- Country: South Africa
- Industry: Tourism, Recreation
- Stage: Seed
- Investment size: $201,934 / min. $201,000
Rialosha’s aim is becoming one of the largest resort facilities in South Africa. The site is located on an aesthetically pleasing location on the bank of a river, surrounded by mountains creating beautiful scenery, perfectly suitable for the project’s quality. Seed: 0,204 million USD, Project Cost: 40,3 million USD.
Rialosha is aimed at providing the largest accommodation and entertainment facilities, located in South Africa, Limpopo Province, Venda (Vhembe District), Maangani-a-Nngwe village. The site also houses very attractive natural elements such as baobab trees, indigenous variety of trees, natural water springs and very diversified and rich vegetation.
Rialosha has secured 100 hectares of land and plans to offer a vast array of components of both indoor and outdoor nature to entertain people in a unique way. Elements portrayed will include an accommodation centre, entertainment centre, events centre, conference centre and a cultural village, all situated in one location. Rialosha intends to operate as a 4 to 5 star (international standards) establishment and a 5 star establishment as rated by the tourism grading council of South Africa (TGCSA). The summary of elements is as follows:
• Accommodation Centre: housing a boutique hotel and a lodge. The boutique hotel will offer customers luxurious modern-built 40 bedroom units fully equipped with oversized bathrooms, Internet and spacious work desks. The hotel will also feature a common pool, restaurant, beauty spa and a gym. The lodge will offer 20 roomed traditional themed cottages and 20 (2/3 bedroom) family chalets.
• Entertainment Centre: focusing on providing the families with wide-ranging quality entertainment activities. The entertainment centre will provide various activities within the water theme park, picnic theme park; indoor gaming facility, cinema, outdoor sports, restaurants and outdoor kids play area. The entertainment centre will also provide a unique nightlife experience for adults in the form of a jazz club that will conduct live concerts, and have dance floors and bars.
• Events Centre: with beautiful gardens, a chapel and a hall that can accommodate 600 people per event. Whether our clients need to host weddings, parties, matric dances, beauty contests, etc, we can be able to assist.
• Cultural Village: to serve as an interpretive site for visitors who will learn about the rich history and culture of the Vha-Venda people. Visitors would walk around the village and interact with various characters to explain their roles and any special processes or rituals. The attractions will incorporate plays, cultural festivals, art gallery, workshop, traditional restaurant, open market and a small agricultural site. This will also provide tangible economic opportunities for interested community members.
• Conference Centre: offering conference and meeting rooms to serve the convention market.
• Tour Packages: Limpopo’s tourism attractions are located at a distance from each other and in order to ensure that visitors get the best experience, Rialosha will provide various tour packages to the clients. Tours will include visits to places such as Kruger National Parks, Zimbabwean Bait Bridge; and other places of heritage and national significance.
The brand name, “Rialosha Country Lodge and Events Centre” (soon to be changed to Rialosha Resorts) stood out as a result of the services we plan to render. The logo symbolises respect which is derived from “U Losha”, a specific way that the Venda people greet each other. Our guests will be welcomed with respect, treated with dignity and experience a royal treatment without any specific regard on their status and financial background, in other words receiving excellent services. Rialosha’s logo concept was inspired by the colours, beadwork and the domba snake dance of the Vha-Venda people which symbolizes people coming together. It is an elegant brand that represents all that we stand for and will also play a significant role towards the landscapes, buildings and interior designs.
Company Ownership is controlled 100% by Ms Mpho M. and Ms Aluwani M. with equal share ownership. The leaders are capable, competent, self-motivated, independent, intelligent and ethical, who are working towards a greater purpose of improving lives and who are prepared to take risks and have already made huge sacrifices for the project. The leaders have no experience in the tourism industry however they intend in appointing a Facility Management Operator for overall operational management during the operational phase to run the business for a contractually agreed period and at the same time training personnel. Ms A. M. holds an M-Tech in Chemical Engineering and Ms M. M. holds a BSc in Mechanical Engineering.
The strategic-management of the company will be fulfilled by a board of directors with delegated professional and experienced management being appointed to run the everyday business with the aim of generating good revenues and the rate of return from investment.
Rialosha has established working relationships with skilled and competent professionals and already have certain professionals working at a risk. The team is outlined as follows:
Arint Consulting Services
Mr Francois M., from Arint Consulting Services was appointed as a Project Manager. He is responsible for overseeing development of the project from the planning phase, design, construction until project completion.
He also manages relations with engineers, architectural consultants, and other professionals.
Arint Consulting Engineers
Rialosha has appointed a civil engineer and an electrical engineer in the form of Arint Consulting Engineers to oversee all civil and electrical requirements from the planning until the implementation and close out phase.
Ingerop International Consultants
Rialosha has appointed architectural consultants in the form of Ingerop International Consultants to develop a Preliminary conceptual design and an in depth costing estimate from the construction to the interior designs. The company also provides advice from time to time.
Rialosha plans to appoint a facility operator to provide their operational expertise, assistance, guidance and services during the planning phase and also manage the business during the operational phase for a pre-agreed contractual period. Rialosha has already approached Rani Resorts and Signature Life Hospitality with both operators having shown interest on the project.
Project Advisory Services
From time to time Rialosha is supported by:
• Small Enterprise Development Agency (SEDA)
• Limpopo Economic, Development, Environment and Tourism (LEDET)
• Limpopo Trade and Industry Department (TIL)
• Vhembe District Municipality
• Van der Merwe Attorney’s
The general absence of tourism and entertainment infrastructure and services in this diverse and unique nature in the Northern areas of the Limpopo Province results in a few spin offs and benefits for the community, developers and investors. The site would form a foundation of an excellent business model for revenue generation and sustainability through the attractions of local people, tourists and convention markets.
Rialosha project is divided into three phases as follows:
1. Appraisal and definition (Phase 1) - Completed
The phase is aimed at obtaining and integrating relevant background information relating to the tourism industry (market, competition), conceptual designs and engineering reports in order to develop initial capital
project proposal document. The intent is to obtain initial capital funding.
2. Development Facilitation Act (1995) compliance (Phase 2) – in progress
Initial funding required to fulfil government legislations (DFA) and to obtain the Title of Deeds. In order to satisfy the DFA process, Rialosha requires initial capital to the value of R 1, 69 Million Rands (0, 204 Million
USD, using $1=R8.27).
3. Construction- Phase 3
Rialosha will have to outsource construction funds to an initial estimated value of 333 Million Rands (40, 28 Million USD, using $1=R8.27) required for construction. This estimated funds excludes Interior design, FF&E, OSE, IT, other assets and escalations. In addition operational and maintenance funds are not part of the cost and will also need to be outsourced at a later stage. Overall project cost is estimated to be over 500 Million Rands (60, 61 Million USD, using $1=R8.27).
Rialosha has carefully assessed the project’s needs and has deemed it necessary to seek for funding in a form of equity investment for Phase 2 and a combination of equity and loan for Phase 3. We have explored an option of seeking funding for Phase 2 alone and have approached various governmental organisations, private banks and other local companies with no success.
i. Start-up: Phase one was completed and the following deliverables were met:
- In depth Initial Capital Business Proposal covering project brief, company summary, concept origination, project location and demographics, project methodology (project phases), project team, products and services description, market research and preliminary development concept (including architectural drawings, construction costing spread sheets),
- Site visit Report, dated 27 February 2010
- Civil and Electrical Engineering Report: Project Overview and Desktop Study of Assess Road Position, dated August 2011,this report also include preliminary flood line determination and contour survey, etc.
ii. Some Works Done: Research
It should be realised that the success of this project will bring about significant benefits not only to Rialosha but also to the Maangani Community. The current living conditions of the people within this village need to be improved and a project of this nature will bring about major community development as well as putting them in the map. Rialosha is planning to use the cultural village to give back to the community. Rialosha will merely manage the facility with the aim of maintaining the standard. The cultural village will include a kitchen, traditional restaurant, art gallery, art carving building, miniature stadium (for cultural festivals), market with stations were arts can be sold, and etc. Rialosha also plans to erect structures such as a community hall, refurbishment of the royal house with the aim of restoring dignity to the village. In addition to community development, benefits such as job creation, skills development (in different job trade), tourism attraction and provincial development shall be realised in Maangani and Limpopo as a whole.
Rialosha is willing to share the detailed information pertaining to the business with the relevant parties should such an opportunity be awarded.
Acceptance of this proposal will be highly appreciated.
South Africa recorded its highest number of foreign arrivals in 2009 and has grown by 3.6% over 2008 to 9,933,966 million arrivals. The vast majority of this group traveled from Africa by land with 7,490,425 followed by Europe with 1,348,502 recorded in hence indicating that Africa and Europe are South Africa’s main tourist markets. Arrivals to South Africa were boosted by the sports events that South Africa hosted in 2009 (8), namely the FIFA Confederations Cup, the British and Irish Lions tour and the Indian Premier League.
This resulted in South Africa’s global tourism destination ranking moving from 29th position in 2008 to 26th position in 2009. Revenue generated by foreign arrivals increased by 7.0% (R5, 2 billion) compared to 2008. The key drivers of the increase in revenue were the increases in foreign arrivals and average spend per day of all tourists.
South Africa further recorded a remarkable 15% increase in tourist arrivals in 2010 hence outperforming the global average by 8%. The Fifa World Cup in June and July played a role in the increase with tourist trends buoyant all year round. According to the department of tourism minister, Marthinus Van Schalkwyk, 90% of the tourists who came to South Africa for world cup has indicated that they would want to visit again as the tournament has created a better image for South Africa. Van Schalkwyk further said that the legacy of the World Cup was a major boost for the tourism industry and has cemented a foundation for sustained investment and growth.
Domestic tourism in South Africa contributes significantly to the tourism sector in the country. It is important and will become more so in the future (1). Approximately 43.7% of South Africans undertake travel each year and on average taking 2.8 trips per year in 2007. Domestic trips contribute approximately 80% to total tourism in South Africa as compared to 20% by foreign arrivals. According to the South African Tourism statistics, it is estimated that 82% of the total tourism volumes are domestic tourists. The market represents an opportunity for growth, given that holiday travel accounted for 18% of the total value, captured by the domestic tourism market.
Limpopo currently receives approximately 1,152 million (11.6 %) of South Africa’s International tourists and accounts for 5.3% of foreign visitor’s bed nights in the country. The number of bed nights recorded in South Africa was 66,5 million in 2007; 75,3 in 2008 and 71,2 million in 2009. The number of bed nights in Limpopo has increased as compared to 2008. During 2008 domestic tourism accommodation expenditure amounted to approximately 49,7 million in Limpopo. This number dramatically increased in 2009 showing 131,8 million spent on accommodation. Limpopo Province has a total of over 678 accommodation establishments with the Waterberg District accounting for 38%, Mopani District 25%, Vhembe District with 21%, Capricorn District with 11% and lastly Greater Sekhukhune District with 5%. The establishments range from lodges, hotels, resorts, guesthouses/B&B’s and other which includes camps, safaris, backpackers and apartments.
Use of financing
Feasibility Studies: 497 000 (SA Rands)
•To uncover the strengths and weakness of the project, opportunities and threats as presented by the environment, resources requirements and success prospects.
•To understand the market and potential of the market in order to know the proper size of the project as well as to prepare data for the business plan.
•Economic, operations and management, schedule, market and marketing, cultural and financial feasibilities will be conducted.
Enviromental Impact Assesment (EIA): 335 000 (SA Rands)
•Undertake an Environmental Feasibility in support of the engineering and economic feasibility. Process to be followed is Environmental Feasibility and Risk Identification Study. EIA identifies and flags environmental risks and potential issues that are critical to the location of the proposed development area e.g. site consist of protected trees which should be handled accordingly.
Town Planning: 853 000 (SA Rands)
•Gathering and assessment of all relevant information
•Provide advice and assist with recommended procedures
•Compile applications and manages the procedures on behalf of Rialosha
•Land Survey and description of property
•Undertake an Engineering Feasibility which includes costing, structures, preliminary designs, reports
Facility Operators (Working at Risk):
•Feasibility Assistance, Financial (Financial package structuring, Alternative, hotel appraisal co-ordination)
•Planning and design (design rooms, food and beverage area and/or meeting facilities), coordinate architect, engineer, land planner, and interior designer,
•Interior Design Assistance (Interview and select the design firm , manage projects budget and e.t.c)
Construction Cost: (Pre-limminary)
Estimated Construction Cost R 287 336 470.77
Contingency (10%) -
Proffessional Fees R 45 283 483.56
TOTAL ESTIMATED CONSTRUCTION COST R 332 619 954.33
IT Costs R 4 616 214.49
FF& E Cost R 4 438 450.1
OSE Costs R 13 007 513.40
Assets R 1 798 872.00
TOTAL ASSOCIATED DEVELOPMENT COST R 356 481 004.34
TOTAL PRELIMINARY PROJECT COST R 356 481 004.34
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