How do they connect? The Hospitality sector and the adaption of a Mainstream Business Model.

By November 21, 2017INDIA, News

Mainstream Impact Investment is a New Economic Paradigm: actively seeking out those businesses that look to regulate the negative impacts of their activities on the communities in which they operate as well as our wider society and on the environment at large. And not just because they are required to do so as part of a regulatory, tick box exercise; but because they know this will make them more resilient over the long term, and businesses that are better equipped for the long term will do better in the short term too. That’s why Red Ribbon Asset Management has placed Mainstream Impact Investment at the heart of its portfolio management strategies since the company was founded more than a decade ago. 

And a good example of just how effective a business model this can be is currently to be found in the lush foothills of the Madhya Pradesh Region in India, where a recent study into ecotourism found that by actively reducing the negative impacts of tourism on the environment, businesses in the sector would also deliver substantial benefits for local communities which can underpin their long-term viability. No less than 45% of revenues generated through ecotourism in Madhya Pradesh went directly to local communities according to the study, The Value of Wildlife Tourism for Conservation and Communities, which was conducted across the Bandhavgarh, Pench, Panna and Kanha National Parks in Madhya Pradesh earlier this year.

The Study looked at 145 eco-lodges overall, all of which provided significant income-generating opportunities for the local communities in which they were located: generating INR 166 crore each year, some INR 75 crore of which went directly to local communities (about 45% of the aggregate yield so leaving a healthy surplus for the business operators, further bearing out the viability of the model).

And at an even higher altitude, in the foothills of the Indian Himalayas to be exact and close by the Nepalese Border, you’ll find the hugely successful Shakti 360 Leti Resort which is built and operated on eco friendly principles: almost all of the units on the site run on solar power, wastewater is reused and there is an ongoing commitment to the local community with buildings being leased from the community (not bought) with the deliberate objective that the community owners can then profit from the enterprise. Again, it is a good example of a business structured so as to be resilient and robust for the long term and it is also another good example of the success of the Mainstream Impact Investment Model.

And closer to home, of course, it is a model that has also been working extremely well for Eco Hotels, the world’s first carbon-neutral, premium value hotel brand which combines all of the best features of top-grade hospitality with a commitment to doing everything possible to secure the wellbeing of the planet and the dynamism of the local communities in which it operates. Red Ribbon is the founder of Ecolodge and it has now embarked on an ambitious programme to expand the brand into the BRIC territories and India in particular. By doing this it is building still further on its core commitment to Mainstream Impact Investment strategies and at the same time delivering above market rate returns for its investors.

Red Ribbon CEO, Suchit Punnose said:

A recent major study into eco tourism in Northern India found that through actively reducing their negative impacts the environment businesses engaged in the hospitality sector could not only deliver substantial benefits for their local communities but also underpin and reinforce their own long-term commercial prospects as well. It’s a model that sits at the heart of Mainstream Investment Strategies, which recognise that long-term viability can also be a recipe for short-term business success.

Read the Value of Wildlife Tourism for Conservation and Communities Report here

Read about the Shakti 360 Leti here

 

 

Sarah

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Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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