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The luxury camping or “glamping” industry is a $1.3 trillion dollar industry and it’s growing. Companies like AutoCamp and Under Canvas recently received millions of dollars in funding to develop new resorts throughout the U.S. Each currently has resorts under construction at Yosemite. As more and more people are slaves to technology and work non-stop in a faster and faster paced world, they want to disconnect in nature for a few days at a time on a regular basis. But they don’t want to “rough it” in their tiny bit of free time. They want to spend their hard-earned dollars to experience nature in comfort and style. How do hotel companies, small property owners, and traditional real estate investors wanting to cash in on the boom go about expanding into or starting an eco-resort to accommodate those hurried and momentary nature-seekers?
Obtain Property
The first step is to obtain property that is in a desirable location that can be zoned for a hospitality use. The easiest approach is to place your eco-resort on a property that already has a resort, lodge, B&B, or campground on it. It is also possible to find a raw land site that is zoned for a hospitality use. If the property is not already zoned for a hospitality use, then it will be necessary to get city or county approvals for the use which can take anywhere from a couple months to a couple of years depending on the area. Location is obviously the most important factor when selecting a property. Will people want to pay to go there? Is it easy to get to? Is it close to an airport or major metropolitan area? Is there already a lot of competition in that area? Is it beautiful? If it’s not beautiful, is there an experience that would draw people there like a sports arena, race track, vineyard, or a renowned spiritual retreat? A market study should always be completed before committing to a location to determine the demand. You may assume a lot of upfront capital is needed to obtain land to start an eco-resort. However, it is not necessary to purchase land. It’s typically much more economical to lease land, but finding and contacting land owners that may be interested in leasing a portion of their land to you is much more time-consuming than finding land for sale. Yet it can be done and is worth the investment.
Funding
Once a property has been identified, a business strategy and a proforma can be developed in order to obtain funding from either a fund manager, bank, or private lender or investor. Yet you’ll see below that a lot of upfront capital is not necessarily required especially if you have good credit.
Design & Upfront Costs
By using a luxury off-grid guest room that is technically a certified RV such as an Airstream Trailer or a “Zen Den” (www.zendentinyom.com), the initial capital investment can be quite low because it can be financed with an RV loan. A typical monthly payment is around $400/month, and only a 10% down payment – about $5k - is needed per guest room. An RV loan is much easier to obtain than a construction loan for a permanent structure. Depending on the location and overall guest experience, the monthly earnings for one guest room is typically between $3,000 to $10,000 per month, so the ROI is significant. There is a huge advantage to utilizing RV’s as guest rooms because they don’t require a building permit as yurts or other structures that are not on wheels do plus they have air conditioning, heat, and other creature comforts on board the unit. Zen Dens can also be custom-designed to represent your proposed brand. Another approach is to provide yurts, teepees, or beautiful wood and canvas tents which are temporary and fairly inexpensive to build, however they cannot be easily relocated as an RV can, don’t stand up to weather as well, require building permits, and don’t include off-grid kitchens or bathrooms. With these options, communal kitchens or bathrooms must be built, or brought in on wheels or temporary shipping containers which increases costs as well as approval timeframes with the city or county. In many cases, anything other than an RV may not be allowable. When developing an eco-resort, the goal is to keep the natural environment as undisturbed as possible and to blend in with the surroundings. To provide your guests with a place to sleep, go to the bathroom, and possibly cook, some infrastructure is needed even if you utilize a Zen Den which is can be fully off-grid and self-contained. It’s ideal if there’s power available at the site or it’s nearby and can be brought to the site. Without grid power, solar panels are the only good way to provide air conditioning, and solar panels cost about $10k per unit. A generator can also be used by they are noisy and smelly. Batteries can be used to power smaller items such as an iPhone or laptop, for a few days at a time. A heater, stove, and refrigerator can be fed off propane if needed. Another major infrastructure requirement is a road. You’ll need to provide an adequate road that will not be washed away in the winter so your guests and vendors can access your resort. The road will require a permit, and the city or county will possibly request an analysis of the increased traffic that will result from the development. Access to drinkable water is also a nice-to-have, although that can be brought in by a truck. Another consideration is how to eliminate sewer. A truck can go to the resort and empty sewer tanks regularly, or an on-site septic tank can be built if there is no access to a public sewer line.
Day-to-day Management
Once the physical aspects of your resort are set up, guest “rooms” will need to be cleaned before each new guest arrives, and of course, they’ll need to be booked which will take marketing and management. Other amenities such as meals prepared by a chef, yoga classes, guided hikes, workshops, entertainment, etc. will require careful selection of outside resources and will add value and create a draw for your resort. There are numerous hotel management companies that can run the resort or assist with whatever tasks are needed.
Turnkey Eco-Resort Development Consultant
Whether you're looking to add off-grid guest rooms quickly and inexpensively to an existing campsite, lodge, B&B, or winery, or create a satellite experience nearby, create an entirely new resort, renovate your existing resort, or create one-off pop-up resorts for special events, Garcia Architects offers comprehensive turnkey development services for eco-resorts. Both large hospitality companies and small land owners rely on our turnkey solutions when it comes to launching one-of-a-kind experiences for their guests while maximizing ROI.
