The issue: striking a delicate balance between building a profitable new business, and protecting the environment.
The situation: The Cuchara Resort has had several false starts, and it’s new owners are determined to create a successful year-round vacation resort that does not destroy the local ecology. To finance this new venture they need to sell 110 building lots adjacent to the resort.
Our role: We conducted a feasibility study to evaluate both the resort and the building lots. We started by taking an in-depth look at seven potential competitor resorts, and six alternative strategies. We reviewed the location, the local community, the existing business plan, funding strategy and more.
Our solution: Our recommendation spanned several areas, starting with their potential competitors. It was clear that if Cuchara positioned itself head-to-head with their main,
established competitors as was planned, the result would be a failure. The high cost and the extended time to generate sufficient traction would probably kill the business. So we recommended a better solution that out-flanked competitors; a new emerging concept best described as an Eco-resort.
Eco-resorts are popping up around the world and proving to be in demand. But there’s very few in the U.S. and Canada, and none that compete with Cuchara. Eco-resorts have the minimum negative impact on the environment and the local population. They cater to a fast growing eco-conscious population which is multi-aged, active and very often affluent.
The original plan called for the construction of a large hotel, but we envisioned another way to solve many problems in one stroke. Instead of selling traditional building lots that require frontage to a road and where the design of the properties is largely uncontrollable,
we recommend keeping ownership of the land and leasing it to fractional owners of stilt homes that will be constructed by Cuchara and manufactured using local labor and materials. Stilt homes have the minimum impact on the land, and can be placed in the trees, rather than requiring their removal. By selling fractional sales and retaining six months of ownership, Cuchara will create a “distributed” hotel that can return a portion of rental fees back to the fractional owners, for unused portions of their ownership. Cuchara retains control over the land, fractional sales are easier and quicker to secure than traditional sales of real estate, there’s no need to build an expensive and damaging hotel, and cash flow is accelerated.
Results: Cuchara is on its way to fruition. Our study is being used to generate initial funding and our client is planning for a launch in the Spring of 2014.