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Grassroutes: A New Model for Rural Tourism

[Editor’s Note: Last week I had an engaging phone conversation with Inir Pinheiro, co-founder of Grassroutes, an innovative rural tourism social enterprise which aims to unveil the hidden India by connecting urban India to rural communities. This post draws extensively from our phone conversation, follow-up email exchanges, and related research.]

Try Googling “India village tourism” or “India rural tourism” and you’ll be underwhelmed with the results. The only interesting result relates to the Department of Tourism’s implementation of the Tenth Five Year Plan (2003-2007) in cooperation with UNDP (United Nations Development Programme). Dubbed as the Endogenous Tourism Project, its main objective is to develop the culture, crafts and sustainable dimensions of rural life as viable livelihood opportunities for the low-income rural communities. The initial pilot, comprising 30-odd villages spread across 17 states, was launched in 2007. Considering that India has approximately 7 million villages, it’s safe to assume that the rural tourism market is far from saturated. This brings us to Grassroutes, started in 2006 under the aegis of Watershed Development Trust, and later incorporated as an independent company in 2009.

Backstory

Grassroutes’ mission is to provide the rural communities an interaction with the modern world, even as they hold on to their customs, traditions, and indigenous handicrafts. If this doesn’t sound like a tourism firm’s mission statement, it’s because Grassroutes is not your garden-variety tourism company.

Inir Pinheiro’s journey from a city-boy (grew up in Mumbai) to Grassroutes is an interesting one. During his formative days, his activist inclinations took him to Greenpeace but he didn’t last there too long, disappointed as he was by its ‘complaint-based’ methodology. He then joined the MBA program at XIM, Bhubaneshwar where he nurtured his interest in rural development and sustainable livelihoods but elected to skip placement and instead started Grassroutes. Grassroutes was a culmination of several interactions with NGOs and introspection on three key problems facing rural India: a) Lack of employment opportunities, b) Over-exploitation of resources, and c) Migration from villages to cities.

Grassroutes’ vision is centered around its unique flavor of community-based tourism because of two key reasons. Firstly, it has been  established that tourism is the greatest multiplier of development. In the Indian context, tourism increases the livelihood income and ancillary income by multiples of 2.1 and 1.8 respectively. Secondly, the community ensures the focus remains on promoting and celebrating its own traditions, languages, costumes, food, arts and craft.

Developing the village

Since Grassroutes’ target tourist demographic resides in a city, so the initial villages selected were within a 3-4 hour driving distance from major cities. The co-founders being from Mumbai, started by focusing on villages in Maharashtra. Purushwadi, their first village, was developed in close partnership with a local NGO and the early adopter villagers. As Inir explained, there are two important things tourists expect in a destination: a clean place to sleep and a clean place for ablutions. The room and board options at Purushwadi evolved gradually – from minimal tents in the beginning to home stays with villagers eventually. Since modern toilets are non-existent in the villages, Grassroutes builds such facilities which, incidentally, turn out to be the largest capital expenditure in developing a Grassroutes village. The overall cost of developing a village ranges from 5-10 lakhs.

The Village Tourism Committee is the common link between Grassroutes and the tourists. This committee is ultimately responsible for providing hospitality to the tourists right from checking-in to checking-out – terms which I use loosely since the ‘reception desk’ is simply an agreed upon rendezvous point just outside the village. Grassroutes works closely with the tourism committee and the local NGO to conduct regular training programs for the villagers to function as guides, service providers, cooks, etc. and also to learn communications skills and quality processes. The local NGO monitors the tourists’ village experience in the village and the interactions between the tourists and the villagers.

How it works for the tourists

Currently there’s no online booking process so tourists contact Grassroutes by e-mail or phone. A custom package, based on the activities of interest and duration (2-3 days usually), is tailored for individual groups. Behind the scenes, Grassroutes contacts the village committee to inform them about the number of people visiting and activities to focus on – nature-based, cultural, or adventure activities. For the complete list of activities, you can refer to Grassroutes’ What we do page or, better still, the photostream at the end of this section shows some of the more fun activities.

Grassroutes is the single point of contact for financial transactions. Tourists pay them and the village committee is paid by Grassroutes within 15 days of the tourist visit along with feedback from the visit. The local NGO also gets a service fee for each tourist visit. While the revenue-share percentages are a work-in-progress, so far the village committee and Grassroutes take an equal share and a smaller percentage goes to the NGO.


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Funding, Traction & Scaling

Majority of Grassroutes’ funding comes through organizations such as Watershed Organization Trust, UnLtd India, a few European agencies, and most recently an award from Villgro.

The host family count at Purushwadi (their first village) has steadily grown – from 4-5 families in 2007 to its current peak of 70 households. They expect to end 2011 with an overall bed night count of 1500 across all their villages. The analogy with the traditional hotel occupancy percentage metric can only go so far. As Inir explained to me, they don’t want to go overboard with bed nights since they want to calibrate and respect the optimal sustainable footfalls per year per village. This means limiting the maximum concurrent number of tourists to 40 and total tourists in a calendar year to 1500. Last year, 30% of expenses were met by their tourism revenue that has been increasing steadily. This year, tourism revenue funds 70% of the expenses with the remaining coming from grants.

Scaling Grassroutes’ operation means adding more villages. Inir and team have an ambitious goal of reaching 200 villages by 2020. They are currently at two with plans to end 2011 with three new villages – a forest-setting village, a lake-setting village, and a beach-setting village. After selecting the right village, making it a Grassroutes village takes time – from engaging with the village elders to partnering with an NGO to getting everyone on board to building the necessary infrastructure. The minimal infrastructure, for the most part, is construction of toilets – also their greatest scaling challenge.

To address their scaling challenge, Inir and team are reaching out to HNI’s (High Net worth Individuals) as village sponsors. In their initial business model, Grassroutes would borrow from a village sponsor HNI and the loan payments would come from a revenue share of the tourism revenue. This model had the disadvantage of pushing out Grassroutes’ break-even timelines so they’ve changed the role of village sponsor HNIs from loan-giver to grant-giver – which brings their break-even timeframe to 2013. What’s in it for the HNI grant-giver? “Social impact of course”, replies Inir. Till date, Grassroutes’ intervention in two villages has resulted in an average increase of approximately 1,800 INR in the annual income of each of 90 households. This represents a 10-20% increase in income for these households. According to Grassroutes’ measures, the two villages have already seen a 10% reduction in migration to cities. If you are an HNI with an interest in developing a village in your home state, you can contact the Grassroutes team at info@grassroutes.co.in.

Founding Team

Inir Pinheiro focuses on fundraising, business development & media outreach.

Vijay Khanna heads marketing and sales and currently dons the CEO hat.

John Nogueira heads training and operations.

Darren Lobo heads communication, social media outreach and strategic accounts.


Competition

During our call, we didn’t get around to discussing competition but, as my web searches indicated, barring the Department of Tourism’s pilot program (Exploreruralindia.org), which currently spans 30 villages, there’s a paucity of private initiatives in rural tourism. I found just one other social enterprise – RTNE (Rural Tourism Network Enterprise). From a perfunctory look, the key differentiator between RTNE and Grassroutes is that RTNE relies on existing infrastructure (mostly coastal cottages and homestays) and has created a franchise model on the destination side for tourist management. They are not really competitors to Grassroutes (yet) since their focus is largely on urban coastal areas.

Subsequent email exchanges with Inir have revealed that there are a handful of other private rural tourism initiatives that are on Inir’s radar: Blue yonder, Travel Another India, Culture Aangan, Ecospiti, Baramati Agri Tourism, Village Ways, Eco Login. Eventually I will research and report on them as well when next covering the Rural Tourism category.