Setting standards

June 21, 2017

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Winner of the month

Setting standards

About the Implementing organization

Name: Asosiasi Usaha Homestay Lokal Kabupaten Raja Ampat

Country: Indonesia

Year of establishment: 2013

Type of organization: Community-based association or organization / Legally recognized non-profit status / Community enterprise or business / Indigenous group or organization

Description

The members of the Association identified the need to build their business skills, to enable the homestay enterprises to become viable and resilient. However, instead of the usual ‘capacity building’, which often fails to bring about the necessary behavioural change, the Association chose to agree a demanding set of standards that all homestays must follow if they are to remain members. The skills training is therefore designed to equip people with some of the skills that they have requested in order to meet these standards. The members feel that they wish to be deemed as professional hospitality businesses.

The Association has adapted and applied the Global Sustainable Tourism Criteria (GSTC) to the homestay sector. These standards not only provide a means whereby homestay owners can start moving towards compliance with globally recognised standards, they also provide a roadmap for how to manage a successful homestay business.

Homestays that manage to comply with these hospitality standards will see more satisfied guests, better feedback on the website and other sources, thus more bookings. They should be able to differentiate themselves from the competition and perhaps charge a slightly higher price.

The standards naturally place emphasis on resource efficiency, yet are not very expensive to implement. With falling costs and rising revenues, the homestays will be in a much better position be financially sustainable.

Nature Element

Forests / Oceans / Coasts / Wildlife

Type of Action

Protection / Sustainable use / Mainstreaming into sectors / Access and benefit sharing / Pollution prevention, clean up / Awareness and education

Sustainable Development Element

Jobs and livelihoods / Peace and security / Health / Renewable energy / Climate action

Related Sustainable Development Goal(s)

           

Environmental Impacts

At the request of members of the Association, concerned by the loss of bird of paradise habitats, local community forest patrol units have been trained by local government, and are operating around the islands. Homestay owners say that this has already reduced the incidence of illegal logging.Informal deterrence by homestay owners has eliminated almost all spearfishing and other uncontrolled fishing inside MPA no-take zones in areas that homestays are close to. Some homestays report rapid recovery of coral gardens and fish populations in areas where local monitoring is strongest.Some homestays have set up regular ‘clean up days’, involving schoolchildren from local villages, to remove rubbish from beaches. Others have started separating recyclable plastics and composting their organic waste. Nearly all have stopped providing bottled water, and have instead installed water dispensers for free refills.

Sustainable Development Impacts

By focusing on an agreed set of standards, the training helped people set up and operate successful businesses, create jobs and improve lives in ways that validate and legitimise the Association’s ‘Vision for Life’. These standards are led largely by sustainable development principles.By treating people’s family enterprises as real businesses from the start, the training assumes that most people are capable of becoming entrepreneurs. The standards trust in people’s ability to learn from their own mistakes and to use their own local knowledge to find the best pathway to building a sustainable enterprise that supports a sustainable ecosystem. Association members are increasingly aware that there are risks associated with tourism, and limits to the expansion of the sector. The Association has thus helped local people to organise a collective response to the threat of careless development, and were recently able to intervene and place limits on expansions plans by a resort business.

Scalability

The Association is setting up a limited company in Indonesia (‘PT Stay Raja Ampat’) which will be owned by the Association members. This business will be the commercial entity that will handle all bookings, as an agent, and use the booking commission to cover the cost of running the website and running training courses for the homestay members. The technology platform - and the road map for business development - can be scaled up to encompass homestays in other regions.

This business will also be responsible for organising ongoing training courses for homestay owners, and this will enable the network to be scaled up in West Papua. As the business activities are self-financing (from the booking fee revenue), this scaling will not be reliant on funds from government or donors.

Replicability

Setting up this business requires some investment, which will be provided by Seventythree Ventures, a UK-based social enterprise. This new company aims to become an investment partner for other community-driven tourism ventures around the world, using the same template as the Association model in Raja Ampat.

The commercial logic is that by linking homestays to a modern bookings and payments system, it will be able to offer curated tours to out of the way locations anywhere in the world, all owned and operated by local communities that are sustainably managing ecosystems.

From an investment point of view, the UK business will be the payment portal for the bookings, so in banking language it is 'factoring the receivables ledger' of the local association-owned business. This enables the UK business to act as an ‘impact investor’, but with reduction of the risk, and thus the ability to release more capital, and replicate the model more quickly.

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