MC Fireside Chats – February 8, 2023

[00:00:00] 

Brian: Welcome everybody to another episode of MC Fireside Chats. My name is Brian Searl with Insider Perks. We are normally joined by Cara Csizmadia from the Canadian, Camping & RV Council. She had a little bit [00:01:00] of a family emergency, so everything’s okay though, as far as I know. But our thoughts are with her, of course, as she goes through that.

And then we’ll also be joined by Reuben Martinez here, who’s a regular panelist on our glamping show. He’s running a couple minutes late, and maybe we’ll have Zach here too. I don’t know. Did he just, oh, there’s Ruben. He popped in. So maybe Zach will come to you. couple people come in and out, but we do have we do have David Smith here from Outside Capital, who is a regular panelist with us on the glamping episode, as well as Connor Schwab from Sage Outdoor Advisory.

And we’ve got two special guests for you today, Kate Morrel, who’s gonna talk to us a little bit about what her company does, and Whitney Scott, who has 10 different titles I’m gonna cheat and look at LinkedIn, Whitney COO of Terramor Outdoor Resort, of course which is what she’s here to talk about, but also recently promoted to the Senior VP of Strategy at Campgrounds of America.

Is that right? Did I read that correctly off LinkedIn? That’s right. All right. Good. So welcome everybody. I appreciate you all being here. So we’re gonna have a nice discussion about glamping. wanna take a minute to to thank our sponsor for the show which is Horizon Outdoor Hospitality. As soon as I fly in there, Glamping or their overlay here.

So for those of you who don’t know, Horizon Outdoor Hospitality is [00:02:00] a management company for outdoor hospitality, for campgrounds, RV parks, glamping resorts, which we’re gonna talk about today. So if you are in need of someone to take over operations, help you with some marketing or advertising or accounting, or all the things that those management companies specialize in then definitely reach out to Scott Foos and his team at Horizon Outdoor Hospitality.

We’re grateful to have them as a sponsor for our show. And then the last thing before we get into this is we’ll talk we’re gonna have a new segment here at the end of the show, probably the last five minutes or so, given how the conversation goes. But, so another secret project that I’m working on called Camp Vantage, and it’s just a segment.

We’re gonna talk a little about AI and tech and some big announcements that were made yesterday is what we’re gonna focus on today from Bing and this morning in Paris from Google. So let’s jump into glamping. I wanna start with Kate, just because Kate is in London or uk. The UK is it actually London or is it another state?

Kate: I’m in the uk. Yeah. Somerset. 

Brian: All right. Somerset, how far that from London for the people who 

Kate: The west country. 

Brian: All right. I was in London last [00:03:00] year and it was really crowded and I definitely need to go back and see more of the country, so it’s on my list of things to do. But Kate, tell us what you do.

Kate: I work right here in the uk specifically in the glamping industry and alternative accommodations. I’ve been directly involved in the industry for, I think this is my 13th year now. I started out with a rental agency and I help landowners and existing operators to diversify into our sector.

So if they want to add some different accommodations or they want to start a. Or a new site somewhere. I’ll be with them along the journey and help them along the way as a consultant. And I’ve also got another business, which is the design side where we design accommodations as well. 

Brian: Now, we’ve talked briefly about this with some other guests on the show as far as the UK glamping market kind of being way ahead, I think of where we are in the United States and Canada, for example.

, I think we’re playing catch up very quickly, but I think you’re definitely still years ahead of us. I would say conservatively speaking, and that, that plays to the evolution of some of the [00:04:00] accommodations that you have, as well as I think some of the land uses that you’ve used over there.

You talk about being a consultant for people who want to add accommodations to different types of land. Yeah. Is that something that you’ve seen evolve as more people look to get into glamping beyond the traditional caravan parks? 

Kate: It’s absolutely transformed in the last sort of five to seven years.

Really. Glamping has become an alternative accommodations of which I would. Glamping under that umbrella is being looked at by so many different business models now and so many different types of landowners. So when I was working with Quality and Earth, my background is small, unique boutique indie, indie boutique business models.

But since I left Quality and Earth five years ago, I now get approached by estates, country estates hotel groups holiday parks and investors that would normally invest in properties and and that sort of portfolio. And now looking at more rural business models as well. And they’re definitely looking to shake up the holiday [00:05:00] park sector of the market.

It’s gonna be a really interesting few years ahead actually, here in the UK . . 

Brian: Yeah. It’s really fascinating to me how you can take a business that’s not traditionally viewed as accommodations. Like we’ve, I’ve read a lot about wineries and I think I read about a brewery in the UK a year or so ago that was adding accommodations to the back.

So if you were drunk, you didn’t have to go home. But just to me, a brilliant idea, right? It keeps people around. It gives you another source of income to insure yourself or insulate yourself. And obviously there are people doing it just beyond wineries and breweries, but it’s really fascinating to me the flexibility that some of these accommodations, whether they’re on wheels or not on wheels, or you can tear ’em down in the winter or you don’t, just gives people that diversify their income.

Kate: It’s a very flexible business to get into really, no matter whether, I mean, you know, some people have got a winter business already, so they don’t particularly want the accommodations to be running throughout the winter months, or it doesn’t sit the climate or the location, things like that.

So what’s really interesting is we can shape the accommodation. [00:06:00] To suit any particular business model or location. So it’s such a flexible thing that glamping really. You know, so we could have tanks that come down at the end of summer. We’d have tanks that stay up or winter, but you wouldn’t necessarily want to rent them out in the uk.

We haven’t got our heads around winter winter Camping here in the UK yet. We just can’t, we just can’t get our heads around Camping out. I have a Facebook group and it’s got about 6,000 people in it with from all around the world. And somebody posted recently from Canada actually that they wanted to insulate their domes and spray insulation in the domes so they could rent them out throughout the winter.

And it gets to minus something silly that I temperatures, 

Brian: we definitely gets to minus silly. Yes. Sometimes 

Kate: it’s minus silly and I thought, We just wouldn’t bother here in the uk. We’d close the whole thing down. We’d, you know, we’d mothball it and we’d we’d go and do something else, go into months.

But you guys are hardcore . 

Brian: But it is interesting though I mean, eventually if they can insulate, not just insulate ’em, you know, temporarily, but if they can provide robust [00:07:00] accommodations where you could do ice fishing or that’s near ski resorts or that there are opportunities not everywhere and all the time.

Yeah. But there are a lot of people who will go snowshoeing, who will go out hiking in the winter. Like I do all that stuff near Calgary and vamp where I’m at. Yeah. So it’s 

Kate: May maybe in Scotland, but we don’t have, we don’t have the nice winter weather in the most of the UK unless you’re up in Scotland or the Welsh man Snowdonia.

 It just gets cold and drizzly really. So I, most of us just can’t get our heads around a winter glamping holiday in a tent. 

Brian: It makes sense. Last question for you real quick, and then obviously we wanna have you jump in the conversation as we talk to everybody else. But is there something that, that you’ve seen that is, that you, that’s got you really excited from an accommodation standpoint?

Or somebody who’s turning something cool into something you didn’t think possible? 

Kate: There’s a colleague of mine here in the UK that’s starting to bring some different designs of tents into the uk and really quite innovative which is reflected in the name of the company actually.

So I’m quite excited about what she’s doing. I’ll be honest with you, I [00:08:00] don’t wanna blow my own trumpet, but I’m quite excited what I’m doing as well because we’re shaking up the treehouse world and coming out with more contemporary designs rather than these three rustic treehouses. We’re sort of pushing them all along a very contemporary line as well.

And then there’s a, there’s another company, I haven’t seen what they’re producing yet, but they’re working with some estates. Here in the uk and I love their designs. They’re fabulous. Am I allowed to mention them? Yeah, go ahead. Nomadic resorts, they do some really cool designs. I love their work.

So there there’s some innovation happening and it, we need it really here in the uk cuz we have been going quite a while now. And especially when you’ve been in the industry as long as I have, you’ve seen it all come and go. I’ve seen so many suppliers come and go and try and shape things up by mashing two structures together or trying to get a bit clever with with the design and bolting something else on and you just know it’s not gonna last.

Really, the industry needs really good solid designs now and some good solid design content to take it forward. And [00:09:00] it’s started to happen now. It’s really exciting. 

Brian: Yeah, that’s fascinating from my perspective. And I’m sure Ruben, with all his years of experience can see this too. And by the way, Reuben Kate missed you in London at the Glamping show.

She was supposed to. Hi Ruben. Meet you. So you need to fly back out there in September. We were talking about that before you came. 

Ruben: I’ve been, I’ve just been there the whole time. I haven’t left. I’ve been looking for you the whole time, 

Brian: Kate. He’s alright. Anyway. But yeah, so let’s, so Ruben knows this.

I think in the beginning of what I think what we see over here, or we have seen over here in, in the industry as far as accommodations, is there’s the typical bell tents in the UTS and the, I don’t know if I wanna call ’em common, because they are really good accommodations and I don’t want to notch ’em down any, but that in the beginning of any industry.

And then there’s, as we go along and more deeper into it, there’s more innovation and more suppliers and more people get into it with different and new ideas. But then as you’re saying, I think there’s that trap of we’ve been in it 7, 10, 15, 20 years. How do we continue to evolve it? Then? It’s almost like the middle is the sweet spot, is that.

Fair, ruben, or? 

Ruben: Yeah. And I’d be curious to see what, you know, Whitney, David, Connor Kate, what you [00:10:00] guys think about this? 

Brian: Yeah, everybody of course toss it. 

Ruben: We were talking about this a bit earlier where, you know, years ago, . One of the things that the association was, I don’t wanna call it task, but suggested that we do among several things, standardization, but the other one was this definition of glamping.

And at that point in time, we thought that would actually be a harsh thing to do because we just didn’t really know what was gonna happen. And to define unit type, or it has to be this exact unit, with this exact space, with this exact, without knowing what was gonna unfold, we thought would be a little bit of a dangerous concept.

And as we now fast forward to where we’re at now and we look at, for example, the glamping show and seeing the different types of units that are there, the different types of design that, that keeps popping up year in and year out, I think. What we’ve seen is that specifically here too, that the entrepreneur spirit has really taken a hold and people are coming up [00:11:00] with some really exciting things.

And that’s also what the user demands in many different ways, right? Glamp is anonymous with unique and different and experiential. And, you know, if we just keep to bell tents and that’s it, you know, the, it’s hard for the industry as a whole to grow. So I don’t think there’s any danger in the amount of innovation in the different types of structures.

I think there’s complications, you know, zoning and permissions and you know, this fine line between maybe what is glamping versus what isn’t, you know, depending on who you talk to. But I think for right now that chaotic momentum and the different types of innovations that are coming up, I think are a good thing.

You know, complicated thing, but I think still a good thing especially for an industry that is still trying to. Define itself still, you know, still putting on you know, the shoes that it might wear for the next leg of the race and then, you know, it’s gonna have another leg of the race. But anyway, yeah, just curious what you guys think about that.

Brian: I’d love to touch on [00:12:00] the entrepreneur spirit for a second, because what you’re talking about is obviously very critical and very important, and I’m gonna toss it to Whitney and get her thoughts on that because I know Toby brought that up as part of her keynote at last year’s KOA convention.

And obviously there’s definitely an entrepreneurial spirit to starting a brand new brand called Terramor Outdoor Resort and all that goes into that. So Whitney, do you want to just briefly tell us, unless somebody else had something they wanted to add to Ruben’s point, but do you wanna just tell us what, for those who don’t know what Terramor Outdoor Resorts is?

Whitney: Sure. Terramor Outdoor Resort is a new vertical from K O A that is a high-end kind of glamping resort we call an outdoor resort. And you know, I think it is that startup mentality, which is very much to what Ruben was talking about, is that the indus, the glamping industry is very much in this innovation stage.

And to have been asked to define it probably would have shut down some of the opportunity and future success that we will [00:13:00] see. I think is that part of what people are coming for is something unique. And if we shut down creativity it would potentially shut down our market. Terramor , you know, is an evolution of glamping that we already do on our k a campgrounds, and it was just what we saw is that even within Glamps there’s different market sets and what we have on our campgrounds doesn’t meet.

Certain people’s criteria when they’re looking for glamping options. Some, there’s like a leisure traveler that doesn’t feel like a Campground can provide a glamping experience, and yet we felt like we could really utilize our knowledge and outdoor hospitality on campgrounds and build this really great experiential set for glamping.

And my light just turned off because of [00:14:00] sustainability and the ability for our lights to recognize when no one’s moving. So it’s it’s been really a fun project to see how our knowledge base of 60 years can infiltrate a new vertical and accelerate. To your point, Brian, that startup mentality that a lot of mature businesses don’t lean into.

Because they’ve just been doing the same thing for so long. 

Brian: So what would you say sets Terramor apart from a traditional Campground and of course Keya a little bit, but campgrounds in general, right? Because obviously there’s a difference with experience. You’re talking about in some ways a different market with your targeting luxury or higher end, especially specifically with Terramore and obviously a different amenity set and different accommodation set.

And so what in your mind sets that apart? 

Whitney: Yeah, that’s a really great question, Brian. So when we look at the Tamo experience, one it’s accommodation only. And when we look at traditional campgrounds, we’re talking [00:15:00] about mixed accommodations. So RVers, tentors, and accommodations. And I think sometimes what happens is some market, some people in those markets might be like I just wanna be with the glamping community.

I’m not necessarily, I. I, I don’t wanna be next to an RV. While other people are like, why would that matter? And so one, it’s an accommodation only brand. And then there’s a lot more experiential elements that we’re putting into that. Outdoor resort is, you know, there’s a lodge, there’s food that as the brand grows, we’re hope, you know, that would be a continual experience set that you wouldn’t necessarily find on a Campground.

So just some standardizations of the experiential set outside of just the accommodation itself. 

Brian: Are there things, and we hear this word right? We’ve talked about it a lot on this show and I know Randy Hendrickson uses it quite a bit, experiential [00:16:00] hospitality, but obviously it’s all over hotels and it’s a buzzword these days and I think it will continue to pick up steam, cuz obviously there’s definitely some meaning behind it as you’re indicating in your mind, What is important to focus on as far as experiential hospitality, because that’s a big word, right?

What really sets what really goes into the thinking or the experiences that Terramore offers? 

Whitney: There’s a lot of research that goes in be behind what Temore offers. So when we were specific about this brand, looking at what that, those experiential sets are was very intentional. You know, the pool environment the customer service environment we provide you, we have a, what we call is like an outdoor concierge that we call the outfitter.

That we, it’s the, probably the Hyatt hardest hire ever on a property because we require them to not only know the area, but be able to [00:17:00] adapt experiences to our guests. So what they’re looking for, maybe by who they’re coming with or what they’re looking to do. So they have to be really in depth, not only from how do I communicate what I know, but how do I listen and evaluate what those people wanna experience, and then provide the, a lot of different types of experience from wood shopping to oyster fresh oysters from the island.

We wanna make sure that you have a multiple of experiences to choose from, that only our resort could provide. . 

Brian: And you’re right. That is like I’ll just being as a business owner, right? That’s one of the most hardest qualities to find in somebody. Cuz I feel like it’s so rare. There are a lot of people who are super smart who can memorize or learn training, but there are very few people who can actively listen and adapt that [00:18:00] stuff.

And those people you hang onto forever. 

Whitney: Yes. . Exactly. And retention. And then we can all talk about how hard it is to keep employees . 

Brian: Yeah. That’s a whole nother topic we won’t get into now. . What are, what I, last question here before we of open up to the group to maybe ask you some questions or just what’s new in the whole glamping space as we normally do on the show.

What are some of the amenities that you’ve found that, that are really popular among your guests at Terramore that you’re proud of? 

Whitney: I really think we underestimated how much our glamping cut, our guests would really utilize. The food offerings, especially that we were in a location like Bar Harbor that has some of the best seafood in America.

We didn’t expect people to eat at the resort at night as much as they do. And I think it is a reflection on how people, glamp, you know, they’re going out during the day and [00:19:00] really experiencing the nature that we are hopefully providing them or in that area and those point of interests. And they’re excited by the opportunity to have an elevated food experience at the resort.

So we were thinking, you know, if the average day was three nights that they’d eat maybe one night and go out too, and it’s the reverse which is a pleasant surprise, but definitely something. We didn’t expect. 

Brian: Interesting. Yeah, I would’ve thought the same. All right, let me open that up to the group here.

You guys Yeah, I experience and glamping Go for it. 

Ruben: Brian, I got a question for David, cuz I think this is always an important part as we get into 2023 we got a really hard math equation problem for you, David. But any insight, because at the end of the day, what happens within this industry is built and supported by the capital infusions and people placing, you know, educated bets at investments within small, medium and large [00:20:00] projects.

Just curious the thought around, sorry, background noise. Thought around what you’ve seen in 2023 so far within your network around investments and interests and anything within the world that you operate in. And. What do you think that’s signaling so far? Cause we could place bets as we’ve done every single year here.

Here’s what 2023 might shape out and look like. But until, you know, until it starts to come to fruition, we don’t know. So just wanted to ping you with that one. 

David: Yeah, no, it’s a great question. I, you know, I think back, Ruben to the glamping show last year, and I think I said on stage there that, you know, the elephant in the room, in, you know, any sort of real estate or real estate adjacent business which in which includes glamping really is that interest rates are at levels that we haven’t seen yet, we haven’t seen for 10 plus years.

And that we’re in a [00:21:00] new reality that most of the hospitality real estate world hasn’t had to grapple with for a long time. And I think I also like jokingly referred to the, I think it was a comment Warren Buffett famously made about interest rates being that, you know, the chain that holds every asset class down it’s an inescapable force when you think about valuation and capital availability.

So what does that mean, you know, what’s changed since then? I think if you zoom out from our space and think holistically about the sort of tone in the real estate capital markets today, 2023 so far you know, it’s not really a great story there.

There’s a lot of, you know, even if you’re kind of just a casual observer of those markets, you may have heard about, you know, massive redemptions from some of the bigger you know, private REITs, like the ones that Blackstone and Brookfield manage. Anyone who’s been in the market to buy a home, you know, in that period of time knows, you know, knows how much harder it is to afford real estate [00:22:00] when rates are high.

So I think the tone generally in hospitality real estate right now is definitely a lot more muted than it was a year ago. It’s harder to get deals done. There’s fewer financing options for traditional hotel buyers. The folks that are getting financing are paying significantly higher costs of capital than, you know, they would’ve had to deal with a year ago.

And so the reality is that even if, you know, even if you have the financing available to you, you know, you may find that a deal that kind of penciled out 12 months ago doesn’t pencil out now because your cost of capital is higher. So that’s the big picture view. What does that mean for our space?

You know, I’m the eternal optimist you know, discount what I’m about to say accordingly. But, you know, my view is that, you know, the thing that I love that we’ve sort of built out thesis around at outside capital, about, about outdoor hospitality and glamping is that this space really does offer [00:23:00] what I think is a, you know, a risk adjusted return opportunity that you can’t get in traditional hospitality.

And on top of that, we also, as an industry benefit from some really powerful industry tailwinds that I don’t think are necessarily applicable to the hotel industry writ large. So what does that mean? I think the reality is that for most entrepreneurs in the glamping space or in, you know, investment players, I actually don’t know if the landscape has changed all that much because, you know, a lot of the, a lot of the trends I just described that the hotel industry is grappling with now are sort of challenges that.

You know, alternative accommodation investors, like in the glamping world, have actually grappled with for a long time, you know, talk, you know, if you talk to 10, 10 wouldbe developers or investors in glamping, I’m, I would bet you that seven or eight of them are sort of assuming a business plan that involves no debt financing because it’s just of just wasn’t available, right.

So [00:24:00] yeah, I guess there’s a few different ways to summarize that. But I would say overall the reality is that we are in a tougher market than we were in a year ago. The reality is that capital is more expensive and less available overall than it was a year ago. But I think that, you know, those challenges probably aren’t new.

And in terms of how that trickles down to the average investor in our space I think we’re you know, people have to deal with the same problems we’ve always had to deal with, but. We have the benefit of a really powerful, compelling macro story that is reflected in, you know, everything that Whitney just said and what you were saying before, Ruben, about the, just continued level of interest from the consumer in this space, which is the most important thing.

Brian: Yeah. And for those of you, Ruben, obviously if you have any follow up questions, go for it, or O’Connor if you wanna input. But for Whitney and Kate who are here just for the first time here it is a casual open discussion. So if you guys wanna throw any comments in or go back and forth or continue conversation, feel free to at any point.

Ruben: Typically, we just solve [00:25:00] all of the glamping problems all within one in 

Kate: one evening session. Yeah, that’s the expert. Where have you guys been for the last 13 years? 

Ruben: Solving. We’ve been here solving, now you’re rock up , 

Brian: we just didn’t have an internet connection with video . 

Kate: We’ve got similar problems here in the UK with with land.

The value of land has skyrocketed in the last 18 months and clients are finding it harder to get finance as well. So many projects are dropping out cuz people can’t get the finance and the bill costs have gone up as well. Material costs have gone up, so especially in like cabins and tree houses, so that, that end of the market, you know, they’re not getting as much for their money as they would’ve done beforehand.

And some people are just dropping out altogether and others are, are sticking with it and shaving off costs where they can to still get the build through. So there’s certainly some parallels between the two markets in that respect. 

Ruben: And I wonder, you know, something that’s interesting too is we’re helping people out with their, I mean, a lot of these plans to, you know, what David had mentioned too and everybody on this call has seen [00:26:00] significantly is, you know, the level of.

Whatever is launching today was pre-baked years ago. So a lot of these operations just take such a long time, right? To get in the best of situations, just take a while to get up and running. So it’s been interesting trying to think through and finagle and predict in a crystal ball, you know, if a project is gonna take three years to get up and running, some type of the contingency budget, cost of materials two years from now, cost to borrow in two years from now.

So it’s one thing to have a holistic plan, but knowing that plan is gonna take several years. I think what’s interesting, I just hadn’t really seen this in years past because of the just overall volatility and everything that David so eloquently said. It’s one thing to lay it out, but knowing that it’s gonna be a three year project, what are some of those sweets and costs two or three years down the road?

Because we can guess, but who knows what that’s gonna look like? And I’ve seen people have. [00:27:00] a lot more trouble with that definition than I have in the past, especially some larger scale projects that just take years. So what’s the cost of lumber in 2025? And that could be the difference between hundreds of thousands of dollars, you know, within each line.

Brian: How do you attempt to forecast that though? And I don’t know if, Whitney, you have some insight to share into this because you have so much experience with so many different properties. , or if you want to even, you don’t have to. 

Whitney: Ruben is speaking from my cards if I had them.

It’s, you know, especially within the last couple of years I don’t think there could have been a crystal ball to project, you know, if you had, were thinking about coming into the glamping industry in 2019 and what your projections were then for build out cost to what they are now. Whether it’s you’re not, you’re buying ’em.

a dome or a cabin and their increased costs versus the infrastructure [00:28:00] that you’re gonna have to put onto the property itself. You know, you’re we’re seeing double to triple the costs of what we would have projected back in 2019. And I don’t know if we could have foreseen that, you know, the, whether it was the war in Ukraine, covid, supply chains, inflation, you know, there’s just been such a macro impact on development costs that I, no, no contingency budget could have absorbed.

Which is causing a lot of real, you know, re to the point that, you know, Kate was making is stepping back, reevaluating, you know, are people sc scaling down potentially? , it’s you’ve got to reassess how to move forward. If your initial plan was somewhere back in 2019 or 2020 the positive is that the market is still very much there.

People want to travel and they’d want to go [00:29:00] glamping, and it’s only continuing. It’s just making sure to us at least, where do we fit in, whether that’s at KOA campgrounds or with Temore as it expands and making very hard and pivotal decisions on where it makes business sense. 

Kate: I think that what I’m advising some of my clients to do when they’re in that situation though, is to actually upscale their business model and their offer and really drill down to make it an experience led.

Accommodation. So we’ve paid more attention on the interior design. We pay more attention on the landscaping and and up we elevate the experience. And by doing that, we then can charge higher rental revenues and get more occupancy rates so we can claw back some of those additional costs in that way.

But I mean, yeah, it’s just sort of one idea really for if anybody’s listening and they’re thinking, it’s costing me so much money, how on earth am I gonna, you know, get my projected rental revenues back? It’s just scale it all up. But in terms of the experience that you were going to [00:30:00] offer, you don’t necessarily have to throw bundles of money at it either.

I mean, I was out at a, at auction today looking for items to furnish some cabins and it just takes a little bit more time. Sometimes probably, you know, I’m talking about very sort of small scale clients here, not 15, 20 units. But you can really drill down and offer a, a. a more immersive experience than something very authentic and people will pay more money for that.

Brian: Yeah, experiential hospitality is another name for it. Yes. Yeah. Yeah. The uniqueness of your property and yeah. For lack of a better word, the experiences you’re providing. Yeah. 

Kate: It doesn’t say everybody. 

Connor: I think I can add onto it and I guess to provide a bit of context for the listeners. Myself and my team at Sage, we were in the business of feasibility studies and appraisals for typically launching outdoor hospitality businesses, so glamping, RV, and Camping.

And we’re usually riding anywhere from four to eight feasibility studies a month. And that is, you know, we’re projecting their costs, we’re projecting the cost of capital, operating expenses, [00:31:00] and revenue. And to build on what everyone was saying, I think on the one hand you have cost of materials and cost of capital has gone way up.

But on the flip side of that you know, as what Whitney was saying is demand and nightly rates in the space are still at an all time high. And so that’s balancing out. I would say a lot of the returns that we’re seeing on projects are less than they were 12 months ago.

But still great projects and I’d be curious to hear what ev, you know, what the rest of the panel has seen in terms of activity in the space. But for us at Sage, interest has never been higher. Both from small mom and pop entrepreneurs to you know, some bigger players getting into the space and then having some big visions and big projects in mind.

I’m probably looking at anywhere from four to five new projects a week that we’re listening to, that are coming to us with an interest of getting capitalized. And so the activity in the space for us has never been higher. 

And for the most part you know, access to private and lending capital [00:32:00] seems to have been there at least in the projects that, that we’ve been working on.

So these different forces happening in the market, but from our perspective and a lot of the service providers that we work on, the architecture and the zoning permission side I’ve heard similar stories that, you know, they can barely keep up with demand and I would just be curious what the rest of the panel is seen.

David: I echo all of that and I think the answer to Brian’s question about, you know, projecting longer costs or other commodities is that if you can do that accurately, you should probably working on a trading floor. On Wall Street and not in the glamping industry. Cause you, you’ll make a lot of money if 

Brian: You just have your own retirement account. You don’t wanna share that with anybody on the treating floor.

David: That’s a good point. But no I think that’s right. That’s another, that is for sure another force that is at play across all this stuff. And I don’t think there’s, you know, you can’t you just can’t face [00:33:00] your budget on sort of speculation about, you know, where lumber’s gonna be a year from now.

No one knows, right? I mean, no, no no one can, no one really knows. I think the only thing you can really do is budget appropriately. You know, you can build in healthy contingencies, escalation, allowances and hope for the best. But to Whitney’s point, sometimes even that’s not enough.

And you just, you have to be flexible enough to be able to adapt. I think one of the cool things about glamping and outdoor hospitality is that you often do have more levers that you can pull to value engineer, you know, in a tough spot than you do in traditional commercial real estate, right? I mean, we’re not, you know, it’s less it’s not simple, but it’s certainly less technical than building an 80 floor skyscraper.

You, you where if you blow out your budget you know you may be able to value engineer, but you probably can’t just decide to not build the top 10 floors. You can do [00:34:00] that in a lot of these outdoor hospitality projects, which I think is another advantage that this sector has in a market of you know, uncertainty around you know, critical cost inputs.

The other thing that I’ve seen a lot that I’d be curious about Whitney’s take or con any anyone’s take on is that, . other problem I’ve seen across a lot of these projects is not just the cost of inputs, but also availability of labor. And I think that’s something that I think, Ruben, you’ve talked about before you know, a lot of the markets that these projects work well and also tend to be places where you may not have, you know, a deep pool of specialized contractors for, you know, whatever discipline you’re working on.

And that can be a challenge because, you know, if you just have one and then you get to that point in the project where it’s time to engage your electrical subcontractor or whatever, and you know they’re gone because there was, you know, more business to [00:35:00] be done somewhere nearby that’s like a, that can be a binary problem that you may not even be able to solve by throwing money at it.

Ruben: Yeah. And even, I mean, just to that point, and obviously whoever wants to jump my my, just brief perspective on that labor side is super interesting when it comes to the planning, execution and success of an operation because the good and bad, you know, it’s almost like the the positive is the negative in certain ways in these operations because the main positive is that a lot of these properties are in just beautiful out in the middle of nowhere yet remote locations, right?

That’s why people want to go there, right? But then what that also means is that the availability of not only finding and attracting the right labor pool, but then keeping them, and then even if you find them, to your point David, they might, there might be another job, you know, somewhere down the road that just pays more or they’re.

You know, they’re trying to manage multiple projects because they bid off more that they can chew. There’s so many complications [00:36:00] now with that, and it has a lot to do with, I think, location, right? If you’re in the, if you’re in the city and you’ve got a little bit more access to talent pool, that doesn’t become as much of an issue.

But because of the location, just keeping and attracting not only during the development side, but then also the day-to-day operations, it’s still unpredictable, you know, un unfortunately, and I don’t think that there’s a magic, you know, wand that we can wave yet to solve that for things to really tamper down.

And even the stories that we keep hearing of, you know, literally construction crews in contractors walking off jobs and not taking payment because they’ve got some lucrative opportunity in another state or whatnot. I mean, it’s still. Interesting. And you know, I think those that can’t is an advantage for those that have found them and keep them, you know, they’re already now, I think that’s the other key to it, is that they become ahead of the game and they can use that as their secret sauce in a way.

But those that can’t, it’s a struggle, right? It’s not something that’s you know, easily [00:37:00] solved. 

Brian: I think what I’m taking away from what both of you’re saying is that if you’re planning on starting a glamping business anytime in the next 20 years, you should buy a couple hundred acres of forest land.

So you control the price of lumber and you should start specialized K through 12 educational pools so you can raise your own people and then they feel guilty if they leave to go in another state. 

Ruben: Yeah. This is why we wanted to, you know, start the glamping university. That way people would just get their glamping internships and then it makes the world perfect.

Brian: You just need apprenticeship, a couple apprenticeships, and you’re done. You’ve got, we’ve solved it. This show is really valuable., Ruben, look at 

that. Yeah. Another problem solved just like that. 

Kate: Go ahead. Sorry. So where have you guys been for the last 13 years? Hey, 

we need…

Brian: apparently not buying forests and not training kids the right way.

That’s where we’ve been. . 

Connor: Hey team, I’m gonna have to jump off. Brian, is there anything else 

Ruben: from me 

Brian: before I hop? I mean, there’s always something more from you Connor, but No, thank you. I appreciate your time today. All right. 

Connor: Pleasure to see you all? Thanks everyone. 

Brian: Cheers, Connor. Okay, so that was a good segue to let Connor leave. [00:38:00] I didn’t know that was gonna happen, but, we’ll, I’ll take the credit for that. What else do we have from a serious perspective that we want to, is there any follow on for what Ruben’s saying from anyone? 

Whitney: I, you know, I just agree so much on the, that it’s not just the actual products that are inflating costs, but that acquisition process of construction is gaining.

Difficulty. You know, and glamping is a harder market to get contractors to the points of where we’re putting them. You know, they’re, they have to drive two hours when they can take a job that’s right in their neighborhood, you know? And the more remote we go, the harder it is to build and you’re gonna, you’re gonna pay for it if you can find it, and then you better keep ’em happy or they’re just going to leave.

So it’s hard and it, the same employee stuff happens from, [00:39:00] you know, once you get operating is, it’s the same issues as you’ve got to play a good wage and then you also have to provide a service to keep them there. You know, employee housing in general, in some of these areas where we’re putting.

Outdoor resorts and glamping resorts are continually hard to get workforce because there’s not housing in the areas. And you know, a pivotal piece of understanding your operational costs is, are you going to house your employees? And is that part of your development? And are you thinking about that?

Because if you’re not, you potentially could have the most beautiful resort ever, but if you can’t, staff at your experiential sets is gonna be very minimal. And what we’re finding is that employee housing piece is a top two request of employees is not only do you have it, but I wanna see it before [00:40:00] I even agree.

You know, I want pictures. 

Brian: It is a, it is an interesting question and obviously what I said was just a joke, but it really if you take a lesson from that, you’re talking about the GLA University Reuben, but if you take a lesson from, we’ve, we have a fourth week of the show here is focused on the RV industry and we talked to them about their initiatives recently from RV d a and from the RV Technical Institute to train technicians who are certified to repair RVs.

And so they’re making a big push toward this of having local classes and recruiting people and talking about the benefits and all those kinds of things. Is there a market like that where we can try to recruit more people who work exclusively in the glamping space? 

Ruben: We were gonna do, through the association, we have a partnership with the university where we can create kind of a certificate and we were gonna do it more for members to have more of a kind of in-depth training a way for them, you know, for the glamping show for example, you get some great information for a few days, but then, you know, we’re skin in the surface a little bit versus.[00:41:00] 

go in and maybe deep dive into certain topics and we floated it to a few operators into our board and whatnot, just to give some feedback. And what was interesting is that you know, we haven’t done it yet and it’s, we haven’t moved it forward, but the opportunity is always there. But the feedback was actually from some of these operators who have multiple sites.

They said, man, if I, they basically said I would pay whatever it takes to have some version where our general managers specifically can be trained. And even if they’re coming from an entry level position and then they work their way up to be the general manager because, you know, from their perspective, they often have to retrain them, right?

Because maybe they’re coming from the hotel world or maybe they’re coming from a different, you know, hospitality asset class, which is similar, but just different. And so that was interesting feedback that general managers and that, that. That role specifically, you know, there’s a need [00:42:00] for maybe more unique outdoor hospitality nuances that they’re not getting, you know, from other jobs.

Brian: We have any thoughts on that before? I, cuz I have one question to pose about it, but I don’t wanna spin it to what we’re gonna do at the end of the show if somebody has another valuable content or comment about that. 

David: You go Kate. No. You far away David. No, so I’m, I was, I’m probably gonna say something less intelligent than Kate was gonna say, but I think that it’s funny when you zoom out on this topic it, I feel like the glamping industry, all these, you know, all these issues that we’re talking about, I think as the glamping industry gets more sophisticated and there’s more, you know, there’s more sophisticated brands like what Whitney’s team’s building and.

You know, larger scale properties, projects, all of these problems that we’re discussing. You know, it’s like the glamping industry is starting to look a lot more like the hotel industry in the sense that, you know, we’re constrained by some really [00:43:00] big picture topics. Supply chain, labor avail, labor availability, zoning, and land use.

You know, these are all things that if you know, any ho any kind of tenured hotel operator will tell you that they’ve been battling with for, you know, for as long as the industry has existed in its modern form. And so I think, you know, what are the answers or what are the, you know, what are some of the other underlying dimensions of these problems?

You know, you can, if you really want to zoom out and think about that, look at what happened in the hotel industry. You know, there was this massive exodus of. entry level line level employees from that industry when Covid began and people basically just moved on and the whole hotel industry has re has struggled in the, you know, in the last 18 plus months is in the real kind of heart of the recovery phase to find those, to get those employees back cause they’ve moved on and they’re doing other things.

And so [00:44:00] I think when you think about some of these problems, you know, I don’t know, there’s definitely no silver bullet answer for sure. But I think that you can look to the hotel industry, I think to try and maybe find some hints about, you know, where some of the answers lie. And I think staff housing, as Whitney said is obviously a really important part of the solution.

And you know, ask any GM of a remote luxury resort about how critical that is to, you know, to keep the property staffed. It’s really important. There’s other creative things that people are thinking about, like the J one Visa program, which the ski industry has used for a long time to find seasonal employees for, you know, for their businesses.

You know, I, just to give a quick shout out to a, a, an organization that I’m a huge supporter of, there’s a nonprofit called Cira Hospitality, which is doing incredible work in the hotel industry, trying to link hotel operations businesses with with disenfranchised or sort of underprivileged community, urban communities by creating pop-up training schools [00:45:00] to try and provide a, you know, new kind of creative source of committed, motivated people to join their businesses.

I mean, there’s, like I said, I don’t think there’s a silver bullet, but it’s, it, I do think it’s interesting, I, that you can look over at the hotel resort world for, you know, maybe some of the you know, some of the. The hints of solutions that are out there? 

Brian: So here’s my question and it, and I’m gonna keep with this topic for a second before I focus on what I was gonna do in the last five minutes of the show, but it is somewhat related.

I’m gonna share my screen here and toggle this on. All of you have probably heard of, of ChatGPT and some of these AI tools that are available to us. But my question is, is does tools like this help change the education and the ability of people to learn more faster? So you can see, I, while I was, while you guys were talking, I was typing in this thing.

I have 20 years of experience in hospitality, mostly for chain hotels like Marriott and Hyatt. How would I translate my customer service skills into working for a Campground? Describe some of the nuances and ways I could learn to be an excellent team member of a Campground. And you can literally put this in here [00:46:00] and it will spit out an answer.

And does this help then someone translate careers or if they want to be involved more in outdoor hospitality and nature in glamping, quickly figure out. some of the ways that they can be adaptable and be more employable to a resort that we’re talking about. I think this changes the game as far as how quickly you can learn some of these dynamics and the specificities you can provide is, am I wrong?

Whitney: No I mean, I think that there’s definitely value, there’s a lot of value that comes with ai. But I think what, you know, Google Bard just did, you know, is that you also have to have, you know, some background of knowledge or have, you know, a framework of your own understanding to make sure that, you know, you’re not taking everything as [00:47:00] fact or that it’s completely right.

So there’s, you know, there’s still a human factor of. consideration as you look at technology like this and how it’s implemented. You know, AI or chatbots have been around from a hospitality perspective for a few years, and I think we’ve, as a hospitality industry, we’ve gotten better with them.

But there always had to be the human component in the background, whether it’s with your bank or with your glamping resort. There’s a moment where you’re like, I need a person, . So there’s just, I think that there’s just, it’ll always be there. Balance. Yeah. Yeah. 

Brian: That will always be there. I think you’re very right.

I don’t think that changes whether you’ve got an AI chat bot or a chat G P T or a, I’m looking through 10 blue links, which one is real and which one’s not. Yeah. But. [00:48:00] Yeah, I agree with you. There’s always definitely and I don’t think I’m saying for this as somebody who just gets hired and then bothers to research or bothers to ask questions during the course of their position, but is there a way somebody can use this to level up some of the skills necessary to enter into outdoor hospitality from a basic skill set of I’ve already got this customer service knowledge or something similar.

Whitney: I totally think so. I mean, why not use the tools that you have access to? And this is a great example. That’s my, 

David: I think maybe the more, I think, I mean, if you just look at that list, it, I mean it’s kind it’s just a bunch of like pretty vague truisms about, you know, how you can be a good employee.

Like I think the more interesting intersection point or potential intersection point from my point of view, regarding technology in the way that you can use it to perhaps solve some of these issues is to think about how you can use think about it from the other point of view, like how not like how can [00:49:00] employees use technology to access jobs or be better employees, but you know, what can these bus, how can these businesses use technology to better serve their guests in a more labor efficient way?

And I mean this again, like not to keep parking back to the hotel industry, but that’s also another trend that, or another tool that the hotel world has tried to use. I mean, tons of properties now where, you know, you check in and the concierges accessible via text message. And you know, the operator on the other end of the text message may not be in the hotel, they may be in a kind of central facility somewhere responding to text messages from 25 other hotels.

And so you have completely side stepped. The labor availability, constraint and whatever market you’re in. But I agree with Whitney and you Brian I think technology has to be a part of the solution to this problem. But I think it’s sort of more incumbent on the operator side to use it to to address the problem.

Brian: I think, I absolutely agree with you and I normally wouldn’t have brought this up, but it’s gonna flow [00:50:00] right into the conversation here, is that this is something that we just built for Verde RV Resort in Arizona. It’s the first thing that we’ve ever done or know of that’s ever been used at a Campground anywhere in the world, or an RV resort.

And it’s full ai, it’s connected to the same engine that chat G P T is from OpenAI. And it can answer literally any question about the resort. And they can have 24 7 customer service. You can do it in natural language. It’s not, you know, programming anything to where the customer has to act and ask an exact phrase.

And I’m not gonna spend too much time on it because again, I don’t. Publish or promote some of the things that I do. But think that very well disagree with me if you want, fits into the conversation that you’re talking about as far as operators using technology for their side. Is that fair or?

Whitney: Yeah, I mean I think overhead costs are, you know, you can’t, you, it’s very difficult. You can’t, anyone can do anything but it’s very difficult to staff customer [00:51:00] service around the clock. But you know, the reality is that mom, you know, mom might be the only time she has to plan a vacation is at two in the morning.

You know, technology, it’s back to David’s point, technology is how you can integrate it into your operations to help you know, the customer find what customer experience at large. And you know, I think that there are just a multiple. multitude of technologies that really help us as operators provide the next step in guest experience that doesn’t require a ton of overhead.

So those type of things are monumental for businesses to look at, to integrate into their operations. 

Brian: Yeah, I mean, it’s fascinating to me just and obviously I started researching this as, as a, you know, how can we do a regular chat, but I’m just [00:52:00] get it to answer questions. But I learned as the course of, we came up with literally 1700 different data sets that we program this thing with, and I spent 60 dedicated hours on it.

We’re learning, these are things you can’t fit on a website, you can’t put all that in a frequently asked questions. And as we know from dealing with campgrounds and the guests of those campgrounds, nobody reads the sheet that’s put in front of ’em as with the terms and condition to the hours or it, right?

I mean, probably one person does. Eventually we’ll find them. But so I think that there’s a whole lot of benefits to utilizing technology like this, and certainly I’m not the only person who can do it. But I think it’s very exciting to see that, especially when we’re in rural areas with staffing issues, how we can help alleviate some of these issues by using technology like this.

And it saves money potentially a lot.

Ruben: Don’t all talk . No. I think, you know, to wrap it up, I mean there’s still a lot that we have to see how it integrates and what 

Brian: for sure. Yeah. Nobody’s saying everybody do this tomorrow, [00:53:00] but we’re having a conver I’m only bringing it up because David brought it up from a flipping it around standpoint. I was gonna bring it up because you brought it up that’s right. I’ll take the blame for it. 

Ruben: I think we’re 

Kate: a bit old fashioned over here in the UK as we like to talk to people. And I, like I get the idea of an FAQ and what have you, but there are some bus business models over here that remain stewardly old-fashioned about being able to talk to somebody at the end of the phone if you have a question.

And that’s part of their U S P and part of their customer service and part of their business model. And that then I. I know some clients of mine that will not budge from that. They’ll probably have an FAQ and what have you. But I know I find those unless it’s a really finely tuned question and answer thing I find when I’ve tried to use my, don’t get the answers to the questions I need and I get quite frustrated and I feel a little bit too impersonal and I’m being fobbed off by a, an AI thing.

Whereas actually I’d [00:54:00] really quite like to talk to somebody. So I think if your business model suits that and you can get the right Q and as going, then fine. But I certainly overhear in the UK it would possibly alienate some people. Yeah, I for sure agree with you. It’s been really interesting tonight for me listening to you guys, cuz you, you obviously have quite a different market over there.

It’s much bigger, the scale’s bigger, whereas here in Britain it’s still a reasonably sort of small scale. In terms of the the number of accommodations or what have you, and it’s still very much, I’ve written it down here and I’ve underlined it lifestyle. It is a lifestyle industry here at the Indy Boutique and the sect, and it’s only just start to get on a big scale in the holiday parks and things like that where they’ll put, you know, 10 or 15 pods or 20 alternative lodges or something.

It’s really diff we, we’ve got quite a different market, I think, between the two countries. 

Brian: Yeah, and I think I agree, we’re a little bit over so we gotta wrap it up here. But I think I agree with everything you said. Like I, I’m not advocating for taking the human out of the [00:55:00] component. No.

I know advocating for supplement to, you know, hey, okay, here’s what the chatbot can answer, and it has 1700 questions in answer. So it has been fine tuned, but I think that’s the idea is to, okay, let’s give you the basic information and connect you with that human level person who can talk on the phone or answer an email.

It’s room for both, but yeah. Does anybody else have anything to add before we wrap up the show here? It was a great conversation. I really appreciate you all being here. Whitney, thank you for taking time out of your very busy day. Thanks for having me. About Terramore and Kate. Thank you for joining us again from the UK so late Connor here who had to jump off, but always his insight is valuable. And obviously Ruben and David, we thank you for being recurring guests of the show. But any final thoughts before we wrap it up? 

Ruben: Nope, I’m good. Enjoy the rest of your week. Thank you guys.

I really appreciate you joining us and we’ll see you next week for another episode. 

[00:56:00]