During the MC Fireside Chats episode last June 14 presented by Modern Campground, David Smith started the conversation by reintroducing Outside Capital, a financial investment management firm specializing in outdoor hospitality. Their portfolio ranges from glamping and campgrounds to nature-based hotels, and they provide financial backing for deals in the industry, also leading their own projects.
Dimphy discusses the inception of her campsite in Romania. She shares how the concept of glamping, relatively new in Romania, has gained popularity, particularly among Bucharest’s city dwellers looking for weekend getaways. She observes that her campsite, strategically located near the capital, is experiencing increasing traction.
Annette of Rustic Rook Resort describes their establishment nestled 19 miles from Colorado’s Great Sand Dunes National Park. The resort, which opened in 2020, offers 30 glamping tents, presenting breathtaking views of the dunes and surrounding mountains.
Irene Wood highlights the rising interest in the glamping industry as reflected in the increase in relevant articles and publications. She and David Smith concur with Brian’s assertion that the glamping industry usually starts with small operators, gradually attracting more substantial investments.
Connor Schwab sees a maturation process unfolding in the RV and campground industry. He envisions a future where the sector becomes more institutionalized and integrates technology to match the hotel industry’s sophistication, particularly regarding dynamic pricing, reservation systems, and marketing.
In the panel discussion, Annette delves into the story of Rustic Rook Resort. She and her husband noticed a high demand for campgrounds in Colorado and, utilizing their construction background, constructed their glamping site, opening its doors in 2020. Despite observing significant interest in the camping industry, she warns that it’s not a get-rich-quick scheme due to the immense work and stress involved in managing such a venture.
The panelists agree that the future of the glamping industry is promising. Irene Wood remarks that travel patterns changed after Covid-19, and brands who’ve established a lifestyle brand rather than merely providing accommodation stand a better chance at success. She also cautions about an increasing number of brokers looking to offload struggling glamping operations, suggesting potential threats to the industry.
The panel also navigates through the economic challenges that businesses face, including rising costs and aggressive competition. They observe some struggling businesses that did not anticipate these challenges in their initial project costs. To stay competitive, these businesses lower their pricing, which could lead to potential washouts. Meanwhile, some businesses like RV parks are thriving and expanding their services, showing resilience in the changing economic climate.
The group then discusses Dimphy’s business in Romania. Dimphy finds her business performing well, given the extended operating season. She highlights the role nationality plays in her campsite’s reputation, with positive reviews from German guests leading to an influx of other European visitors. However, she also outlines several challenges, including securing flat spaces for RV parking, establishing a reliable water supply, and dealing with local economic and inflationary issues.
The participants then delve into the real estate aspect, led by David. He discusses the complexities of the current real estate market, citing increased interest rates and floating rate loans as major obstacles. He notices that various sectors, including multifamily apartment buildings and the hotel industry, are being affected. Despite the difficulties, David emphasizes the importance of resilience and building successful businesses to withstand regular business cycles and exceptional situations.
Annette shares her insights on the trials of running a hospitality business, going beyond the allure of the”dream” phase and into the reality of daily challenges. Irene Wood humorously suggests a support group for owner-operators in hospitality to cope with unpredictable challenges.
The group also discusses market saturation in the glamping industry, with Connor expressing concerns about the rapid increase of glamping resorts. Annette suggests engaging with local planning commissions to gather occupancy data from all campgrounds, which could help evaluate if the market can sustain new businesses. The main objective is to foster a sustainable business environment and prevent a saturation leading to widespread failures.
They also ponder on various factors influencing market saturation, such as effective marketing and managing customer expectations. Despite acknowledging few nearing saturation markets, they argue it’s not only about saturation but also about the appropriateness of businesses to their markets. They also discuss the concept of opportunity costs in outdoor hospitality businesses, which often do not run full seasons due to factors like zoning regulations.
David Smith states that while market saturation is a concern, businesses should not solely rely on it. He underscores the importance of offering a unique and differentiated glamping experience.
