Chaolong village surrounded by limestone formations.

The retreat is tucked in a rural tract of land that undulates with cave-pocked karsts scattered among patchworks of shimmering rice paddies. It's a magnificent landscape inhabited by friendly farmers, skittering chickens and plodding water buffaloes.

Bloembergen discovered Chaolong while working as a guide for a Dutch travel agency, a job he took after quitting his software consultancy position in the Netherlands to start afresh in China in 1999.

When one of his aimless bicycling trips led him to the cluster of farmhouses, he knew it was a special place.

But Bloembergen says it took a while to get people to travel to, and stay in, Chaolong. And SARS had gripped the country at the same time he began the radical tourism concept.

Soon after he began renovating the village, government officials, business people and other VIPs from Yangshuo began flocking to Chaolong to see what the Dutchman was doing with these dilapidated, remote farmhouses.

"Most of them came, saw and left, concluding that this strange foreign idea was never going to work," Bloembergen recalls.

"As one of my Chinese friends then put it: 'Even a beggar knows, you need to be on a busy street to do business'."

But some say nearby Yangshuo - a bastion of backpackers seeking a genuine slice of rural South China after checking out the world famous sights of Guilin - is now stuck in a tourist traffic jam.

The former farming village has swollen to become a bustling tourist town, chockablock with bars, souvenir shops and more than 300 hotels.

As Yangshuo heaves with thousands of tourists and the growing pains they bring, travelers seeking real rustic China are looking to its hinterlands - and so are hoteliers.

Today, establishments emulating the Outside Inn model are popping up in the surrounding countryside and are attracting more guests, Bloembergen says.

The Dutchman says his relationship with the village is "very good" but not without snags.

"Whenever there are issues, about water, waste or anything else, we solve it the best we can as fast as we can," Bloembergen says.

The villagers call him Aka, after the young hero of a folktale about a boy who goes hunting and returns with the biggest animals anyone had ever seen.

Bloembergen goes out of his way to mix with the locals and says the villagers appreciate that he always attends local funerals. Outside Inn employs five local staff and contracts construction and renovation work locally.

"I am a foreigner here, and I have created my own thing in farmhouses that nobody wanted at that time," Bloembergen says.