Are Yurts and Glamping Tents a Good Investment?

For all the non-readers out there

If I had a dollar for every time I heard an aspiring STR Entrepreneur bring up Yurts and Glamping tents as an investment option, I’d have at least enough money to feed a family of four at McDonalds.

In this article I’m going to break down the interview I had with Sydney, who manages Tiki RV Park in St. Ignace, Michigan. We talked about how she built and manages her nine glamping tents from a financial lens.

I’m going to list out what you need before investing in tents, how to manage them and whether or not they’re sustainable.

From there you should have enough context to look at your personal situation and make an informed decision on whether or not to go this route.

Now, let’s dive in.

Glampgrounds Did Very Well During the Pandemic

To get an outlook on the future, we have to look at the past.

In 2020 you must remember all the hotels shutting down, Airbnb hosts pulling their listings and most importantly:

Camping demand increased.

And that demand hasn’t gone away.

There’s no question that anyone could make money throwing these tents up.

But putting the tents up and offering them is just half the battle, and the latter half of this battle is where the problems arise.

Breaking Down The Numbers

The biggest thing I was interested in when talking to Sydney was the initial investment cost.

She told me that the initial investment for a tent was about $2000. This includes:

• The physical tent

• Wooden platform it sits on

• Other fun things like string lights, fire pit and coffee machine.

Considering how much she charges per night, Sydney makes her money back in 20 days.

But that’s at face value.

You have to consider:

• Sydney already had a team to build these tents.

• She had to hire more people to manage the tents.

• She already had bathrooms and shower facilities for existing RV guests.

After Sydney broke down the numbers to her tents, I was blown away at how fast you can make money back with this option. Then she hit me with, “but…”

Uh oh.

Operating Cost: The Dark Side of Glamping Tents and Yurts

With any investment, especially real estate, you want to understand your “all-in” costs.

Here are the added costs that we talked about:

Staff: Sydney had to hire more staff just for the nine glamping tents. If you know anything about business, staff isn’t cheap.

Shower Rooms: Not everyone is nomadic. People like to be comfortable even if they choose to sleep in a glamorous tent. Having showers is almost the standard now. You’ll need a showering option in order to be successful in this space.

Bathrooms: Not everyone wants to do their business in a hole. The more comfortable people are doing little things like this, the more likely they are to return.

Water: I feel like this should be a given but I’ve been to glampgrounds in the last year where water was readily available so I gotta mention it. Get a well.

So if you’re thinking about building a glampground and you have zero of the above amenities, the tents are now your lowest cost in your “all-in” investment.

Tiki Hut RV Park checked all the above boxes. They were my favorite stay on my Michigan Tour for a reason.

The Sustainability of Glampgrounds

If you’re going to make a multi-thousand dollar investment into anything, you want to make sure that it’s going to be sustainable.

Yurts and Glamping tents are made of fabric.

Sydney had to replace multiple tents this year because of torn fabric. That costs money.

That’s on top of putting the tents up and taking them down every single year. This costs time and money.

So, are Yurts and Tents sustainable?

I believe any business idea can be predictable and sustainable. The glampground concept is sustainable but only if the owner is willing to put in the work to keep the machine going.

The Future of the Tents

I wrap this interview up by asking Sydney, “what’s next?”

She’s building cabins because they offer cash flow in the winter and way less maintenance.

Sure, the initial investment will be more expensive compared to the tents but I would imagine the operating costs will look way better.

The silver lining is that the cabins probably couldn’t have been done without proof points from the tent builds.

Through the financial success of the tents, Sydney decided to keep reinvesting and expanding the RV park to offer more options for the ever changing demand of travelers.

While the tents won’t go away, there is proof that people like to stay in something other than an RV or backpack tent. Building these cabins and still offering tents will provide more revenue to the campground and allow them to grow.

Which is what we all want right?

Summary:

If you’ve made it this far in the article, I’d imagine you’re still thinking about building glamping tents or yurts.

Just remember:

• Know your all-in costs.

• Build the additional amenities.

• Understand the work required to keep the machine going.

I truly believe that glampsites can be uber profitable and offer amazing opportunities for an owner so long as you have a plan.

Just like anything else in business.

I’m excited to see what kind of business you create. Keep me updated with your progress by tagging me on Instagram.

Go create the business you’ve dreamed about owning.