The Economics of Running a Lodge

Tourist accommodation, including safari lodges and camps, plays a vital role in the success of a country or region’s tourism industry. That said, the successful operation of a lodge doesn’t just happen overnight; it demands innovation, perseverance, and resilience. It is an exciting but often challenging industry.

Nkwazi talked to several executives working in the lodge business to better understand the opportunities in the sector, the unique challenges they face, and how they address them.

Recently, the COVID-19 pandemic presented severe challenges to enterprises in this sector. It is heartening to note that most establishments remained resilient during the harshest times of the pandemic and continued to pay their staff, albeit under difficult circumstances. 

One such operator, Time + Tide, established strict hygiene protocols to ensure guests felt safe. With lodges and camps in South Luangwa, Lower Zambezi, Liuwa National Park, and Madagascar, they went a step further by equipping their employees with additional means of earning income, helping them start chicken rearing and fish farming businesses which continue to operate to date.

“When you start a safari lodge, you must consider much more than just building expenses. For example, a hotel in town has access to council water, electricity, public transport, and many other amenities that most people running a business take for granted,” Adrian Coley, managing director of the South Luangwa-based Flatdogs Camp, shared.

Adrian also spoke about other challenges, including ensuring the natural resources they rely on for their business are well looked after, adding that there is a need to work with communities and ensure that the benefits get back to the people on the ground to make sure they understand the importance of protecting the resources. 

“We also have to invest in infrastructures such as roads and crossing points to ensure that the product we offer guests is of the highest quality. The opportunity offers us to be part of the solution in looking after these internationally important and incredibly fragile areas in which we are privileged to live and work. So, it might be hard to make money, but the surroundings in which we operate are amazing,” he enthused.

Most remote camp and safari operators spend considerable time and resources planning and setting up access to the most basic amenities essential in operating any business. “To succeed, you must have the right team on the ground. You can spend all the money in the world, have beautiful structures, and have the latest kits and equipment, but if you don’t have a dedicated, trained local team, you won’t go far in this business,” Glenn Evans, general manager of Time + Tide, said.

He pointed out that the discerning tourist wants a different kind of adventure. In his experience, a balance of a well-trained team, a touch of warmth, and cultural expertise makes for a winning combination.

With peak periods typically being between May to October, Glenn also highlighted the business’s seasonal nature, making it difficult to operate efficiently during off-peak periods as there is a very narrow window of opportunity in the industry. “From a geographical perspective, accessibility is constrained during the rainy season, thus affecting business operations as costs are ongoing. However, there is a huge opportunity for business as more people realize travel’s value. Zambia is a growing market,” he pointed out.

Glenn says that most of Time + Tide’s camps have only four to six rooms, thus assuring a high level of exclusivity coupled with value for money on the services offered.

It takes ingenuity and business acumen to offer luxury experiences at relatively affordable prices and maintain a level of exclusivity while remaining accessible.

Flatdogs achieves this by using a model that offers enormous flexibility and different experiences within the same lodge environment. Adrian elaborates, “This allows us to work with the economies of scale without making it feel like we have too many people around. It is difficult to keep the prices down in smaller, even more, exclusive lodges as the overheads of running a safari lodge are so high.”

Mabel Sissing, the CEO of Palmwood Lodge, identified staffing, finding and retaining clients, and funding as some of the bumps to successfully operating an accommodation business.

“Opportunities are drawn from identifying clients and having head starts in responding to their needs so that they keep coming. Retention is key; thus, when we have clients, we endeavor to meet their requirements,” she elaborated.

Good management practices and financial discipline have seen Palmwood Lodge grow from four rooms in 1998 to 51 ensuite rooms and other facilities such as a gym, swimming pool, conferencing, and lush gardens. Management has reinvested and opened a new lodge with a sanctuary theme on a 200-hectare piece of land on the outskirts of Chongwe.

With the Zambian government pledging to prioritize job creation and reduce business costs, local tourism has great potential. “If the cost of doing business reduces, more jobs are created, and the nation’s wealth increases, more Zambians will see leisure travel as a real goal, and that is where we need to get to,” Adrian notes.

All establishments mentioned in this article confirmed that they charge lower rates for local tourists to promote domestic tourism. 

Calls have been made for Zambia to increase its tourism spending and improve its infrastructure, making it comparable to other African countries with more developed tourism sectors. Most tour operators agree that the licensing field should be simplified and more enabling at a macro level. “Many policies have to be realigned to help local businesses. Incentives should be introduced deliberately to foster the expansion of local businesses,” Mabel contended.

While location remains the most critical factor in running a successful operation, many other elements are also crucial in determining an operation’s success. The hospitality industry is heavily service-oriented and both labour and capital-intensive. It is a myth that lodges are easy to run; there is no quick buck to be made here. The industry requires passionate leadership and a particular lifestyle that suits those that do it for the love of the environment, animals, and the community.