Glamping Luxury tentsinspired by African safari-style resorts are part of the glampingoffering (credit: Espen Bierud).

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SAN FRANCISCO—For Americans, going camping has always suggestedroughing it a bit. Fast forward to today and the great outdoorsenjoys newfound appeal in more luxurious trappings, says RobertStiles, managing director and founding principal,RobertDouglas.

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This glamping, short for glamorous camping, is experiencingwidespread growth. This form of experiential travel pairstraditional outdoor lodging with five-star fittings, guest service,dining and amenities. Specifically, luxury tents inspired byAfrican safari-style resorts, classic Airstream campers fitted outwith modern conveniences and tiny backwoods cabins with upgradedamenities make camping a step up from its predecessor.

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"You have all the benefits of an amazing hotel where a finehotel can't exist," says Peter Mack, founder and CEO of CollectiveRetreats.

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Moreover, as reported by research group Arizton, the US glampingmarket is projected to reach revenue of around $1 billion by 2024,growing at a compound annual growth rate greater than 15% from2018−2024. The Arizton report noted that the demand for cabins andsafari tents is expected to grow some 2.5 times the current rate inthe next five years as corporate retreats and adventure vacationsemerge as the new vacation trends in the US market. Also, expectgrowth in urban locations to start to catch up with rurallocations, Stiles tells GlobeSt.com.

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This hospitality sector also offers the benefits of potentiallylower costs associated with developing and operating propertiescompared to brick-and-mortar hotels, along with the ability tocommand premium daily rates that can equal or even exceed thefinest luxury hotels.  As a result, leading operators inthis space are now on the radar screens of select hospitalityinvestors.

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Stiles says growth can be pinpointed to the fact thatexperiential lodging appeals to those who like the idea of beingcloser to nature while still wanting to be pampered. The settingsand the guest experience also foster a sense of community, puttingexperiential lodging properties at the forefront of what allhoteliers are increasingly focused on: placing greater value on theexperience of a stay.

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"Certainly, the mantra of collect experiences, not justpossessions, and the continued emergence of health and wellnesstrends are boosting this component of the hospitality sector,"Stiles tells GlobeSt.com. "In some respects, the US is catching upwith other parts of the world, say Europe or Asia, which havealways offered a broad range of lodging options from dirt-cheapcommunal hostels to top drawer exclusive outdoor retreats likethose now being built here. Moreover, while the conventionalhospitality industry has its issues with Airbnb and online travelagencies, each has injected creativity and an ad-hoc sense oftravel for consumers from which the overall hospitality sector hasprospered."

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Thus, experiential lodging draws on the prolonged strength ofthe US hospitality industry where investment dollars continue toflow into hotel development, ownership and management, and advancedtechnologies such as artificial intelligence.

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"The major brands have rolled out an almost staggering number ofnew platforms, formats and brands in recent years in an effort todistinguish and capture specific lodging niches," Stiles tellsGlobeSt.com. "They have also invested in vacation rental and resortplatforms, with the sharing economy firmly in mind. This richplaying field has further encouraged experimental lodging platformsby the major brands and individual entrepreneurs alike."

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Leaders in this growing lodging sector include AutoCamp,Collective Retreats, Under Canvas, Getaway and Firelight Camps,each with its own special appeal and take on experiential lodging.And, institutional investors have taken notice. Where there werevirtually no institutional real estate investors 18 months ago,today, KSL, Whitman Peterson and Starwood Capital have all madesignificant forays into the industry.

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As an example, recently AutoCamp successfully raised $115million in new capital through a strategic capital and growthpartnership with Whitman Peterson, a real estate private equitycompany. KSL has reportedly made a significant investment in UnderCanvas and Starwood Capital has made a large play with Getaway.Collective Retreats has closed two successful capital rounds and iscurrently working to identify a strategic real estate capitalpartner best suited to achieve growth objectives. Continued capitalflow into experiential lodging is also expected to encourage moreplayers followed by merger and acquisition activity within three tofive years as the sector achieves greater scale.

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It all starts with consumer interest and demand. Entrepreneursin the outdoor hospitality space have proven an intensity of guestdemand that has been picked up by industry and consumer press, anda wildfire-like growth across social media. Consumers are 15 timesmore likely to post about outdoor hospitality experience than staysin more conventional lodging facilities. Importantly, they are alsowilling to pay a real premium for the rich experience and sense ofcommunity.

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While land rights do need to be negotiated for experientiallodging sites, especially ones at iconic locations, the process andexpense can be much less than for a physical hotel. Also,experiential lodging operations can be run seasonally and evenmoved to new locations, refuting the locked in place reality of thehotel industry. Recognizing that these properties can commandpremium average daily rates, extremely favorable room rate tocost-per-key ratios are possible.

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Moreover, the proportion of real property to total developmentcosts is lower with experiential lodging. Owners and investorsachieve income shelter advantages, as the personal propertycomponents of these developments depreciate in a five-yearperiod.

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In an article in Hotels magazine, Luca Franco, founder and CEOof Luxury Frontiers, said that adding experiential lodging to anexisting property, as Firelight Camps has done, is a profitable wayto create two experiences in one resort. In addition, LuxuryFrontiers has designed a number of tented properties with the firsttwo openings around the corner–Camp Sarika at Amangiri, Utah andthe Nayara Tented Camp in Costa Rica.

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"It's a way to widen your existing market and incentivize loyalguests to come back or extend the journey: three days in thetraditional building, two days in the tree house, for example. It'sreally a very compelling business strategy for a hotel to have asecond shared experience within the same property," says Franco."Because they're unique experiences, people will pay more."

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Also, as noted by the Arizton report, major vendors are offeringimmersive and transformative experiences that include activitiessuch as yoga immersions, walking tours, cycling, hiking trips,meditation sessions, healthy culinary activities, kayaking,recreational boating and spa treatments in the US glampingmarket.

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Thus, total room spend does apply to experiential lodging andlike many full-service and luxury hotels, today's experientiallodging platforms are poised for substantial ancillary revenue.Even activities readily available in many settings, such as yogalessons or spa treatments, can take on heightened enjoyment underthe stars or nearby waterfall. A familiar amenity in anunforgettable setting becomes a memorable experience, Stilessays.

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.