By Elisa Garcia, Architect
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. Learn more at https://www.garciaarchitects.com/eco-resort-development.
