During the pre-show workshops hosted by the American Glamping Association (AGA) on Monday (Sept. 28), attendees were able to enjoy a unique, interactive learning experience.
Hosted the day before the kickoff of the Glamping Show Americas in Aurora, Colo., the pre-show event was changed this year to include a roundtable setting, where attendees could work through issues brought up during each session.
The first session focused on site planning and was hosted by Will Spurzem, Boundary Works; Whitney Schirauth, Schrauth Architecture & Consulting; Zach Stoltenberg, LJA Engineering.
Attendees were able to discuss site planning and ask questions about what they need to be aware of as it pertains to site planning and the development process.
Paul Bosley, founder and CEO of Business Finance Depot, then worked attendees through proprietary software that is designed to build feasibility documentation to support the development of a park.
He noted that the software is useful because typical bank templates give you three blank years with no place to show your assumptions, and lenders now want every assumption written out along with where it came from.
“Good sources for assumptions are industry peers, glamping association contacts and the pros you meet at events like this one,” Bosley noted.
He highlighted the fact that sales assumptions affect profitability and ROI more than expenses do.
“Occupancy is the key variable along with pricing,” Bosley explained, noting that Florida peaks in the winter, while the upper Midwest parks are normally weaker during the winter months.
Looking at startup costs, Bosley highlighted that the initial investment should cover real estate, inventory, fixtures, furniture and equipment, incorporation, pre-sale advertising, and training and travel.
“SBA and USDA loans require at least 10%,” he added, while noting that the top end can be around 25%. He suggests planning on 15–20%.
Closing costs typically run around 5% and are rolled into the loan.
“You can take advance reservations before opening, which helps cash flow a lot,” Bosley noted, while stating that he used pre-sold memberships in his early fitness career.
Highlighting expenses, he noted that:
- Controllable expenses include owner and officer pay, salaries, payroll taxes, advertising and software.
- Fixed expenses include land rent (one glamping franchise leases land in state parks), insurance, sales tax, franchise royalties, and depreciation of purchased property.
“You have to plan for inflation of about 3% to 4% a year on expenses,” Bosley said, noting that the Fed target is 2%.
Highlighting the debt cover ratio (DCR), Bosley said that lenders can’t approve a loan with a DCR under 1.0, while a very high DCR, like 6, suggests your assumptions aren’t realistic.
A target DCR is between 1.35 and 2.5.
The last session of the day focused on marketing and was hosted by Nathan Mayfield, of ResNexus; Mike Harrison, COO of CRR Hospitality; Whitney Scott, co-founder of Walden Insight; Will Beilharz, CEO and founder of Artistree; and Dave Smith, founder of Outside Capital and Nightsky Camps.
Overall, the conference is expected to draw over 2,000 trade show visitors, with nearly 200 vendors.
To learn more and begin registration, go to https://www.glampingshow.us/.
