Trabajos futuros

Enterprise development

Estimates of the contribution of wildlife-based tourism to the macro-economy in Botswana are discussed in detail in chapter 12, and will not be dealt with here. The sub-sector involves use of fixed accommodation (lodges) and use of campsites by mobile guided and self-driven tours. Tlusty (1987) and Africa Asien Bureau (1987) were of the opinion that the economic contribution per tourist among fixed-facility users is much higher than that for campsite users, in particular the self-driven ones. The results given above lend support to this. As described above, policy now places priority on the development of up-market facilities. An important component of this is the development o f lodges with capacities of between 12 and 50 beds. In the high quality wildlife areas of the Okavango/Chobe region, fixed units of this type, which can maximise both luxury and personal services, within carrying capacities o f around 700

hectares per bed, are seen as being able to maximise eco-tourism use values. Below, the micro-economic characteristics of lodge development are examined.

A financial/economic model of a typical medium- to large-scale wildlife-based tourism enterprise has been developed. The basic model is for a game lodge on the edge of a park within the physical and economic environment in northern Botswana. Unit capacity is 30 beds, an average figure. The land requirement, based on the estimated tourist carrying capacity for the high quality northern areas of 700 hectares per bed, is 21,000 hectares. A wildlife population containing a spectrum of high-value species at a density of 32 hectares per large stock unit equivalent (LSU) is assumed. This conforms with recent aerial survey results for the Okavango Delta.

The game lodge enterprise caters for significant, unsatisfied and expanding demand for quality game lodge experiences notably in the European, USA and, increasingly, "Pacific Rim" markets. In line with empirical evidence (Domestic Technology International, 1991), a ratio of 75 percent long-haul tourists to 25 percent regional tourists is assumed for the clientele.

Based on evidence of Tlusty (1987) and Fowkes (1985) an average occupancy rate of 33 percent is assumed as being easily attainable. It is assumed that the typical operation is 25 percent loan financed. The model includes amortisation of this at 10 percent interest over asset life. It also includes provision for capital replacement (depreciation) with regard to equity financed assets. W orking capital requirements are assumed to be 30 percent of operating expenditures. Interest on this is calculated at 15 percent. The model is for one lodge, but it is assumed that administrative costs are shared between three such units.

For the financial analysis a land rental of three pula per hectare is assumed. This would be extracted by the district land board and would be refunded to the district council. The profit before tax, a net cash income, amounting to P14.70 per hectare, is assumed to be shared between the landholders (the community with responsibility for the area) and the commercial operators (the company which would operate the business). It is assumed that for this enterprise, employment for 39 would be created. A financial rate of return and a financial net present value at a 12 percent discount rate were calculated over ten years.

The tourist lodge enterprise model has also been analysed in terms of economic values. To achieve this, the assumptions on shadow pricing, described in chapter 2, have been used. In conformity with these, foreign inflows and outflows have been treated as benefits and costs and foreign financing is assumed to amount to 50 percent of long-term requirements. Repatriation o f interest and loans is thus assumed to amount to 50 percent. Outflow o f profits is assumed to amount to 50 percent, implying both leakage and repatriation. This is in accordance with empirical evidence to hand. An economic rate of return and an economic net present value at a six percent discount rate have been calculated over ten years. It should be noted that the economic valuation does not, at this stage, include the economic opportunity cost of land or the relevant economic costs of government expenditure in the wildlife sector.

The enterprise, at full production, provides ownership with an annual net cash income of P 3 15,200. The financial rate of return is 18 percent after ten years. W ith the assumed 12 percent cut-off rate, investment in tourist lodge enterprises is financially attractive over this period. A financial rate of return over the cut-off rate is only attained after six years, however.

In economic terms the domestic resource cost ratio (the ratio of domestic currency required to earn a unit of foreign exchange) is 0.30. This is favourable, reflecting a comparative advantage for the enterprise. The economic rate of return is 28 percent after ten years. Given an assumed six percent economic cut-off rate, this type of development appears to be very attractive economically.

Sensitivity analysis of the model using various changed assumptions was carried out and the results are depicted in Table 4.8. The results in the table indicate that the viability of the enterprise is sensitive to changes in occupancy rates. Financial profitability is m ore highly sensitive to this factor than economic viability. At occupancies below 28 percent the enterprise is financially unattractive after ten years.

The distortion of financial values from economic ones, at lower occupancy rates, is almost certainly due to the inflexible tax system whereby government revenues are derived from fixed licence and entrance fees. It suggests that more govermnent support could be justifiably

T a b le 4.8: R esults of sensitivity analyses on m odel of w ildlife-view ing lodge (internal rates of return and net present values over ten years, financial/econom ic model, northern Botswana, 1990)

In tern al ra te o f re tu rn (%) N et p resen t value (p u la ’000) Financial (10 yrs) Econom ic (10 yrs) F in an cial (10 y rs, 12%) E conom ic (10 y rs, 6%)

V a ria tio n in occupancy ra te

23% occupancy 0.2% 17.1% -897.2 1,005.9 33% (normal) 17.5% 27.5% 437.7 2 ,182.6 43% occupancy 31.0% 36.1% 1,676.4 3,359.5 V a ria tio n in p ro d u ct prices

+ 10% 24.5% 31.3% 1,028.3 2,634.5 Normal 17.5% 27.5% 437.7 2,182.6 -10% 10.0% 23.6% -152.9 1,730.6 V a ria tio n in cap ital cost

+ 10% 15.5% 25.4% 286.0 2 ,0 7 1 .2 Normal 17.5% 27.5% 437.7 2,182.6 -10% 19.8% 2 9 ^ % -589.3 2,2 9 3 .9

directed towards wildlife-viewing tourism, perhaps specifically directly aimed at increasing occupancy rates.

Changes in the price of the tourism product also affect the viability o f the enterprise but not to the same extent as occupancy rates. This is evident in Table 4.8. The financial sensitivity to product price change is greater than the economic sensitivity. The results of the demand analysis above, where demand was found to be price elastic, suggest that an actual drop in prices for lodge accommodation would tend to be compensated for by an increase in tourist numbers (or occupancy) and turnover. The enterprise viability is less affected by changes in the costs o f capital items (or the level of expenditure on capital items). In this case, which is

depicted in Table 4.8, there is also a difference between the effect on economic returns and that on financial returns.

Protected area development

In this section, attention is paid to the degree to which the net economic benefits of game- viewing tourism enterprises can justify government expenditure on protected area development. Cost-benefit analyses o f national park or game reserve development have not been commonly performed in Africa, mainly because most benefits have been perceived to be external and difficult to quantify. Mitchell (1969) and Thresher (1976), working on Amboseli National Park in Kenya, and Settlement Planning Services (1991) working on the proposed Madikwe Game Reserve in North W est Province, South Africa, undertook financial cost- benefit analyses of government investment in park development, with benefits measured in terms of financial use values. In all cases, positive financial rates of return to expenditures in park development were measured.

Boonzaaier and Brockett (1987) undertook a preliminary financial evaluation of the Pilanesberg National Park and found a positive financial return on park investment costs, in terms of stock "on the hoof". Davies (1993) followed this with an attempt to weigh up the costs and benefits associated with Pilanesberg. This analysis was based on financial prices but included some economic elements such as consumer surplus and non-use values. Engelbrecht and van der Walt (1993) similarly, attempted to compare the value o f the K ruger National Park in South Africa with that for the same site under agriculture. This was in financial terms but with qualitative consideration of some economic values. The last three analyses made use of unconventional methods and can provide only an indication of positive financial values for the parks involved.

The Management Plan for Moremi Game Reserve, in the Okavango Delta in Ngamiland District, makes provision for infrastructural and manpower development within an ecological zoning framework (Kalahari Game Services, 1991). The plan was appraised by m yself with R. Hartley in 1991. While it is likely that the value of Moremi Game Reserve is dominated by non-use values (see chapter 2), it does contain some measurable use values in the form of wildlife viewing tourism. Therefore, while the primary return on investment in plan

implementation will be in non-use values, it was deemed worthwhile to see to what extent plan implementation would be compensated for in terms of utilisation benefits.

An economic cost-benefit model was constructed for the management plan in which expenditures were those of plan implementation and benefits were measured in the form of incremental net economic benefit resulting from implementation. In the model, anticipated economic benefits include increased net income to game lodges, mobile safaris and campsite use. These are, prim arily, the result of expected increases in occupancies in lodges and of expected increases in both capacities and occupancies of campsites. Data presented by Fowkes (1985) suggests that existing facilities have an average occupancy rate of 21 percent. It is assumed that plan implementation will make it possible for the occupancy rate to be increased to 50 percent after eight years. A 50 percent rate is considered easily obtainable by Gibson (1990) and, given expected rapid growth in tourism demand in the region, this seems a reasonable assumption.

The economic benefits also include a very limited effect of increased game stocks and game dispersal on economic benefits to be derived from safari hunting and community wildlife use on neighbouring land. Benefit of backward linkages in the form of provision of fuel-wood and production o f crafts from surrounding areas is also included.

Economic enterprise models for wildlife-viewing lodge development, safari hunting and community-based wildlife use, described above and in chapters 5 and 6, were used to estimate the incremental net benefits. The net benefit per tourist night for mobile safaris and camping is assumed to be 33 percent and 20 percent, respectively, of that for game lodges.

Constant 1991 economic values (with shadow pricing based on assumptions described in chapter 2) are used. In the calculation of costs, maintenance is calculated at five percent of initial cost per annum for buildings and infrastructure and six percent of initial cost per annum for vehicles and equipment. Operating costs consist of manpower salaries, wages and allowances. A discount rate of eight percent is used to reflect the opportunity cost of public sector capital. The net present value at eight percent and the economic internal rate of return for the program me have been calculated over 20 years.

The results of the economic cost-benefit analysis are shown in Table 4.9. After 20 years the economic rate o f return is 26 percent and the economic net present value (at eight percent) is P26 million. This represents a highly favourable return. The anticipated flow of economic benefits is highly dependent on the assumption that increased occupancy rates will result from plan implementation. The effects on the model o f varying this assumption are shown in Table 4.9. It is shown that even if the occupancy rate only rises to 37% , the net present value remains positive.

Table 4.9: Results of sensitivity analysis on the cost-benefit model

for Moremi Game Reserve management plan (Botswana, 1991)

Economic rate of return (20 years)

Economic net present value

(20 yrs, ® 8%, P’OOO)

Attained occupancy rate* 37% 51% (expected) 65% 11.0% 2T5% 3T2% 3,436.3 25.263.0 44.356.0

* Initial occupancy rate assumed = 21%