INCAE Business School Costa Rica
This case tells the story of Posada Amazonas (Amazon Inn), a tourist lodge in the Peruvian jungle, which resulted from a collaboration agreement between the native community Ese´eja de Infierno and the tourism firm, Rainforest Expeditions (RFE).
The partnership agreement was signed in 1997, for a period of 20 years. It provided for the native community to work in tourism exclusively with RFE, and protected the area’s tourist resources (a lake with giant otters, a feeding area for parrots, and eagles’ nests). It also allocated 4,900 acres to the building of the Posada Amazonas lodge and its tourist amenities.
In turn, RFE had to procure the necessary financing to build the lodge, and was expected to manage the venture. RFE had to train the community in lodge operations. Once the contract expired, the community had the option to continue the partnership or assume management of the lodge on its own. The agreement awarded RFE a 50% voting share, while profits were split 60% for the community and 40% for RFE; during the life of the joint venture. Posada Amazonas targeted mainly North American and European tourists. As compared to its competitors, it was renowned for its superior quality service to tourists. It had received several national and international awards, and had been the topic of various articles in prestigious tourism and ecotourism magazines.
Despite the lodge’s success, RFE’s management faced some trouble with the community staff. Turnover was compulsory every two years, and the community was not large enough to provide new qualified personnel that often. The community itself had some old internal problems of its own that had a negative impact on the business relationship with RFE, too. Lodge operations were also compromised by frequent irregularities in airlines that brought tourists into Puerto Maldonado, and by the lack of good local suppliers.