Greenview Cultural Tourism: Rural Project Success Depends on Operations, 'EPC+O' Model Is More Suitable

Greenview's Note: Since the implementation of the rural revitalization strategy, the rural EPC model has been gradually promoted, integrating design and construction to rapidly advance rural development. Currently, most rural EPC projects focus on improving the living environment, but they generally fail to meet the needs of investment attraction and operation after completion, leading to project deviations, huge investments without returns, and failure to achieve expected results. It can be said that the moment construction ends is the brightest moment for the village.

Greenview Group emphasizes the rural EPCO model, which prioritizes operations upfront and uses an operational mindset throughout the entire rural construction project. This not only avoids the disconnection between investment construction and operational investment attraction but also achieves a closed loop of investment, financing, construction, management, and operation. That is, the biggest difference between EPCO and EPC is that when construction ends, it is the moment the village comes to life and the beginning of income growth for the people.

1. Current Pain Points of Rural EPC

The EPC model has obvious advantages for rural projects, but why do many projects fail to achieve expected results after completion?

1.1 Lack of Sustainable Revenue Products

The EPC model integrates design, procurement, and construction, facilitating deep collaboration among service entities and helping with cost, schedule, and quality control. Its advantages are clear for rural projects.

However, due to the complexity and comprehensiveness of rural infrastructure, industrial development, and villagers' lives, many issues inevitably arise during EPC implementation. Looking at most rural projects, because village homesteads and collective construction land are non-tradable, rural EPC investment and returns often rely on administrative forces for payback. Genuine sustainable revenue products are generally lacking, and few projects rely on cash flow for returns. Projects with an 8% or higher yield are extremely rare. The disconnect between investment and returns prevents the EPC model's advantages from being effectively realized in rural construction.

Greenview Cultural Tourism believes that the primary goal of rural development is profitable industries and income for the people, enabling sustainable village development. Therefore, developing sustainable revenue products is a direct means to achieve rural sustainability.

1.2 Lack of Market-Driven Operational Capability

2022 was another year of booming village planning under territorial spatial planning. For years, planning and design have been jokingly referred to as 'hanging on the wall.' Many design institutes, when creating EPC project designs, do not consider operational aspects such as visitor flow, cash flow, and investment pace, resulting in a disconnect between top-level planning and operations.

At the same time, the rapid development of rural construction EPC projects and the emergence of new forms have led to a shortage of operational talent after project completion. Many companies still hold a mechanical mindset that 'designers know design, builders know construction, and doing EPC just means putting both teams together,' lacking truly professional talent. Using traditional contractor models for operations, with insufficient market-driven operational capability, EPC projects inevitably face problems.

Greenview Cultural Tourism believes that the focus of rural projects is not only on completion and implementation but also on operational implementation. Therefore, from the early planning and design stages, people who understand operations need to lead or guide. During the procurement and construction phase, an operational team should be stationed to act as a 'supervisor' for the project, further controlling the investor's risk. Rural projects are more suitable for the 'EPC+O' model, and having a solid operational team is key to ensuring full operational participation throughout the process.

2. Key Points for Rural Operations

Operations determine success. What should be the focus of rural operations under the EPC model? How can it be achieved?

In a broad sense, rural operations can be defined as the activities of rural operators using market-driven methods to integrate, allocate, and manage internal and external resources of the village. In a narrow sense, rural operations can be understood as the activities of operators in attracting investment and managing rural construction projects.

How to achieve sustainable development of village industries, how to design, develop, and operate profitable products, and how to maintain rural infrastructure and public services on a daily basis—these are the key points for rural project operations under the EPCO model.

2.1 Consumption-Driven Industrial Integration: The Core of Rural Operations

Investment, construction, operations, and management returns should be considered comprehensively and planned as a whole. Under the overall planning framework, spatial layout and functional settings should be designed. Rural projects should leverage urban-rural integration, use pan-tourism activities as a catalyst, and drive the agglomeration of pan-tourism industries such as culture, sports, elderly care, health, and education, forming a consumption-driven model integrating primary, secondary, and tertiary industries.

2.2 Market-Oriented Commercial Conversion of Rural Resources: A Key Point

Every village has different culture and resources. How to creatively package and design rural resources into consumable products is a key point. For example, through 'cultural and creative empowerment + composite business formats + diverse product categories + themed spatial scenes' in the village, agricultural products and traditional handicrafts can be transformed into creative agricultural or cultural products; rural buildings can be themed; rural commerce can be scenarized; creating diversified experience spaces, branded agricultural products, creative cultural agricultural products, rural experience projects, and rural tourism projects.

2.3 Updating Rural Infrastructure and Industrial Development: The Foundation

Rural infrastructure and public service investment face huge costs. How to make infrastructure and public services serve future rural industries and integrate with social capital going to the countryside? How can traditional rural living environment improvement make the village attractive to talent? Therefore, maintaining rural infrastructure and daily public services is a positive link between social capital and rural operations, helping ensure orderly, safe, and sustainable rural operations, and it is the foundation of rural operations.

Rural operations are a long-term process. Good rural infrastructure support makes it possible for social capital to invest in industries. Additionally, using abundant rural green open spaces, through continuous renewal and development of rural infrastructure and public facilities, cities and villages can provide diverse sports tourism products and outdoor leisure products, rural parent-child leisure products, and in suitable rural communities undergoing urbanization, develop night-time economies such as snack streets, cinemas, VR experience centers, and cultural performances to meet the night-time needs of tourists and daily leisure needs of local rural residents. These are future directions for updating rural tourism industries based on new development ideas.

2.4 Cultivating Rural Operational Talent: A Key Element for Sustainable Development

Building village-level talent teams is important for supporting rural industrial revitalization, ecological revitalization, and cultural revitalization. For EPC model rural projects, the key is cultivating rural operational talent, which is essential for sustainable rural development.

In the specific practice of rural revitalization projects, Greenview Cultural Tourism focuses on introducing market-driven operational management mechanisms, fully leveraging the market's role in optimizing rural resources, capital, and visitors. It adopts a mutually beneficial cooperation model between villages and enterprises, fully utilizes the role of think tanks, and leverages its years of experience and resource advantages in rural revitalization. Internally, it recruits professional operational talent; externally, it cooperates with local governments and village collectives, using rural entrepreneurship spaces as a platform, stationing staff to cultivate local operational talent, exploring new models for rural talent development, promoting multi-party co-construction and sharing, effectively enhancing the comprehensive benefits of rural tourism economy.

Greenview Cultural Tourism believes that 'rural operations ultimately come down to building a good platform, using a platform mindset to import various external good resources into the village.' The goal of rural revitalization and development is to make villages beautiful and villagers rich. The core issues in achieving this are that villages need to have products with sustainable capacity, professional team operations, and market-driven operational talent. Therefore, by introducing rural planning and operational teams, inviting professional talent with business acumen, mining village resources, stimulating endogenous motivation, supporting online marketing, and cultivating rural talent, we can activate high-quality resources, revive rural industries, and enliven operational marketing.

3. Key Points in Cooperation

When choosing an 'O+EPC' model operator, what should enterprises focus on?

Under the service concept of 'Creative Classics, Operational Implementation,' Greenview Cultural Tourism believes that the 'O+EPC' model, where operational thinking leads EPC, is the future trend. It not only avoids ineffective investment in construction but also seamlessly connects with actual operational requirements. That is, with operations at the core, define the operational end based on project positioning and market demand, and conduct project planning, design, and engineering construction all around the operational end, ensuring that the completed project fully meets operational needs, achieving an effective integration of planning, design, construction, and long-term operations.

Therefore, resources in investment, financing, planning, construction, and operations need seamless connection and true integration to maximize team efficiency and project returns. Under certain market demand pressure, tourism planning and design institutes of a certain scale must transform towards the entire industry chain and comprehensive services, becoming a comprehensive service organization. This is also Greenview Cultural Tourism's research and practice area and long-term development direction.

3.1 Adopt the Operation-First EPCO Model

After years of practice in cultural tourism scenic area creation and rural revitalization, Greenview Cultural Tourism has creatively applied the scenic area development model to rural construction, exploring a whole-village development and operation path with Greenview characteristics, forming the operation-first EPCO model, effectively solving the mismatch between 'investment, financing, construction' and 'management, operation' in rural EPC projects.

Greenview Cultural Tourism's whole-village development and operation flow

3.2 Entrust Design Units with 'Ground-Level' Operational Experience

Currently, EPC projects are mostly handled by large construction companies that temporarily partner with a planning and design unit meeting bidding qualifications to form a consortium. Most rural projects are technically simple, and the lowest-level qualification suffices in national qualification management. This leads to a situation where, during implementation, design and construction each complete their own tasks well, but in later operations, due to factors like operational capability and investment attraction, the project deviates, incurs heavy losses, fails to achieve economic or social benefits, and does not meet the government's expected investment results. Whether it is a beautiful village project, an agricultural complex project, or a cultural ancient town project, the top-level design is the most critical, forming the basic guarantee for project success and the core of the entire EPC project. This requires close cooperation between a planning and design unit with rich operational experience and engineering consulting capabilities and the owner throughout the entire process. Therefore, in bidding for rural construction EPC projects, design units with rich 'ground-level' operational experience must be entrusted as the lead.

EPCO Operator - Greenview Cultural Tourism's Role

3.3 EPCO Model Is Especially Suitable for the Following Rural Construction Projects

(1) Projects where construction scope and scale are not yet fully defined. For such projects, accurate project cost cannot be determined at the time of bidding, and many changes occur during construction based on actual conditions, such as rural infrastructure upgrade projects.

(2) Projects where construction standards and business format needs are not yet clear, such as common rural facade renovation and business investment attraction projects.

(3) Projects with incomplete preliminary data and insufficient construction conditions, such as some beautiful village demonstration projects.

Source: Greenview Agricultural Tourism Integration and Village Planning

Cover image source: Shetu.com