The Business of Ecolodges
There is no hard and fast definition of an “ecolodge.” Like the term eco tourism, there are some generally accepted principles that ecolodges incorporate into their design and operation.
- Ecolodges are designed to be in harmony with their surrounding environment; and they incorporate “ecologically-friendly” management practices, adhering to the triple bottom line–economic, social and environmental sustainability;
- They are located in close proximity to wild, scenic or protected areas, and they strive to conserve the natural environment;
- They enhance the economic vitality of the local communities in which they operate through local sourcing of needed materials and supplies; hiring and training of local residents; contracting with local businesses; and direct contributions to the community;
- Ecolodges seek to preserve region’s culture and heritage through interpretive and cultural programs, and the promotion and protection of local heritage sites; and
- In industry parlance, a lodge has less than 150 rooms. If the property with more than 150 rooms is “ecologically managed,” it could be considered an “eco-resort.”
Ecolodges emerged as a market niche in the 1990s, as eco tourism grew and flourished. The International Finance Corporation of the World Bank, the IFC, conducted the first comprehensive survey of over 6,500 “nature-based” lodges in 2004. While successful ecolodges share a number of characteristics, the report, “Ecolodges: Exploring Opportunities for Sustainable Business,” found location to be the key factor:
- 60% of the eco lodges were on the periphery of a protected area; and
- 39% were inside a private reserve or protected area.
After location, travelers choose a destination based on price and value of the property. The study found the market is still dominated by low cost accommodations:
- 73% were budget accommodations (less than $50 per night)
- 18% were mid-range ($50 to $100 per night), and
- 7% were over $100 per night.
The study concludes,
“Given the small size of the consumer market able to afford high-end lodges and the consumer demand for mid-range accommodations, it would appear there is an insufficient supply of mid-priced ecolodges today. The demand for a greater supply of mid-priced ecolodges in eco tourism destinations worldwide will increase only as the professional middle class of baby boomers retire, travel more frequently and seek comfortable accommodations in the wildland areas they have always dreamed of visiting.”
EplerWood International published a companion study for the International Finance Corporation, “Review of International Markets, Business, Finance and Technical Assistance Models for Ecolodges in Developing Countries.” Megan Eplerwood says travelers may consider a destination’s ecological practices when choosing an accommodation, but this remains a secondary factor. “The price and value, and the attractions and activities are the primary considerations for travelers.”
Market research on eco travel can be tricky, says Eplerwood. It often falls victim to “green skew,” that is, travelers who express concern over environmental and social issues don’t always act on these concerns. She says, “It is difficult to measure, and the market is changing rapidly,” as travelers and the industry responses to climate change.
For more information:
Ecolodge Studies:
- “Ecolodges: Exploring Opportunities for Sustainable Business,” International Finance Corporation, 2004
- Ecolodge Marketplace, Part 1 (PDF, 3.2 MB)
- Business Case for Ecolodges, Part 2 (PDF, 1.3 MB)
- Study Appendix, Part 3 (PDF, 1 MB)
- Review of International Markets, EplerWood International, 2003 (PDF, 1.6 MB)
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