guided walks, mountain climbing (Mount Kasigau), mountain biking, horseback riding, bush breakfasts, and bush sundowners. Kasigau Lodge will also offer amenities such as laundry service and massage service.

The Entrepreneur & Management

Describe the entrepreneur & management

Since 2000, I have worked extensively in his field, conserving wildlife and directing safaris in Kenya and Tanzania. Before establishing FTL, I led treks to Kenya and Tanzania for Into-Africa Eco-Travel Kenya and Tanzania, Ltd where I acquired valuable skills of operating a responsible safari business. Having served on the board of Youth for Conservation, a Kenyan not-for-profit wildlife conservation organization, which accorded me an opportunity to collaborate with the local communities and to travel widely including the U.S. and the U.K., where I lectured on wildlife conservation in Africa at Western Kentucky University and in London during the celebration of the Born Free Foundation’s 21st year.
Currently, serving as KWL managing director, with primary responsibility for administration, marketing, investor relations, selecting new community joint venture opportunities, and ensuring achievement of KWL goals.

KWL will commence operations with 21 fulltime employees, including a senior management team consisting of Boniface Nganga and Myself.
Supporting our efforts will be Jim Kairu, chairman of Moi University’s Wildlife Department and a seasoned natural resource management expert, and Allan Bussard, managing director of The Integra Venture, a distinguished businessman, and an experienced project advisor.

KWL management team has no misgivings about its capacity to coordinate and manage the proposed Tourism Development Project. The fact that the KRL and FTL have accepted to work together towards tourism development in the area is indeed a first step towards the success of the project.

Development

How does your business improve the local living standards (social and environmental)?

FTL’s decision to collaborate with the local Kasigau people, who possess limited experience in formal business or venture capitalization, certainly presents significant challenges and risks. However, we believe their involvement in the long run will authenticate this partnership by:
- Cultivating a sense of ownership among the Kasigau community as well as fostering commitment to the business, thus mitigating risks such as political interference or others.
- Enhancing the Kasigau community’s capacity to manage formal business establishments, make informed choices, and hold its leaders and partners accountable.

This project is expected to make available direct and indirect benefits to the shareholders and the Kasigau community at large. The range of benefits includes; income in the form of dividends to the shareholders, monetary contribution to community projects (health and education), employment of locals and most importantly conservation of wildlife and forest cover. The success of this project is expected to have phenomenal contributions to other businesses, most notably the women basket business, horticulture and poultry businesses, cultural villages all working to supplement the lodge and conservancy either in the form of supplying goods or services.

The project is expected to directly create 23 permanent jobs and about 20 more on temporary jobs during construction and the first three years of operation. This is expected to increase significantly from year 3 as the business achieves the break even point. The Impact levels are expected to spread to approximately 215 people (43 individuals by 5 per house-hold).

The project is expected to significantly improve the income levels within the Kasigau Community. Conservative estimates of about Kshs. 7893427894 will be paid out as direct dividends to the share holders of Kasigau Ranch.

Needs
Advice - financial