Indonesia May be the Next Frontier for Ecotourism Entrepreneurs

Ecotourism in Indonesia can be an emerging trend of which could be the next big thing. Here’s a guide on how to start an ecotourism business within the archipelago.

Despite occupying only 1.3 percent of Earth’s land surface, Indonesia can be one of the richest nations in terms of biodiversity. The archipelago’s more than 17,000 islands are home to roughly 12 percent of the planet’s mammals, 16 percent of the planet’s reptiles along with also also amphibians, 17 percent of the planet’s birds, along with also also 25 percent of the global fish population.

The word ‘ecotourism’ can be defined as tourism directed toward exotic, often threatened, natural environments, particularly to support conservation efforts along with also also observe wildlife.

Indonesia has tremendous potential to build out its local ecotourism space, as the sector remains largely untapped nationwide. Currently, there are only a limited number of destinations across the country of which offer excursions along with also also accommodations of which can be referred to as ecotourism.

With This particular in mind, there are many potential green investments to be made within the local tourism sector, many of which can marry the growing demand for green tourism with reduced operating costs.

Lorna Dowson-Collins coming from the UK saw This particular opportunity more than a decade ago, when she lived in Kalimantan. Back in 2005, she along with also also her business partner Gaye Thavisin, established a company called Kalimantan Tour Destinations (today known as WOW Borneo), an ecotourism company based in Palangkaraya, Central Kalimantan. Lorna along with also also Gaye pioneered ecotourism in a part of Indonesia of which at the time had no tourism to speak of.

“We shared a passion for Kalimantan along with also also its people with their fascinating culture, the beautiful forests of diverse flora along with also also fauna, along with also also especially the iconic orangutan,” says Lorna in an interview with Indonesia Expat.

The business idea behind Kalimantan Tour Destinations revolved around Kalimantan’s rivers, which provide access to exploring the island’s natural attractions.

“Inspired by all the above, an idea for a social enterprise emerged. We would likely build a boat of which would likely both attract along with also also transport guests through the beautiful forests along with also also into inaccessible villages, along with also also provide comfortable accommodation,” explains Lorna.

The boat would likely bring more business to the villagers who would likely act as guides. coming from the locals, visitors could rent canoes, go on fishing trips, collect traditional medicines within the jungle, along with also also learn to make indigenous handicrafts.

yet before launching the startup, Dowson-Collins had to learn about the legal procedures involved with setting up an ecotourism company in Indonesia. Because both Dowson-Collins along with also also Thavisin were foreigners, their company had to be listed as a foreign investment company, incorporated in Indonesia.

Today, setting up a foreign investment company in Indonesia can be a tricky business. In almost every case, your business will have to submit an investment plan with approximately Rp.10 billion in capital (US$750,000). According to market entry services firm IndoSight, 25 percent of of which capital needs to be paid-up in advance along with also also deposited into an Indonesian bank account. The firm says enforcement of This particular minimum capital rule wasn’t in place until 2015, which means the item was surely much easier for Kalimantan Tour Destinations to hack the red tape along with also also set up a foreign investment company back in 2005.

Kalimantan Tour Destinations’ legal function can be a water recreation company along with also also travel agent. the item deals in activities as a boat owner along with also also operator, tour operator along with also also developer, along with also also as a designer of tourism publications. The owners claim the business can be run in accordance with all the local laws related to employment along with also also taxation in Indonesia.

“We were lucky during our setup because we had a Great lawyer in Jakarta, Pak Suprianto, along with also also the governor at the time urged all departments to help us get permits quickly,” recalls Dowson-Collins.

In order to set up an ecotourism business, one must obtain a nature tourism development permit. yet before you can do of which, you have to obtain a recommendation letter coming from a regional head of the area (like a governor).

In order to get the recommendation, you have to submit a working plan as well as an environmental impact analysis. After getting the recommendation, founders must submit a proposal to the Environment along with also also Forestry Ministry. The scheme should include a project proposal, pre-planned tour package outlines, as well as an economic along with also also financial analysis. You also have to submit a map of the area in which you aim to run the ecotourism business, having a topographical scale of 1:25,000 (the devil can be within the details).

The next document to submit can be a complete set of data related to your company, such as a company profile, tax documents, bank information, along with also also a financial balance sheet.

Finally, ecotourism founders in Indonesia need to submit a power purchasing agreement. Essentially, This particular can be a contract between two parties, one which generates electricity along with also also one which can be looking to purchase electricity. This particular part can be tricky if you intend to set up your business in a remote Indonesian jungle of which may not yet be on a power grid.

Tourists enjoy visiting a Dayak village in Central Kalimantan as part of WOW Borneo’s ecotourism tours | Photos Angela Richardson

Dowson-Collins says having a strong network within the country will help smooth out most of these processes. “We built Great relationships along with also also were supported because people were excited by the idea of our business,” she says. “I believe having been brought up in Indonesia, speaking [the language], along with also also loving Indonesia helped to develop these bonds.”

Despite having a positive rapport with the government, Dowson-Collins says she did not receive any subsidies coming from the state.

In order to raise capital to kick-start their ecotourism firm, Dowson-Collins along with also also Thavisin entered their business idea into a Dutch-funded competition called Business in Development. The contest sought out innovative ideas for developing businesses of which benefited local communities along with also also the environment.

Out of 1,600 participants worldwide, Kalimantan Tour Destinations was one of the winners back in 2006. The prize money of €6,000 helped Thavisin along with also also Dowson-Collins cover legal fees in Kalimantan.

“Although we did not receive any subsidies, we were greatly supported by the governor of Central Kalimantan, A. Teras Narang, who launched our newly built boat the Rahai’i Pangun,” explains Dowson-Collins. “The local tourism department helped to promote our enterprise by inviting agents along with also also the media to support us.”

Fast forward to today. After running an ecotourism business for more than a decade, Dowson-Collins along with also also Thavisin acknowledge having their ups along with also also downs. According to Dowson-Collins, the biggest challenge in running an ecotourism business in Indonesia can be actually the environment itself, which continues to suffer coming from annual forest fires as a result of irresponsible palm oil operations.

“This particular caused our business to close down for several months,” she says. “The some other challenges are normal business challenges – marketing, training Great staff, ensuring of which we are a responsible employer along with also also bringing benefits to the local communities.”

Lorna admits of which the company faces an added obstacle of finding a brand-new partner, one who can eventually run Kalimantan Tour Destinations when she along with also also Thavisin decide to retire.

“Gaye along with also also I will not be able to run the business forever, along with also also the question of finding a suitable partner or selling the business to someone who shares our values can be one of which challenges us,” she says, adding of which within the end, the most important component of running an ecotourism business can be passion.

Regardless of which ecotourism sector founders choose to operate in, the co-founders believe

you have to work with passion, along with also also make sure of which whatever you do incorporates a positive impact on the people along with also also the place.

Dowson-Collins believes Kalimantan Tour Destinations only works because of her unflinching commitment to Kalimantan, both its setting along with also also the individuals who reside there. She says, “Ecotourism can be ultimately about place – environment along with also also people. Without a true passion because of This particular, don’t even bother.”