How to Sell Your Glamping Business For a Ton of Money

Big news in the glamping world this week. Under Canvas made its first ever acquisitions.

The glamping pioneer, itself acquired by KSL Capital in 2018, just bought The Fields of Michigan and Bar N Ranch in West Yellowstone. They’re the first resorts in Under Canvas’ “Outdoor Collection”.

I couldn’t be happier for Irene, founder of The Fields. Regular readers will know how much I admire her. She worked incredibly hard to create an amazing experience for her guests, and she deserves every bit of this success.

It’s exciting for the rest of us, too.

Every time an independent operator is acquired, it shows what’s possible in this space. I have no doubt that someone reading this dispatch will go on to be acquired by a larger operator, a private equity firm, or a REIT.

But no operator accidentally stumbles into a multi-million dollar exit. You need to be really bloody good.

It’s not all about the guest experience, either. Your entire operation, including the backend, should run as smoothly as a Swiss watch. 

Dreaming of selling your hospitality business one day? Here’s the path to a fat, retirement-funding exit.

Be Profitable

Duh.

Keep Clear Financials

Keep accurate and well-organized financial records from day one. Track occupancy and average daily rates, by unit type and by month. Potential acquirers will want to deep dive on this stuff.

P.S. This tip, and some of the others, came from Bob Kaplan and Shari Heilala on a recent episode of my podcast. Check it out on Apple Podcasts, Spotify and Youtube.

Have Expansion Potential

Lots of buyers will only acquire a property if they can add value. The obvious way to do this is by adding more units.

Clearly, you’ll need spare land. Crucially, it needs to be permitted, or there must be a clear route to approval. If you can’t get the permits you need, or if permitting will be a total headache because of angry neighbors or complex zoning procedures, the value of that spare land will be reduced.

You should consider getting permits for additional units even if you don’t intend to build them yourself. Acquiring those permits will add $$$ to the asking price overnight.

An Operation That Works Without You

Can you go on vacation without your guests noticing? Or is everything a total dumpster fire when you return?

No buyer wants to walk into a dumpster fire.

There are two ingredients you should aim for here:

• A great management team that you trust, and that will stick around after the acquisition

• Slick tech automations that don’t care who the new owners are

A Strong Brand

This can be a double-edged sword.

If you are the brand, you may need to cut a deal to stick around after the acquisition if you want to get maximum value.

But if the business has a strong brand outside of you, it can be a major check in the box for a potential acquirer.

Don’t forget, brand can be a combination of things. Maybe the land has a cool history, or the guest experience is particularly unique. These things go beyond you as an operator.

Work With a Broker Early

If you’re planning an exit, working with a broker is a great way to find the best buyers at the best price. A good broker will help you prepare your business for the buyer’s market, and will show your deal in the best possible light to potential acquirers.

A reminder that you can hear the real experts talk about this stuff on The Unique Hospitality Podcast. Listen on Apple Podcasts, Spotify and Youtube.

📰 The Posh Report

There are just 20 days left of the Posh Outdoors WeFunder round! 

Here’s the latest on all things Posh:

• Five of our beautiful mirror cabins are being delivered to Skyridge Glamping next week

• We’ve signed up 881 “Skyridge VIPs”, who have paid a $35 deposit. Our estimate of $100k USD in pre-opening booking receipts is beginning to look conservative

• We’ve hit $534k in our WeFunder pot, with more to come in the final month

For those who want to join us for the ride:

• $100 - $2,500 investors: Reply with your questions or invest right away

• $2,500 + investors: Schedule a call

That’s all folks!