How Glamping Can Give Alabama Landowners Extra Cash
September 23, 2022
Over the last few years, glamping, the trend where people go camping in cabins with plenty of comfort and amenities, has steadily risen in popularity. The U.S. glamping market will be worth $569.21 million in 2022, with a growth rate of 18.26%, according to a report by Arizton. With over 67% of travelers considering glamping as a vacation experience and 81% of glampers wanting more, says a K.O.A report. In addition, if landowners have "campable" land close to a popular outdoor attraction—such as the Alabama River—glamping can offer a welcome source of additional income.
How to Set Up Glamping Sites
There is room for a differentiated approach to how landowners set up glamping facilities. Depending on their financial resources, they can choose to build different types of lodging that come with varying levels of comfort (and price tags). The most basic approach is one where large, beautifully designed, and protective tents are available to campers. There are no amenities in the basic scenario, meaning campers must provide their power and potable water. The cost of acquiring a tent is $500 to $2,000. Wood frame constructions differ from the previous offering, which has power and electricity. The cost of this construction is typically between $2,000 - $4,000.
Another step from the wood frame construction is the A-frame handbuilt cabin, which typically comes with power and electricity. This third option is between $10,000 and $20,000. In addition, this set-up will usually have plumbing, depending on how close the cabin is to a sewage line. While the glamping accommodations might seem steep to some landowners, a simple calculation shows that investors can sleep soundly and be confident they will get a solid return.
What to Expect in Return
Across the nation, landowners will charge, on average, $250 for a night in a vacation rental (which we can equate with the rental of a comfortable cabin, our third option, for the sake of this exercise). So let’s make a conservative assessment and run a simulation where we dive 20 percent below that average and charge only $200 for a cabin that has cost us $20,000. So we take the highest end of the cost range and go low, setting our rental fee. In this simulation, it takes no more than 100 nights of occupation to earn back the cabin, meaning that the investor earns back the investment in a year.
Renters will quickly book any glamping accommodations 200 nights a year in warm parts of the country. But, of course, not every campground is in the South; in colder locales, the camping season has highs and lows. But even in a bell-curved market, an occupancy rate of 100 nights a year is doable. In our example, we focused on the comfortable cabin. Still, the return on investment ratios looks favorable for the most expensive segment.
Glamping shows no signs of losing steam anytime soon. For consumers, it offers a great escape from the hustle and bustle of the city in a manner that can be enjoyed by even those who are typically not eager to roughen it up. For landowners, glamping offers a welcome stream of additional revenue, where they can choose between different levels of investments in accommodation that runs the gamut from tents to A-frame cabins. The spectrum of options is as varied as the trails our country’s beautiful campgrounds offer, providing a solid return on investment for every investment option a landowner might choose to pursue.
Source: How Glamping Can Give Alabama Landowners Extra Cash National Land Realty (July 2022) Ryan Harris