These low-impact accommodations are bridging the gap between luxury and immersion in nature. (image credits)
- Demand for glamping has been rising, especially since the pandemic.
- Rural municipalities are advertising their desire to have glamping businesses in their area.
- 44% of currently operating domes in Ontario charge over $450 for a weekend stay
- Models have shown ROIs of 35% or more for the first 5 years
Both the concept and practical implementation of glamping have been on the rise in the past decade. Trends have showed consistent growth pre pandemic and more variable growth post-pandemic.
Currently, the global market has a $3.5 billion dollar valuation which is expected to reach close to $15 billion dollars into the 2030’s. Europe posses the highest market share with Asia also having many new glamping operations. There will be substantial room for growth both globally and in Canada for at least the next decade.
With more people than ever before living in urban environments, the preferences for outdoor recreation are changing. A desire for a private space in a natural area remains consistent. However the standards of services, luxuries and infrastructure are rising. Investments in these result in enhanced offerings which can attract new demographics (who are willing to pay more) through higher attractiveness and accessibility.
A Canadian View
A recent report from Various counties in central Ontario acts as a key indicator of the interest that rural communities have for investments in glamping businesses.
It is emphasized that there is little existing competition from traditional outdoor recreation sites such as provincial parks. While they offer glamping accommodation, many luxury features such as linens and private surroundings are lacking.
Like in central Ontario, there are many other areas in Canada where similar opportunities for a glamping business exists within the 2-3 hour drive radius of a major urban area.
Another observation noted was that glamping is correlated to recreational activities. This synergy can be helpful to maximize demand for a glamping business. For example, profitability can be maintained even through winter by targeting those who enjoy winter activities such as snowshoeing, cross-country skiing and ice fishing.
In the central and southern regions of Ontario, 44% of currently operating domes charge over $450 for a weekend stay. 47% of active domes have a projected annual occupancy of >40% (including winter months). This number becomes 60% or more when excluding colder months. Therefore, running a glamping business charging a nightly rate between $400-500 would be both competitive and profitable.
Our own projections showed a 250% ROI (initial investment of $467,000) by year 5. This is primarily driven by strong cash flows but also supported by reliably appreciating Ontario land values.
The Lake Country proposal’s revenue projection showed a 10 dome business generating $184,000 (net) per year by year 5, or a 35% ROI by year 3.
While both projections have different underlying assumptions they both show a firm path to profitability
Takeaway
While this article does paint a nice picture it is not meant to gloss over the inevitable challenges of starting a glamping business, of which there are many. For this article, we aim to show you what the opportunity of a glamping business looks like. The rewards for glamping operators are numerous. However, investments must be made sustainably and with an honest ethos of getting more people to enjoy the outdoors. In future articles, we will cover the technical steps required to set up your glamping business.
Resources
https://www.linkedin.com/pulse/glamping-market-global-industry-analysis-size-share-trends-gupta-0c5ic#:~:text=The%20global%20glamping%20market%20was,15.3%25%20between%202023%20and%202032.
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://recipp.ipp.pt/bitstream/10400.22/22603/1/ART_PedroLiberato_2023.pdf
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.orillia.ca/en/doing-business/resources/Invest-Downtown-Orillia/OLC-GlampingOutdoor-Adventure-Opportunity.pdf