If you have been sitting back thinking about this I would suggest you take some action soon as our activity in sales has considerably escalated after we started construction and this is quite remarkable considering it is low season now. Units are booking up with phase 1 half sold with no C units left at all and phase 1 bookings already started for those that want a construction date next year. After the major overhaul of the website we are now getting over 1100 unique visitors a month as well our listing at Viviun got 1149 visitors in September. We of course have maintained our advertising with the Real Estate Guide that will print 25,000 copies of their annual guide this month and the For Sale by Owner magazine that prints 30,000 copies a month. Hence the profile and attention to our offering is indeed increasing rapidly so if you want a better selection and to guarantee your price now is the time to act. As part of that and our overall marketing plan on January 1st there will be a further price increase on Phase 1 units as well. As a reminder to book a unit requires a 10% deposit to be held in escrow with Alliance Law Group until the date of commencement of construction. Up until that date one can withdraw their deposit without penalty of any kind as per our attached sales agreement.

Further to my last newsletter we are of course in full swing on construction now and as I informed you previously I am not doing the construction up-dates in a newsletter format but as a blog on the website in the discussions forum as a construction diary as part of Construction for Dummies. I am posting this every weekend now so you can come visit at your leisure to see what is going on and how we are doing things this of course utilizes many pictures so that you can see the how and why we are doing things.


THE ONE GOD IN OUR PROJECT – OCCUPANCY!

A commonly asked question from the astute investor as well as critics of our project is with regards to us being able to meet our financial projections. Well the sole issue at the heart of this question is what is a reasonable expectation for occupancy of our units? Now to clarify I have used 65% to generate the results that all see in the financial summary. How did I come up with this? Well when I went to ICT (Tourism Institute) and asked them about average occupancy rates they reported the average to be 64% so hence I rounded to the 65% figure to make the base for our calculations. One investor asked what the break even point was on a unit under a mortgage purchase plan as his base concern was that once he put his deposit down he did not want to have to fund anything else or have a money pit as it were. As is shown on the summary an owner's break- even point is 43% to 48% occupancy which I humbly submit is not exactly what I would call aggressive considering the average is 64%. The whole focus of our project from the day it was only a germ of an idea was to create a project that was a symbiotic relationship between a beautiful environment that our owners and guests alike would enjoy immensely and as a result of that it would then that it would be very financially productive. I believe the environment we create has EVERYTHING to do with the financial success for all concerned the owners, the management, the employees and the community at large. So let’s now delve deep into what makes up this most complex formula of not just good occupancy but great occupancy. I will not rest or be happy if after all this hard work and intense planning and design that we succeed to the top of Mount Mediocrity. If we were only get to average occupancy means simply that we are mediocre no better nor worse than anyone else in the tourism industry. So although I make no financial projections for higher than average occupancies that is exactly what I expect and demand will happen starting the second year of full operation. Of course the result of that is that all those that participate in any capacity of the above list all will do better than projected in the long run as we reach our goals and exceed being average. Now for the list of what will separate us from the crowd and hence why our owners’ profits will not be average.

Environment & Lifestyle:

This is of course a key element that is quite difficult to fully encompass. The first issue is for us to always live up to our name “Gardens of the Perfect Dream” is an ambitious undertaking that we will fully realize. The name is everything in what we do, how we think and certainly how we design. Everything must serve this imagery or vision and we will not sway from fulfilling this or compromising it. We believe that our low-density design of 61% green area along with a dense large plant and tree garden creates this ideal environment of being totally immersed in nature. Yes we are engineering this perfect garden with the use of special criteria of plant selection to attract all the indigenous species of butterflies and birds that Costa Rica is so famous for in its vast biodiversity. This garden also provides privacy by a natural separation of neighbors so that no one will ever feel like they are surrounded by people like so many tourism designs that end up lending more the feel of an ant hill rather than a place of quiet retreat and tranquility. This garden also aids in deadening the noise factor from others as well as this privacy factor. Another important by-product of our design is temperature; gardens make the beach environment much cooler than the all too typical concrete and asphalt environments that surround us in Jaco where density is typically going right off the map. The overall experience is what I describe as a walk right into the centerfold of a Better Homes and Gardens magazine. Our guests will seek out this type of environment for its natural beauty and tranquility that simply is not a common thread amongst the typical market offering. As yet we have seen no true competition to our concept and we will be that Unique Place for Unique people. We absolutely believe that many people coming to Costa Rica in search of a “No Artificial Ingredients” kind of experience will be most pleased and surprised at what we have to offer. The name is EVERYTHING!!!!


World Class Communications:

I believe the whole hotel industry lives in a delusion that fast, effective and cheap communications are not all that important to the traveler. I say that because I have as yet to see a hotel that does what we have designed so lets take a look forward to what our guests will experience. The moment a guest checks in they get their first surprise as the clerk hands them their cell phone that goes with their room and receives the instruction “Anything you need just press 1”. This will get the client to the front desk to provide them with directions to where they are going, a translation when needed, where to find something or someone or to assist when an emergency arises. Lets keep in mind most of our guests are in a foreign environment so how much does this aid in their comfort level to know they have assistance to deal with a different geography, a different language and culture. Will this increase their comfort, safety and feeling of security and hence the enjoyment of their stay with us?

The next noteworthy change is the arrival of the guest to their unit to find a computer there for their use at no charge or if they are a serious user they will just plug in or go out on the balcony or by the pool or the lookout tower or a park bench to carry on what ever pleasure or business they choose to carry out via the internet. Going to a business center to get charged ridiculous rates or a map to the nearest internet café are indeed answers by the conventional tourism industry and I say categorically these are all really bad answers. Today’s traveler wants more and will remember those who deliver more in convenience and comfort features and these will become the norm in a few short years but we will be on the forefront of the design built into the facility to handle this new world of communications always with the eye towards value and convenience. Those that will not demand this kind of services are becoming a dieing breed. I remind all that many today are not retiring the way mom and dad did they often phase out of work and often want to travel but have a clear need to stay in touch with the office back home, write reports, do contract work, telecommute, do on line trading or simply to stay in touch with family and friends while they enjoy life in Costa Rica. We also will have an intranet system within the project where a guest can sit in their living room and order on line any service they choose, provisioning for their fridge, tours, car and equipment rentals, room service etc. without ever needing to trek off to the office or wait in line for such requests. The focus is on convenience and not wasting time doing mundane things. For this growing group our type of communication system is not an option but a major criteria in their decision on where to stay, that we will gladly fill.

Sustainable Eco-Tourism:

There is a note worthy group of international travelers that consider sustainability to be a concern and hence they patronize the facilities that follow this doctrine. We believe in this approach and are only too happy to meat the criteria and attract other like-minded travelers. Hence that is why we are building to meet the Level 5 CST standard (Certificate of Sustainable Tourism). The first thing we do to quality is hidden in our gardens as the waste water treatment plant in the form of a Bio filter that uses plants to clean up the human waste factor in a most natural un-mechanized method. This is the first of its nature to ever be built in Costa Rica. It is also why not only for cost saving but for Eco-friendliness that we have taken particular pains in designing our equipment and systems to consume the least amount of power as is possible, this maintains or commitment to environment as well as helps our financial performance especially since our power bill is our second largest expense behind salaries.

Since air conditioning is a necessity at the beach and by far our largest consumption of power we have taken a unique approach on how to manage this system. Our chiller only runs at night from 8pm to 6am hence during the hours of cheapest and most available power it runs full blast chilling a 68,000 gallon underground tank of water. This also lengthens the life of our compressors as they run cooler when not run in the heat of day. During the day this cold water is circulated throughout the units to provide cool air. The fan coils that provide this cooling are engineered specifically for us to the actual environment of Jaco so that we manage not only the temperature in our condos but equally import is management of humidity. You cannot accomplish this with off the shelf equipment of a one size fits all nature. Also to help our system run much more efficiently is our wall system that incorporates Styrofoam so that we can keep the heat out especially in conjunction with the tile roof that is insulated with reflective foil Prodex insulation to stop that daytime heat from coming in while reflecting the cool back into the unit. All these designs help lead to the comfort of our guests and owners.

Our unique hot water system is also a by-product of this same air conditioning system whereby we will operate a heat exchanger off of the condensers to heat our water. In essence what we do is take the heat out of your living room and put it in your shower. This does not happen by chance but by careful engineering with an eye to costs and optimum comfort levels. The whole area of sustainable tourism is quite diverse and is rated through a system of checks that number 15 pages of concern in which we must satisfy 95% to qualify for a level 5 standing. Although this is quite diverse it is not an especially difficult task for us to qualify as the requirements meet our view of how we should develop within our corporate philosophy in the first place. The bonus comes in that there is a segment of travelers out there that want to support our type of philosophy so it is just a matter of bringing these standards to light to gain the business of this group meanwhile in conjunction with our lower operating costs to make an ideal win/win formula.

Security and Safety:

Well the cell phone at our guests' side will indeed add to a sense of security and a clear example of our concern. Each room will have a chip key that looks like a key fob that opens the door as soon as you walk near it. This lock also records who and when someone enters each room or will establish what hours a maid or service person can enter a room. This all goes to deter the possibility of any employee thefts or security breaches. A group can also have keys open several units if the group chooses shared access. We will have 24 hour security backed up by electronic surveillance of both our front and back property lines so that we have subtle control but nothing ugly or obtrusive as chain link or razor wire examples that we see around Jaco. The beautiful environment must carry through to all facets. The fire protection of the entire project by a sprinkler system of course puts us on a playing field of all our own as simply no one has taken this concern to the owners and addressed this most lacking area with a clear, simple and ultimate solution to security of person and property. By ensuring a fire is extinguished long before it becomes a problem we know what could have been a big problem that could shut down units for some time for repairs causing lost income not to mention loss of life is completely avoided. This leads to peace of mind for all affected.

Hospitality Services:

To attract a steady flow of tourists to keep your occupancy where we want it you have to offer more services than much of the competition. We will provide airport shuttle service, on site tours to all local attractions, golfing, fishing, car rentals, equipment rentals, as well as free bicycles, boogie boards and ocean kayaks. Service, service, service is the name of the game that separates those with exceptional occupancy from those without. Another critical part of this formula is the employees. We will promote exceptional service and attitude from our employees by implementing a profit share plan with them that is based on occupancy. It is our belief that this is one of the most significant parts of how a guests experience is rated is by how they are treated. When all employees know that their next check is affected by returning guests and high recommendations received from past ones it creates a notably different mental attitude of all those that will work at Jardines de Ensuenos. Our goal is to pay more out in wages than anyone else hence you get the best for the best. No matter how high tech our world is the power of word of mouth will NEVER be replaced.


Marketing:

This is a critical component in defining how occupancy grows in any tourism initiative. The simple fact is small operations cannot possibly compete on this basis. With 160 units we will do serious internet marketing on our own with a minimal cost to each unit. We will of course have relations with the standard Travel Industry as would any hotel but we see the growth and power in internet marketing as this has taken over the travel business with no sign of it slowing to say the least. We can afford to use conventional marketing like billboards and signs leading from San Jose as well that few others make use of. Unlike a conventional hotel each of our owners has a vested interest in being another source of free word of mouth advertising amongst their circle of family and friends. This method alone I estimate will sell over 500 weeks a year. We have considered several travel group affiliations however many of these carry expenses that appear to out weight the benefits in comparison to extensive internet marketing campaigns when comparing the benefit/expense ratios. One thing for certain is that unless an owner is going to do a lot of work on their own (which very few do) to promote their unit a small condo project (less than 50) is a disaster in the area of marketing as they simply do not meet the scales of economy to really manager your property for you hence occupancy will suffer.


Quality of Construction:

I believe this is an often forgot component to this long formula but it does need to be addressed and considered in looking at the whole picture. Now we have never suggested that we are building luxury like there is not going to be any gold taps or $400 toilets nor do I think these things have much to do in the final analysis of what the guest thinks of our operation or how they enjoy their stay. However when you build a place with the idea of managing it in your family for many years to come you do indeed build with a very different mind set than the average developer, unless you are an idiot. Who wants maintenance nightmares so we build with an eye to what is quality and what lasts the tests of time and what has desirable life cycle costs as our friend and engineer Frank would say, not junk like some of our competition.
A simple example is our porcelain floors that are more expensive than normal ceramic but there is a reason for this. When (not if) a guest drops something on porcelain no one will be any the wiser but with ceramic you will know it and after ten years this floor is going to look tired which affects your occupancy, the place has to look good to keep good guests. That is also why there is hardwood doors and windows, granite counters and high quality Brazilian locks these are all known areas of heavy wear and tear so hence we DO NOT skimp on these areas as in the long run it will cost way more than doing it right the first time.

Those that have been following along for some time know very well that this is a major focus on what we do here, what we build has to be quality but at a reasonable price. Quality will not only win over our guests but will keep them coming back for years to come and that folks is where the money is for you, us and the employees. Our philosophy is simple if we have to build junk to make a buck we would just as soon not bother doing it at all. This project is a labour of love for both Michael and myself we simply won’t build something we would not live in ourselves!!! Now that includes the quality of the construction as well as the environment that the construction exists in it is a symbiotic relationship that makes everything work. Yes our gardens cost a great deal to build not to mention the very expensive land they occupy but we believe that this environment is not only a joy to behold but a key to our cash cow in the end that elevate s our investment to the area of enviable not just mediocre but to do that you also cannot be mediocre. I hope this long explanation as to how we think, how we designed this overall concept help you understand why we are very confident that our projections are not only quite realistic but easily achievable in this
market.

Regards,

Trevor