Summit Hotel Properties, a hotel-focused real estate investment trust based in Austin, Texas, will be investing in glamping resorts. After acquiring its first luxury treehouse resort in 2022, Summit is expanding its first glamping resort and developing another.
The company expects to grow through a strategic partnership with glamping resort brand Onera, which includes the right of first refusal for its following ten projects. In October 2022, Summit acquired a 90% stake in a joint venture to buy the Onera Fredericksburg, an 11-unit site in Fredericksburg, Texas, and an adjacent 6.4-acre parcel for $5.2 million.
Summit’s glamping footprint and investment are slated to grow significantly. The company announced the initial development of its next two Onera-branded projects, the expansion of the Onera Fredericksburg site, and a newly funded mezzanine loan for a separate glamping site. Both projects are expected to open in 2024.
Summit expects to invest between $40 million and $45 million in these first three projects, which are forecasted to generate mid-teens unlevered, stabilized yields. The company has several other exciting projects under review that feature similar return profiles to its existing projects and would allow it to continue to scale its investment in this rapidly growing segment of the industry.
Summit’s acquisition of more than $900 million of high-quality hotels in 2022 buoyed its busy pace of deals. In the fourth quarter of 2022, the company signed two separate portfolio deals to sell six hotels. The company spent $76.5 million on capital improvements in 2022 and expects to spend between $60 million and $80 million in 2023.
Summit officials reported total revenues of $172.3 million for the fourth quarter of 2022 and $675.7 million for the entire year. Revenue per available room was up 17.9% year over year in the fourth quarter to $109.01 and up 37.9% for the year to $110.91, with hotel earnings margins up 401 basis points for the year.
Summit’s investment in glamping resorts could contribute to the growth of the local economy, create new job opportunities, and encourage sustainable tourism practices. Summit’s focus on glamping resorts highlights the potential for the outdoor hospitality sector to drive growth and provide valuable experiences to travelers.
Isn’t it exciting to see Summit Hotel Properties investing in glamping resorts and eco-friendly initiatives? Engaging with guests for tailored experiences shows they truly care about sustainability and guest satisfaction.
Isn’t it cool how Summit Hotel Properties is hopping into the glamping scene? They’re really showing they’re up for embracing what people are into these days. With their partnership with Onera, they’re set to become a big player in outdoor hospitality. It’s exciting to see them growing and making smart moves!