Glamping’s Growth Means Opportunities for Commercial Real Estate Investors

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The hospitality industry has been among the hardest hit due to the enduring pandemic. With ongoing travel restrictions and limitations, people looked for a way to get out of their homes and get a break while getting the space and connection to nature they needed and craved.

As a result, millions of Americans turned to the great outdoors and a new take on camping, “glamping”. Glamping offers the benefits of being in nature but with some of the amenities of hotels and resorts. High-end glamping destinations with unique and luxury amenities are popping up all over the country, especially here in the West.

With easy access to various local and National Parks, investors in California and surrounding states are well-positioned to take advantage of this growing market.

Glampers Look for More Unique Experiences

Glamping provides a luxury vacation destination in the heart of nature. For many, what glamping offers is an unforgettable experience. Kampground of America’s (KOA) 2019 Glamping Report highlighted that 67% of travelers thought glamping provided a unique outdoor experience, while another 56% said it provided a different kind of vacation. From luxury tents in secluded rural outposts to custom-made wooden cabins surrounded by mountain vistas, there are glamping destinations that offer something to a wide range of visitors. 

Most glamping destinations are located close to, or on the grounds of, National Parks. Increasingly popular destinations are those within a few hour’s drive of major cities. However, what makes glamping stand out are the amenities. It’s nowhere near the camping of your youth, with a pup tent and a few sleeping bags. Instead, glamping features treehouses, stargazing domes, refurbished barns, and even retrofitted shipping containers that come with comfortable beds, air conditioning, hot tubs, fire pits, WiFi, and private bathrooms.

Something else glamping offers is space. Compared to a typical resort, most glamping destinations provide more space for travelers, both inside their ‘rooms’ and out. With the variety of destinations, consumers can also choose between private and secluded locations or options with a resort-style feel, including swimming pavilions, restaurants, and bars. 

What makes glamping an interesting opportunity is it’s something that appeals to traditional non-campers. A study from Grand View Research found 83% of travelers who do not camp says glamping would let them experience nature in comfort. Another 63% prefer that glamping has the services and amenities traditional camping doesn’t offer. 

Glamping is a Growing Business Model

Those who have had doubts about the appeal of glamping only have to look at the appetite over the last few years. A 2019 report by Kampgrounds of America found that 30% of Americans had gone on a glamping trip during the previous two years. The same study showed that Millenials and Gen X were the two groups driving the trend. However, in 2020, during the height of the pandemic, the 18-32 age group comprised nearly 45% of the glamping market share, showing a wide age range of interested travelers.

According to Grand View Research’s Market Report, globally, glamping had a market size of approximately $1.88 billion in 2020, with expected growth to $2.35 billion in 2021. In terms of annual growth, the compound annual growth rate (CAGR) from 2021 to 2028 is expected at 14.1%. By 2028, the total estimated market size could reach approximately $5.41 billion.

Part of the growth can also be attributed to younger generations’ desire to share unique experiences. A Campground Industry 2019 Trends Report found, “One of the reasons for the growth of glamping in popularity is a desire reported amongst campers to experience a unique vacation option. Those campers camp the most frequently, taking seven or more trips a year, comprising 68% of all glampers.” Being able to tap into repeat glamping customers makes for an attractive market. 

Glamping Associated Companies See Boom Ahead

As the glamping business model has been validated with travelers’ in the past year, lender’s appetites for this specialized product type continue to grow. The Western U.S. offers a prime opportunity with land near state and national parks within a day’s driving distance to major urban areas.

Many investors see the potential, especially when glamping may provide higher margins than most hospitality options. In many instances, a night at a glampsite can cost the same, or even more, than an equivalent stay at a hotel or resort. And for high-end unique luxury experiences, travelers are willing to pay for upsells, including turn-down service, prepared gourmet meals, and guided activities. Yet, glamping also has lower operating costs compared to a traditional hotel. Without the need for significant building footprints and support staff, a glamping site can get up and running relatively quickly and for a lower cost, even with luxury amenities.

To start, look no further than the nation’s largest private campground owner in America, KOA. The company recently expanded into glamping, offering visitors glamping destinations with accommodations in yurts, train cabooses, and teepees, among other options. In addition, glamping-related startups, such as Getaway, a company that builds high-end tiny cabins within two-hour drives of major cities, are catching investors’ attention. In 2020, Getaway saw a 150% increase in bookings year-over-year compared to 2019, and it recently announced over $41 million raised in Series C funding

The Pandemic Continues to Impact Travel

Unfortunately, COVID-19 isn’t over, and the lingering impacts of the pandemic may linger for another year or two. Moreover, with Delta and other potential variants appearing, travel is again slowing down, potentially contributing to a rise in local travel and a desire to stay in more unique locations. This, combined with other factors, indicate glamping is here to stay over the coming years.

Mandri Capital has previously financed luxury glamping properties and is working to secure construction financing for a new glamping development (National Park location) in the Western U.S.

If you’re interested in learning more, don’t hesitate to contact Max Friedman via phone at (310) 554-6401 or email mfriedman@mandricapital.com for a confidential discussion on your pending deal.

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