Treehouses at the Confluence of Two Waterfalls - The Launch Story of Tuxedo Falls with Lark Elliott

Welcome And Why This Build Matters

Connor Schwab 0:06

Welcome back to another episode of the Outdoor Hospitality Podcast. I am your host, Connor Schwab. Today I'm joined by special guest, Lark Elliott, the founder and owner of Tuxedo Falls. Welcome, Lark.

SPEAKER_02 0:19

Hi, Connor. It's good to talk to you. It's good to see you. It's been a while since you were actually at Tuxedo Falls, tromping through the woods with me, putting together the feasibility study for Tuxedo Falls. So this is so wonderful to be in this position with you.

Connor Schwab 0:36

Yeah, this is, I'm really, really excited about this episode because, well, it's really special when we get to see the projects that we did the feasibility study on. And it almost always takes several years, sometimes like three or four years from when we actually do the feasibility study to like when the people are open and have a year of operating under their belt. You're now how how how many months in to are you? Is it 12, 18 months in since you opened?

SPEAKER_02 1:01

So I guess it would, we opened July 1st of last year of 2025. That was our actual the day we received our certificate of occupancy for for our accommodation units was July 1st of last year. So yeah, a little over a year. And then our main lodge opened. We got the CO for that in November. So November of 25. So we're not quite a year yet with the lodge.

Connor Schwab 1:28

Wow. Okay. Amazing. So so I had the chance to do the feasibility study through stage with LARC probably two years ago, maybe a little bit more, maybe maybe two and a half.

SPEAKER_02 1:39

Oh, geez. Yeah. It may I think it might have been a little more. And I wish I have it here somewhere. It's so worn out and dog-eared and like highlighted. I've carried that thing around with me. Of course, I printed it out. I'm sure, like, you know, I'm a very hands-on person, so I printed it out and have been carrying it around as as my Bible, or at least I did for a while

A Waterfall Property With Elevation

SPEAKER_02 2:02

there.

Connor Schwab 2:02

Oh, that's that is well, now you probably know more than us. So the the so maybe I'll just share a little bit about your your property because it's so cool. And normally I'd let I would let you share, but I've actually been there. And for me to get to go see a property as well as go look at the comps and the attractions in the surrounding area was always really special because you get to know everything so much more intimately. And I got to meet you in person to see the vision. And this property is it's about, what is it, 30, 40 minutes outside of Asheville? Exactly.

unknown 2:36

Yeah.

Connor Schwab 2:37

In a place called Zirconia, North Carolina. And it's just it's in the North Carolina hills, these like beautiful sloping hills. But what's so so special about it is it's called Tuxedo Falls because it's the property has a confluence of two kind of creekslash rivers, and both of those have multiple sets of waterfalls. So you have multiple sets of waterfalls and two kind of creeks that come to a confluence on the property. It's super special. And you have a lot of elevation on the property as well. So all of her units are kind of set towards these ledges or ridges, and they're suspended up in the canopy. So you get this really cool immersed experience. How do I do? What do you have to add to that?

SPEAKER_03 3:17

Oh my God, Connor. Wow.

SPEAKER_02 3:19

Can you uh yeah, could you do all my marketing from now on? Great job. That was perfect. Yes. It's it is an exceptional place, piece of property. I don't know how else better to describe it. Is it's and and people arrive and they go, Oh, oh, we love the we love the tents, we love the tree houses, we love the attention to deep, what you they'll and and always circle back. Of course, I say thank you. Well, I say thank you, and I ask, what could we do to improve? And then I say remind them it's it's what it's really about is the property, is the nature, this a unique ecosystem and gorge that Tuxedo Falls lives in. So it's it is, and uh many people, you've had many guests, and they echo the same thing that it's you need to have a unique piece of property. You need to have to guarantee success and to make it easier on yourself. It really is necessary to have a piece of property that meets the criteria of being, you know, having some water ideally, of just being either beautiful itself or just within steps, like neighboring property is a state park or national park or something like that. And then of course being within a couple hours, a couple hours of some major, a couple maybe major airports or major metropolitan areas. So the location meets those criteria in spades.

Connor Schwab 4:56

And

Choosing Tents And True Treehouses

Connor Schwab 4:57

tell us tell us about your units because they're they're pretty cool.

SPEAKER_02 5:02

Yeah, so our units, and I have to again go, I have to give credit to the glamping conference, and I'm not sure how I even found out about it, probably just online or maybe through you. But we discovered our units at the glamping conference, which if anyone is listening and you've never been and you're interested in getting into this business, yeah, sign up now because yeah, that's just it's once a year, it's great. You learn so so much. Um, I don't know how many years now. This will be maybe my third or fourth year going, and I learned something new every year, but that's where I learned. That's where I found Bush Tech Safari or our tents with Gary, with Gary Flax. Well, actually, actually, no, the daughter-in-law, Brooke, is my primary contact. She and I, you know, we she just she saw me kind of wandering around aimlessly, answered a lot of my questions, and then she called and followed up and she stayed after me. So kudos to her. And Richard actually is who. So she's she's she married Richard's son. But anyway, Bush Tech Safari, wonderful. You know, we were being new in this business. We were like, let's just go with who's been in the business the longest. Um, so that's we have Bush Tech Safari tents. We decided to go with more of the simple A-frame style, which is the least expensive and the most simple looking, uh, because it they look like tents. We Tuxedo Falls in this area that we're in in Zercone is home to a number of kids' summer camps. So we wanted to lean into that aesthetic totally. We want so that that so tents and then tree houses. So now the tree houses, we actually didn't discover those at the glamping conference. People kept telling me, oh, tree houses. Have you seen the reality TV show? There's two of them, the treehouse guys. They're not, they were this was before COVID. There were two reality TV treehouse building reality TV shows. One's the Treehouse Masters, one was the Treehouse Guys. And you can still see them now on, you can go look them up on YouTube. So I just uh cold called both of them and I said, What you know, do you have any, you know, how does this work? Would you have any interest? And the Treehouse Masters were they're out of Seattle, they are had they have a resort in the Tennessees, in the Smoky Mountains in Tennessee. And so they, I guess, had some sort of they had some sort of like they could not expand into this area. Then the treehouse guys were like, sure, they're based out of Vermont. They came down, visited, and oh my God, they're amazing. So so we did, we've got two tree houses, and these are real tree houses, meaning that they used the trees as supports for the tree house itself. It's a combination, neither of our tree houses, neither one of them we had enough trees to actually, so we had to support, so we had to supplement with with the black locust beams. But I love that because it's sustainable for one thing. You're using the actual trees, and then it's just you know, with one of the tree houses, the tree actually comes through the middle of the treehouse. And then they they're just very creative. They do things like one of them we have a swing inside of it, another one we have a hammock inside of it. The architect for the treehouse guys, his his hero is Dr. Seuss, if that can just give you, yeah. So we have two tree, two tree houses and four bushtech safari glamping tents. And then we have, oh, and of course, we have our main lodge, which is a 3,300 square foot uh bushtech tent.

Connor Schwab 8:49

And they're super cool. I definitely recommend listeners check it out at tuxedofalls.com. And these treehouses are one of a kind, right? They're totally unique designed. There's never going to be another tree, two tree houses like these, correct?

SPEAKER_02 9:02

That's oh yes, the tree houses, absolutely. They're one of a kind. You first identify the trees. Of course, there's certain types of trees that are more suitable than others. Then you have an arborist come out to certify the health of the trees. Of course, they immediately knock out like half of the trees that you think are perfectly fine. But the yeah, so then when you knockout is saying they're not suitable to build around. I know, exactly. We're looking at the tree. I know, I'm like, are you kidding me? What's wrong? I'm like, you just you're just looking at the tree. How do you know? But of course, we take we, yeah. So that was required by the local uh building department folks was uh that the arborists had uh they had to they they needed a letter from the arborists certifying that the trees were were were healthy. So that's what it was. So then you you've got the trees, and then the architect from there goes from there, like, okay, I've got this one tree here and one tree there. How are we gonna make this work?

Connor Schwab 10:01

Yeah, I love it. And it's I know when we were originally talking about the feasibility study, you're saying that you're like, this area is surrounded by kids' camps, like summer camps and things like that. And so one of your ideas was like to create kind of an adult camp almost with a little bit kind of marrying a little bit more of the simplicity, but luxury as well. And it was almost like parents could go drop their kids off at kid camp, and then they could go on their own, you know, romantic getaway or solo getaway and have this rejuvenating stay in nature that has some touches that are probably reminiscent from when they were kids, you know, staying in a really unique tree house or staying in this cool tent. And you call your tents, you call them tree tents, which I thought was a really was a really like well done, uh politically correct name, if you will. Because like they're essentially they're they have stilts on one side. One side you enter and it's kind of touching the ground, and the other side is on stilts, and that's where your personal deck is and the views are. So you have like this elevated side that's surrounded by and looking into the trees, and then on the other side where you enter is kind of at at the ground level because it's on a slope. Is that accurate?

SPEAKER_02 11:16

That is accurate, and we did. I personally whether I I personally struggled with how do we what do we call the tents? I mean, they are safari glamping tents, HTTP Safari is the company that makes them. So they originated from their safaris that they do. So it, but most people have not been on safari and stayed in tents. So that that was kind of out. And I I struggled with, you know, most people will hear the word tent and go, no, even though it's glamping tent, it still there's glamping is a broad term. So I was like, what can we do? And then also we already have the tree houses. So what can we come up with that so we that's how we came up with tree tent. And you're right, they are on platforms, they're very hot, they are amongst the trees for sure.

Deck Soaking Tubs And Design Details

Connor Schwab 12:08

Yeah, I think and there they have some really nice touches, like some really cool vanity sinks that look very unique and like good craftsmanship. And then they have my my favorite touch is you have these kind of luxury soaking tubs or bathtubs out on the deck. So like you can take your bath or you can soak like in this open air environment, which I thought was a really, really nice touch. It came together really well.

SPEAKER_02 12:32

It did, and you know, the thing I wish I could take credit for that in terms of oh, I thought of that. It was part of the initial plan. But my original plan was to have a part of our again, our philosophy, not only just to camp and to bring people back to that wonderful feeling of camp or youth being a, you know, their their carefree youth was also community, was to bring people together, you know, rolling out of COVID. I just felt like people needed more togetherness than you know, than maybe going somewhere and staying in the middle of the woods, not interacting with anyone else. So I wanted a big kind of like when you go out west skiing, and after a day skiing, everybody kind of piles into the big hot tub at the end of the day and has a drink and talks about, oh, where'd you know, what'd you ski, how'd you do, and just you meet people. So that's that's was my vision was a large upscale in-ground hot tub by the again community fire pit so that people could meet. Well, we couldn't, that was like virtually impossible with the zoning that we had. So that's when wonderful local plumbing supply company recommended these soaking tubs, which there's like a bath, so a large bathtub has a heating element around them, around the back side of it, so you can just sit in it for hours.

Connor Schwab 13:56

Oh, cool. Keeps the water warm.

SPEAKER_02 13:59

It keeps the water, well, where you lean back against the tub is got heating elements, so it keeps your back super warm and it does help to keep the water warm.

Connor Schwab 14:09

Hello,

Sponsor Story: Picking A PMS

Connor Schwab 14:10

listeners. I wanted to share a quick story. I recently started to help a client set up their three properties, two RV resorts and one glamping resort. And they wanted me to help roll out their new tech stack. And at the center of that is the PMS or the property management software. These clients decided to go with storable new book, and thank goodness they did because the property management software is the nucleus of everything that you'll set up your website, your social media, your bookings, your cleanings, everything. And it really handles the entire process from both the front customer facing side as well as the back end and coordinating cleaners and things like that. So it's, you know, setting up your photos and your pricing and your dynamic pricing and revenue management and your unit information and ensuring a smooth and customizable shopping cart experience to ensure a high conversion rate with your customers. And then they have all these great automations. It can send texts and emails to your guests before they arrive on the day they arrived or after to get feedback and reviews, and you can track all your financial performance. And then it also helps with the back end and analyzing your data. I honestly couldn't be happier with the experience. If I call the New Book helpline, I get an answer right away with someone who can help me with like three or four standing meetings each week with different members of their teams to set up the different capabilities and softwares. We're even using them to set up these property websites, we're using them for digital marketing services and SEO. And honestly, it has been excellent. I so I chased down Storable New Book to ask them if they would be sponsors of the podcast because I really believed in their product. Fortunately, they were willing. So they are today's sponsors. So if you're unhappy with your PMS or you're launching a product and shopping, definitely give them a call. They'll give you a free software demonstration. And if you let them know that you came from the Outdoor Hospitality Podcast, they'll give you 15% off your new book signature subscriptions. Can't recommend storable new book highly enough. Go check them out. Thanks. I've never heard of that. That's cool.

SPEAKER_02 16:11

I mean, we should we should like sell them in in our lodge. If we had room, we could. I've personally, I I know, I need to call Kohler and go, you need to do some sort of break on the next tubs because we we not only that, and also the heated toilet seats. We have heated toilet seats. We don't really tell people about it because we love kind of like their reaction of when they first sit down on the toilet seat. Yeah, so we have some little and we have the beds, the beds that you can like recline up and down. So yeah, I call them like hospital beds, but they're yeah, yeah. So we have those. Yeah, so you can just hit the little button and it, you know, goes up, and you can sit in your bed and read the book and look out over the gorge and listen to the birds. So we have little touches like that. That that's the number one comment we get from people. And I think you know, if I if there's anything, which is kind of shocking to me, but they the one is the attention to detail over and over again. We hear that from folks is you've thought of everything, your attention to detail, it's so well curated, and I just to me, that's I wouldn't do anything unless it were that way. So it wasn't like it was a special part of my plan. We also have we lean heavily into using local products at all as much as we can. So each unit has the dinnerware is pottery from a Western North Carolina ceramicist, a different one. Each unit has a represents a different potter. All of the glassware is hand-blown by a Western North Carolina glassblower. Even in the bar, we have all the glassware. Well, the martini glasses, the wine glasses, and the beverage glasses are all hand-blown by a local Western North Carolina. Our headboards and the beds, same, a craftsman, local craftsman. So but but that's just like it's easy to do.

Connor Schwab 18:17

Well, well, well done. What I call the last 10% in terms of like these thoughtful touches that really, you know, it might be the last 10% of the budget, but it, you know, it's that it's almost like 50% of the guest experience, if that makes sense. But we can talk about that a little bit more

One Operator Rule: Be Onsite

Connor Schwab 18:33

later. I know we've we kind of dove in already, but maybe to if there was one thing, I was gonna start with this, but we kind of just got right into it. But if if there was one thing you could recommend to other operators who maybe are launching or are a year into their business, like if you had one piece of advice that could really help them or or or move the bottom line, like what might that be?

SPEAKER_02 18:55

Wow.

SPEAKER_03 18:55

I mean, I've got tons and tons of advice, but I mean, it's hard to say like what one piece of advice would be. The thing, again, just back to the attention to detail.

SPEAKER_02 19:08

Uh that has that has really worked for us. So I think what I would say is you need to be on the property, you need to personally be involved in every or as many decisions as possible. I think that makes you much more successful than not being there, than being in the next state over or somewhere trying to do this from somewhere that's less than half a day's drive away, that you cannot be there. So I think that has made I can't imagine doing this from anywhere other than here, than on location.

Connor Schwab 19:50

Yeah, I love it. Just building the experience brick by brick. Well, I think anyone who's listened to this podcast has heard me gush about open sky outside of Zion, Utah with Bignal Dudson. I think his property is one of the best in the country. And I think his units are also some of the best in the country, and his just like dedication to the guest experience and like taking no shortcuts. Well, I think you are right there with Bignal in terms of how how special your compliment is how special your property is, as well as how awesome your units are, and how how much thoughtfulness has gone into those and just kind of a refusal to take any shortcuts and and be involved every step of the way. So I I love to see the way it's turned out. Maybe

From Investment Banking To Hospitality

Connor Schwab 20:37

let's kind of zoom out a little bit or or rewind. So you spent 20 years as a professional construction and glamping developer and operator before you launched this property, right?

SPEAKER_03 20:50

If only, wow.

Connor Schwab 20:54

How did you how you obviously didn't come from this niche? How how did you get into it? What did you do before, and how did you end up deciding you wanted to open Tuxedo Falls?

SPEAKER_02 21:03

Jeez. Well, there are components and pieces in my background, and I'm sure this is the same with others too, that contributed to my getting here. My career was in banking, in investment banking, and I my clients were buyers of distressed commercial real estate. And they would then reposition these assets, and I would finance and work and advise them on how to do that. So I have literally seen just a lot of stuff, but I've also seen how if there's a kind of if there's a will, there's a way. If there's if there's like don't ever say no, if there's like, okay, let's take this mess and let's figure out how we're gonna make it work and reposition it. So I do have that real estate. Background from both the finance side and then also the let's figure it out and make it work side. Just the whole and the and you know, don't you got to hear no two or three times before you ever stop to really go, ooh, is that really gonna be no? So I have that background. And then when I got kind of married late in life and had children and decided I, you know, would rather just yeah, put this the career on hold, the banking career on hold, and do some other, you know, less demanding time away from home things. And during that time, I did some guiding for Carolina Tailwinds and then truck travel, both cycling companies. So I picked up the hospitality piece working for those companies. I mean, in spades, the truck travel, oh my word, you just, you know, you're you they you you you're handed the book, you know, unreasonable hospitality by Will Ghidaro or Gadaro, however you say, yeah, you're you know, which I've read at least twice already. And you you're trained by so so I had the hospitality piece, I had the finance piece. I've always loved the outdoors. I was the kid that when my I would cry when my parents came to pick me up from camp. I was not, you know, versus the most if if there are tears involved, usually it's when you get dropped off at camp and you don't want to leave your mom and dad to leave you. I was the actually the opposite. I hated to leave camp. So and then another piece of the puzzle, which I think contributes to the detail and what we've done is again, because I met my husband later in life. We when we met, we both took a year off from our jobs, a leave of absence, and we traveled around the world mostly backpack style. We were in our late 30s when we did this, and we stayed in a lot of different places. And so some of the when I think of some of the properties and experiences and things that I have drawn from has come from those travels.

Connor Schwab 24:11

I love it. Well, you know, when you put it that way, it actually is a pretty ideal background for what you got into. So I'm I could see how a lot of those skills carried forward. So, so when did you start your search and like what was the why behind wanting to get into this space and like kind of what you know, what were you looking for? How how'd you end up finding this property?

SPEAKER_02 24:33

So it's

Buying Land First Then Finding Purpose

SPEAKER_02 24:34

interesting. I didn't really start. First of all, I didn't even really know about glamping, and I didn't start out looking for a property to develop a glamping business on. As it turns out, I was working with my father, who was not well at the time, to sell some property, some land that he had. We sold that, and then we needed to we needed to look for some additional property to roll it into to try and save on capital gains tax. So I was familiar with this property. I had just seen it from the road and I knew it had been for sale for a number of years. The set for sale sign just was very dingy and old. And so finally I was like, well, let me just call and see what this is. And that's how I found the property. It was very complicated. It had been on the market for a number of years because there were a lot of deed restrictions. But that's when my background in finance and what I did helped me. I was able to able to get the deed restrictions removed working with the seller of the property. It was took a number of months and it was not easy, but we were able to do that. Where I think some people, I was able to do it without a lawyer, so it might have, yeah. So then we own the property, and it's kind of like, okay, now what? Like it's stunning, it's beautiful. What do we do with it? And we said, okay, we want to, we want to preserve it, but we want to share it. So preserve and share. Or we like to say care and share, but then we also want to like educate people too. So there's an education component to what we're doing. We want people we want people to leave Tuxedo Falls having learned and picked up one little something that will help them in just to be more appreciative of the environment. Ah, yes. So love it. I mean, we don't want to go overboard about it, but we do have like along our trails, we'll have little signs that tell you about, you know, the whatever it is about the trees or about waterfalls or about salamanders. We have some threatened salamanders on the property and whether the environment's important to them. We have blueghes fireflies, which is an unusual type of firefly. So, and how it's being threatened because of all the light pollution, which is why we have low lighting around our property. So, you know, we're again that it's important. It's important to us.

Connor Schwab 27:19

I love it. So, so so this, so you bought the property and didn't didn't necessarily have like a business plan or an idea in mind. You kind of were like, let's just buy it and figure it out.

SPEAKER_03 27:32

We're just like, Yeah, let's buy it.

SPEAKER_02 27:35

It's so exceptional that uh I mean in the back of my yeah, I knew we would do something. And kind of at that time too, my kids were my kids were finishing college, getting jobs, they're launched, you know, and and I I was, you know, I was like, well, darn, you know, what what am I gonna do now? Like, what's my purpose in life? You know, I was kind of going through that, like a lot of mothers will do that, you know, where you've set aside your big career and done some other smaller things while you're raising your kids, and then the kids are gone. And I just needed something. And to me, it's like, okay, I worked, you know, you go to school, you work hard, you have your job, you work hard, you raise your kids and family, and that's wonderful. All these things are wonderful, but they're you know, you're doing it for other people, you know. So, and you're so it was like, I want to do something, I'm gonna do my own thing. I want to create something, I want to make an impact in my way. So with that in mind, we kind of lived with the property for a couple of years thinking, you know, what would be the best thing to do? How how should we all we looked at many, many, many different scenarios? A private lodge, a private club. We even considered a boutique hotel, small boutique hotel. We couldn't get the zone, you know, we were it wasn't zoned for that, so we couldn't do that. We looked, you know, I even looked, you know, I did look at like a subdivision where we'd split it up and sell off whatever, you know, five or ten several acre lots. I I was never serious about that, but we did look at a lot of different things. And then it just all of a sudden, glamping just seemed the perfect thing for the property, given the local community with all the summer camps, and as well as just I think it's something that folks the whole glamping concept is a wonderful thing that people need these days.

Connor Schwab 29:40

Yeah, that yeah, I totally agree. Oh, I love it. I love it. So you bought the property and then you know, you kind of started to go into the the the visioning and and start to do some numbers. Well, I assume you probably about then you got the feasibility study. Then we started to chat. But what

Stormwater Rock And Mountain Infrastructure

Connor Schwab 30:01

what was the what was maybe like the most I remember going through your construction budget with you or like when the construction was happening and you're like, I'm putting, I'm spending I forget what it was, you know, I'm spending $400,000 on piping or something or or grading or something like that. And I just I just remember having that kind of I was like, yeah, this is this is that horizontal infrastructure. That's that's where it all counts. What do you remember any like any crazy horizontal construction expenses that that shocked you or or or came up?

SPEAKER_02 30:37

Oh, it all did, it all did, and I can't even it like just pains me to even I just block all that from my brain. Yeah, we were working on the taxes the other day, and I was like, oh god, did I really spend all that my god? Yeah, you just can't even imagine, you cannot imagine. Yeah, this and it's funny now, like for a while there when we would have say like magazines, so we'd have guests, a magazine. So someone's coming to write a magazine article, or yeah, and my PR guy would was with me, and I and I'd talk about the septic, and this is our septic pump station, and this is our you know, and this is and it goes all the way down here and up here and over here, and then over there is the and the and he finally pulled me aside, he's like Lark, do not talk about this. He goes, I know you're proud of it, and I know the most valuable thing on your appraisal. It's like whoops, but you do not talk about that again to anybody, no guest, no visitor, anyone. So here I am talking about it again with you.

Connor Schwab 31:41

But yeah. What did the septic system cost and maybe all the connections?

SPEAKER_02 31:45

I I don't, I'm not, I don't even I I don't know. I mean, I do know, but I just can't even have not like specifically. It was so so what was expensive was we had to create a create a road, we had to build a road, an entrance, and we ended up having to build a very expensive stormwater. It was actually the stormwater is far more expensive than the septic system. So the stormwater system, because it's on a hill and you have this whole thing, you know, pervious and impervious, even gravel is considered, you know, impervious. You so you have to build this underground stormwater system where all of the runoff and water can go into it. It's kind of like a septic system, but for stormwater, and then it goes into the system underground. We our road is when is within a certain distance of a dedicated trout stream. So that is what requires the stormwater system. I mean, uh, you know, our county, as well as most counties, I think these days have very strict, you know, erosion control and stormwater regulations, which is great because you know, you don't I don't want to build something and then all this debris and dirt is running off into these pristine trout streams. But of course, so this you start in with the stormwater system, of course, you hit rock, you know, and then there's you know, you gotta the graters gotta go rent a hammer to hammer the rock, but then that's not even enough. So then they gotta dynamite the rock, and then just the system itself is very expensive. So it's kind of like at one point, I just was like, you know what? We're not gonna stop, we're gonna keep going. I've really blown the budget here, but we're gonna keep going because it's it will make sense, even if do something other than glamping, even if I do have to do a subdivision, you know, sell vacation home lots or do something like that and impact far more the land than I want to, I'm not gonna go bankrupt. Like I will this it it will work. And so, yeah, the infrastructure in the mountains is not a joke.

Connor Schwab 34:02

Yeah, and and for the listeners, you know, like like stormwater or or grading, essentially what that you kind of had a twofer because you have so much topography and then you have two two streams to consider, which are, like you said, highly regulated. The stormwater is essentially like what you're saying that I think impervious material, so like a roof or asphalt. You said they counted gravel as an impervious surface?

SPEAKER_03 34:26

Yeah, gravel, yeah.

Connor Schwab 34:27

That's the I thought that was not considered.

SPEAKER_02 34:29

No, it totally, yes. A gravel road is is impervious, believe it or not.

Connor Schwab 34:35

So the way the stormwater think about it is they total up all the surface area that is in impervious that creates runoff. So like a roof or a parking lot or whatever. And then and then it sounds like you also kind of had the double of like, oh, we have this protected trout stream nearby. So then you have to create a diversion so it's not all just going in and impacting the trout stream. Cool. Do you have like any sort of rough ballpark of like what all the horizontal infrastructure costs for the property?

SPEAKER_02 35:06

Not off the top of my head. No, I don't. It's by far the number one asset though. I mean, when you look at that, it's all underground, all of and we did do we did we did do the all of the utility build out is in place for at least we're at six units now. I think it's in place for about a total of 20 units. So we we're we're we're set for that, which is I'm so glad.

Connor Schwab 35:33

And are you on well or city water?

SPEAKER_02 35:37

We are we have a well, we have two wells. That was one of the that that the well piece went was went well. Yeah. So yes. That was the first thing we did. So we we did a rough road into the property, just got a temporary, we got a we were able to get a temporary permit to cut a rough road in for the well truck to get up to the property to drill for the well to make sure we had water. Because so, number one, you want to make sure you have water. And then number two, you want to make sure that you've got that you've got the type of soils that are needed for septicate. So we checked both those boxes off immediately.

Zoning Utilities Roads And Deal Killers

Connor Schwab 36:17

Yep. Yeah, and I I've mentioned this a lot on the show, but it's I can it can never be overstated. It's like when you're looking at a new property for clamping, the very first thing is what's the zoning? Can I do what I want to do? The second is what is the status of utilities and the availability of those to do what I want to do. And then probably the next piece is thinking about roads, you know, can a fire truck get in here? Is it enough for two cars to enter? There's oftentimes safety restrictions, especially if it's going to be a public, you know, a business serving the public. So they have to have certain safety precautions with firetruck access and things like that. So those are those are the big what you know, what we call like deal killers that all of a sudden, if you have to put in a 20-foot-wide road that a firetruck can turn around in, then oftentimes that that can kill a project. So always be thinking about that. Absolutely. And with utilities, the other kind of math that you're doing, you know, what we always came across at Sage and when we're doing projections and with our my current properties that I'm underwriting is it's like, okay, if you're putting in a well, that's a that's a big upfront cost. You know, that could be anywhere from 20K to 120K, depending on the depth that you have to go to. And oftentimes you don't know how far the water is or your likelihood of hitting water. So there's a little bit of risk. It could be at 50 feet or it could be at 500 feet, and it you could be going through soft soil or you could be going through rock. So like that is a big piece. But the good news is once you drill a well, you theoretically have access to water relatively for free in perpetuity. You know, you might, if you're serving the public, you might have to have that come out and be tested monthly or a couple times a year from the county to make sure the water's safe for your guests. But there's not really any cost associated with it after you put it in. Same with septic. You know, you there's a big upfront cost, and there's a lot of variables until they get in there knowing how big the system is needed. You know, septic can be a huge cost. But once it's there, your cost of maintenance on a septic system usually are relatively low. Versus if you're connected to city water or sewer, you know, that's typically relatively cheap to connect to if you have a connection right at your property and you don't have to run these long connectors to access it. But if you're just connecting to city water or sewer, that's pretty cheap up front. But then you also have to bear in mind that you're gonna be paying a water and sewer bill every month. So your your monthly cost is gonna be higher due to that. So when you're thinking about a property, if it has a good septic system and a good well already in place, you know, the value of that is almost always gonna be hundreds of thousands of dollars.

SPEAKER_02 38:56

Yeah, huge. No question about it. Absolutely. And if you are doing this and you you're getting the well, you're getting it well put in, I would highly recommend that you it is one of the most entertaining, exciting things. Of course, it mine went well, so but it you know, could be the go the other way. But yeah, we I spent two days out with these guys sitting there watching the whole it's fascinating. I felt like we were drilling for oil, you know, and somewhere in Texas or something, and it finally comes like it literally comes like spewing up when they hit the water, and you know, we're high diving and yelling, and then of course it's just like a a pocket, you know. So they're oh, it's just a pocket. I'm like, what's a pocket? Yeah. So then they go back and do it again. But it is really fascinating, you know, and and they drive, they come in, and you know, I've done all this research. I'm like, here's like I've got all the soils test, and I researched every I've got like here's the topography, and here's and here's the I even got those little witching sticks, you know, that some people use to determine where the water is. And they just they said, ma'am, we the location of the well is gonna be where we can get the truck. You're kidding, like that's it, like where you can get, yes, ma'am, that's it. I'm like, but I've got all this information, ma'am. The well is gonna be where we can get the truck. So that's how it started, and then we went from there. It was really fun.

Connor Schwab 40:22

Yeah. And uh, there's a big lesson learned, and maybe you could comment on this, but you know, you bought this, you bought this beautiful property that had a lot of deed restrictions and a lot of hair on it. You know, there's a lot of there's a lot to navigate with the trouts and this and the stormwater and the roads and the well, and like those are those are really big development risks. But you're you're coming in and you have taken those risks, and now there is water access on the property, and there is stormwater, and there is a road to enter the property. So these were all super expensive things, but you inherently improved the value of that property tremendously for any future use. So while it was really expensive, you know, I don't know how much it cost and everything, but chances are you would get your money back out from those expenses because of the level of improvements and usability that the property now is. Would you say that's fair based off what you know?

SPEAKER_02 41:21

Yes. Yes. It's it was a lot of upfront cost, no question about it.

Self-Funding Proof Of Concept To Scale

SPEAKER_02 41:27

And we we we financed this personally. We just did uh what the the plan was let's just do proof of concept, sort of a business school term that my husband, you know, shared with me, which is let's just do a let's put in the infrastructure, let's do a few units and let's see how it goes. Let's make sure we're not crazy. And so that's what we did was let's just do, I mean, I think he was like, you know, don't do the lodge, just do three tents in a tree house. And I'm like, we're gonna do more and we're gonna do the lodge. So we ultimately agreed on that and we financed it ourselves using, I mean, I just used, you know, some inherited some inheritance and then all my person literally all of my personal savings. And then at the time, I you know, I was going at it alone. My husband was still working in his job that he's had for a number of years, so he was kind of a weekend warrior with me. But he so he could then, you know, I kind of got to a point where okay, I need to either go get a loan, and I'd spent a good bit of time talking with Live Oak Bank, and I may ultimately go back to them. I was very impressed with them, was being SBA type of loan. They they're very impressive and they understand the the sector, but then finally my husband's like, I'll just give you a loan. So he's so we have a lot personally tied in, tied up in it, and we do eventually, but but but in doing that, it allowed us to do things like go over budget with the stormwater, build the utilities out fully for what is probably would be the right number, I don't know, maybe it's bigger than that. I the thought of having to do utilities again would get me over the edge. But it allowed us the flexibility, allowed us a lot of flexibility. Whereas if we had been, if we had had financing, traditional financing, we might not have been able to do that. So I am glad. Now going forward, we will for sure, you know, we will seek, you know, investors, debt, we'll set this up and structure it more like a traditional commercial operating hospitality property should be set up.

Sponsor Note: Feasibility Studies That De-Risk

Shari Heilala (Sponsor) 43:44

Hello, listeners. This is Sherry Halala, founder of Sage Outdoor Advisory. If you're launching an outdoor hospitality project like Lamping, we can help. We offer feasibility studies and appraisals. What that means is we look at your specific market and proposed business offering and complete an in depth analysis to make sure. That your planned business will be profitable. Getting a second opinion on your proposal and forecasted financials is critical to understand before you spend years of your time and hundreds of thousands of dollars. This is particularly important if you are looking to raise money for your project from a bank or private investors. They are going to want to see this type of deep dive analysis from an independent third-party specialist in the industry. We at Sage have completed well over 250 feasibility studies and appraisals in outdoor hospitality in North America in the last four years. So we understand what it takes to bring a project from concept to reality. If this sounds like it could be helpful to you, you can go to our website, SageOutdooradvisory.com, and schedule a call with our team. While you're there, check out our proprietary glamping database map too. Thanks. Now back to the show.

Connor Schwab 44:45

Yeah. And and how much uh utility infrastructure do you have in place now? So you have six units currently, and you have enough for approximately.

SPEAKER_02 44:53

We have enough for 20 total.

Connor Schwab 44:56

Yeah, and that's that's a big deal. And you have the entitlements for that? Yes, we have it all. Yeah. Yeah. So that's a great place to be. And you're yeah. So how

Launch Whiplash From Builder To Operator

Connor Schwab 45:07

how how was launch? How'd launch go?

SPEAKER_02 45:10

Oh my gosh. So launch was was you know, it's crazy. It's you it is so you go like literally from just like the snap of a fingers, one day you're a developer and you're a builder to the next day you're an operator. I mean, it is, you know, we we had the month of June. We we so we took one month prior to opening to do friends and family, which I highly recommend doing that. We did a month of and we were bare, we were still under construction in some places, lots of hammers, but we just we had friends and family come and we got lots of feedback and we sort of started to get our understand what it's like to to be an operator, but then July 1st, we were go, we were for real. We were, you know, these were people that were just using our reservation system and booking to come. And so that was that was I wish I had maybe realized how much of a transition that was gonna be. There's two very different, and again, it's just six units. So when I say just it's six units, so it was just myself and a few other people, you know. So I didn't get a lot of sleep, let's put it that way, for the first six months. Yeah, it'll take a toll on you those first few months.

Connor Schwab 46:27

What was your maybe biggest lessons learned in the in the first three to six months? Like if you were gonna do it again, is there anything you would have done differently? Or definitely do the same way?

SPEAKER_02 46:38

I would have probably slowed down a little bit. You know, we try the plan was to open in I you know, I we're in the mountains of North Carolina, so the big season is the sum from spring through fall. So I wanted to open May 1st. I wanted April to be kind of our soft launch. Then we opened officially. We had Hurricane Helene in the fall prior to that. So that set us back. You know, we didn't have we had some damage to our hiking trails, but we didn't have major damage otherwise, thankfully, or relatively speaking, major damage. But we lost, like, you know, all of the workers, all of our construction people were out helping others or dealing with their own lives. Either, you know, if they weren't dealing with their own lives, putting their own lives back together, they were definitely helping others because that's what everyone was doing, you know, if you had some sort of construction equipment or expertise. So that put us behind. But I was I was determined I wanted to open, you know, in the summer. I didn't want to open up in the fall, and then we go right into the winter. So I rush, rush, rush. And retro uh it's hard for me to say this. It's just not my personality. I mean, I'm very ADD, I'm very get it done now, I'm very driven, but that would probably be the number one thing is maybe we should have just slowed down and waited a whole nother year and opened the following season. Yeah, I don't know. You you don't really look back.

Connor Schwab 48:18

Yeah. Um yeah. What uh and is there like a main reason for that? Like, was there something in particular that was causing a lot of chaos or just like making things really hard for your first six months of operating with guests, or like what what was it that made it particularly challenging?

SPEAKER_03 48:37

Yeah, I guess so.

SPEAKER_02 48:38

Um, you know, things like accounting and bookkeeping. So it was just me. So it's just me. I mean, my husband now is is he's retired and from his job in finance that he's had for many years and is now working with me. So, but at the time it was just me, one person. And and that's actually it would have been nice, and it still would be nice to have someone else because you know, my husband's made it very clear he's involved, but he only wants to do the outdoor work. He wants to work on the trails, he wants to do, he doesn't want to learn the res Nexus, you know, a reservation system. He doesn't want to do anything with marketing. He's defined what he wants to do, which is great. It's perfect. I'm happy to have him. But yeah, it was just me. So

Marketing Hand-Off And Finding Hidden Gem

SPEAKER_02 49:29

a lot of things like bookkeeping was probably the number one thing. I just didn't do a great job with the bookkeeping. I didn't I finally found the right, what I think is the right social media. We're using Hidden Gym, which I found through your podcast. Yeah, a couple of months ago. Yeah, exactly. How's it going?

Connor Schwab 49:47

That's yet.

SPEAKER_02 49:49

Yes, it's going great.

Connor Schwab 49:50

Tell me more. Tell me more.

SPEAKER_02 49:53

Yeah, well, I haven't specifically looked at I could all I can say is since we started with now a couple things happened. We did have a huge magazine article come out, but we have had we've just blown up. I mean, we we are we're almost completely booked. I mean, we just have like openings kind of here and there until sort of early November.

Connor Schwab 50:18

Congrats! That's so exciting.

SPEAKER_02 50:20

It's yeah, the the flip side though, I will say is our Instagram, our social media, and Facebook was very personal to me. We were doing it. I mean, we had photographers, of course, come in and and we would have helped you know, influencers and various things, but you know, we we were writing. I was writing the, you know, I was figuring out how to do that. And I'm not a young person, it doesn't come natural to me. So we're figuring out that, we're doing it. I'm personally writing it. I know I'm creating the content. So handing that over to them was a little bit like you know, like dropping your kid off a kindergarten for the first time, just letting go. And you know, they use AI, you know, to the not much, but a lot, like some. So I'm like, wait a minute, that's not those two people. I don't know who those people two people are sitting by the fire, you know, the fire pit. But it's yeah. And and how I wish why did I just discover them now? Why couldn't I been looking for the right marketing piece for over a year? And why did that take me so long? I spent a lot of time talking to a lot of different marketing firms, social media people. And so I don't know what I missed there. I don't know if slowing down would have helped or not, but thrilled to have.

Connor Schwab 51:43

Yeah, we just on that note, we so we've now been running with them on two properties our Outpost Grand Canyon, the 12 unit airstream, and then Ponderosa Pines, which is launching in about a month outside Flagstaff with 35 keys-ish. And yeah, super interesting. For Ponderosa, this is just nuts. It's they grew us from in 60 days of running ads, they grew us to 12,000 Instagram followers from zero. And and then we got 2,500 email signups, and then we've gotten f probably 50,000 in pre-bookings in the last 30 days, basically, which is just insane. And then that's working way better than we could have hoped. Outpost, the other property that we're using for them, has been far more modest. I think maybe we've grown two or three thousand social media followers, and we have, I think we've gotten 800 email signups in the last few days. But we're spending $50, I think we're spending $40 a day in ad spend at Outpost currently, and we're spending around $100 a day in Ponderosa. And they kind of scale the ads depending on how effective, effective they're being, like cost per click and things like that. Right. But yeah, it's it's I've spent so much time looking at that in the last 60 days and trying to, you know, do we want to spend the money on Google Ads? Do we want to spend it on paid social, on SEO, on you know, the revenue management?

SPEAKER_02 53:17

Hire the professionals. Yeah. Just hire the professionals. Don't try and do it. Well, you're younger than I am, so it comes naturally to you young people, but no, for me, hire somebody, hire the Do you use a revenue manager, or do you are you setting all the pricing yourself? Oh

Dynamic Pricing Debate And Revenue Tools

SPEAKER_02 53:33

my God. I just spent the past day sitting down and doing it by hand. We tried, we tr we tried one of the just like we did a free trial. I don't know if it was Price Labs or is that what Price Labs?

Connor Schwab 53:45

Like Price Labs, yeah. So Price Labs does like dynamic pricing and gives you the market data to do it. And I think maybe they have a tool that automatically does it for you. We we use a group called Free Wild. We've been using them at the Outpost for about six months, and then we've been using them at Ponderosa for about 60 days. But they basically they charge you know a five grand startup fee and then two and a half percent of room revenue for each month that they're managing. And so it's they kind of save my life because with everything that I had going on, like I there's just no way that I could be paying. It's kind of like social media. It's like, hey, I know this is important. I also know it's the last thing I'm gonna get done. And same with like dynamic pricing. It's like, hey, I know this is super important, and it's probably the last thing I'm gonna get done as far as saying, like, oh, hey, we've booked five units on this day. We should make our last unit like much more expensive, or you know, or hey, this this time is really slow. We should probably cut prices. But essentially what Freewild does is they they're taking all the data from price labs and then they're making manual adjustments. And then they have a big client list so they can kind of see what's happening in different markets. But they've been a huge help for me. I, you know, we kind of have a big debate in our company. The folks who are coming in are like, we don't need this, we don't need to be paying two and a half percent of our revenue to these guys to manage our pricing. And my stance is like these guys almost guaranteed are gonna make two and a half percent more revenue for our company if they're actively at the controls and keeping an eye on it and they're adjusting it weekly versus one, if I have to do it, one, I don't even know how to do it with all the with all the technology and the OTAs. Like it's a whole new skill I have to learn technically. And then also, I'm not gonna do as good of a job as them. Like they already they do it for 80 properties, like they already know how it works, they already know how the PMS works, they already know how the OTAs work, they already know how to interpret the price labs data. So, like for me, it's a no-brainer. But also, I have people in my company who are like, we shouldn't be paying people to just set our prices. Like, we're just giving away two and a half percent for no reason.

SPEAKER_03 56:10

Yeah, I mean, it it also, you know, you've got how many units do you have?

Connor Schwab 56:14

We have 12 at the outposts, and we have 33 year-round units at Ponderosa and 12 seasonal units. Yeah.

SPEAKER_02 56:20

See, we just have six units. So, I mean, sure, we for sure it's there that'll make a lot of sense for us in the future because it is it is a man doing it manually takes a lot of time. And not to, I mean, you still need to do your input, but we just we found like someone would call and go, Well, now wait a minute, you know, uh we got a lot of phone calls about it. Like, why is the price this one day and then that the next? Or last week the price was this, and why? And can I do this? And can you make an exception? And dah, dah, and it just for it's kind of easier for us, you know. We might lose a little bit of money, it's easier for us to just sort of set, you know, we have our set little seasons based on whatever's going on, and then we of course the holidays we hand, and then I have last year's to look on. But yeah, absolutely that's something we need to add in the future.

Connor Schwab 57:11

And for you, managing now that you have Free Wild, like I would imagine you're gonna be, you know, if I take the average of our other two properties, like you might be starting to get 5,000 more viewers to your website any given month, you know, once they're up and running. And so like time to increase prices, you know, especially because you're so fully booked. And like the thing about the thing about pricing is like once people book up those units, you know, you can't retroactively go change the price on them. So like keep now that you have so much more traffic going to your website from Hidden Gem, I definitely recommend keeping a very close eye on pricing because your your calendar will book up. And I definitely recommend increasing pricing before, you know, as it's scaling. Otherwise, you know, all of a sudden you're gonna be like, hey, I'm 90% occupied the next six months and we can't really make any more money than we've already made.

SPEAKER_02 58:07

Exactly. And that's just what I've spent the last day literally yesterday doing that, like going through.

Connor Schwab 58:15

Yeah. How

Occupancy ADR Reviews And Local PR

Connor Schwab 58:16

was like ADR and occupancy in your first year? And what are you targeting for the next 12 months? And also how I know we had a lot of discussions about it regarding the feasibility study, and like how did it align with what was projected in the feasible, you know, Sage's feasibility study?

SPEAKER_02 58:31

Yeah, I think it aligned really well. I think our occupancy has been probably better than what we projected for the first year, and then our ADR maybe a little bit less. But right now, you know, we're you know, we're like a 75% for the remainder well through through November. So, you know, it's hard, you know, because what's left are really just kind of like a day here, a day there. You know, they're most we we have a two-night minimum. So there's a lot of orphan nights that are just kind of stuck out there that we will, we will if there's an orphan night, we allow that to be booked, but it gets uh it gets tougher. And then as far as ADR, you know, we're kind of you know, right now we're for weekdays, we're like at 400 and something. We're kind of in the 400, you know, hell yeah. ADR.

Connor Schwab 59:25

Is that for both units average or for that for the trees?

SPEAKER_02 59:28

Then the weekends, you know, we're in 500. So we're moving, moving up there. In fact, I just doing the pricing for next year for the first time. I think it was like for Valentine's or maybe a spring break or whatever. I actually moved one of the units, the larger units, into the 600s. So yeah. And we're getting one of the great numbers that we're super proud of is we have a pretty high return rate. Like we have guests that book again when they leave. Wow. So I think it's like 10 to 15 percent. It's hard to, I was trying to figure that number out the other day, but I just we know tons of people book with that's amazing before they leave or when they leave right after they leave.

Connor Schwab 1:00:12

And I was looking at your Google reviews, and I think you have 5.0 out of like 180 Google reviews or something like that. It's a perfect score, which is very hard to do. So congrats on that.

SPEAKER_03 1:00:26

Yeah, knock on wood.

SPEAKER_04 1:00:29

Yeah.

SPEAKER_02 1:00:32

Yeah, so that that would be a big piece of advice, is you know, is that's really important. So I don't care, you know, you've got to deliver the absolute best hospitality. Go, go, just you've got to knock it out of the park from the very beginning in terms of the hospitality and the attention to detail, because it comes back in the reviews. Don't overpromise, you know, underpromise, undermarket what you've got there. And then when they arrive, they're like, Whoa, this is way more beautiful than what I saw, or the unit is a lot larger, you know, and that comes back in spades with the Google reviews. That's really important. Most of our bookings people find us either from Google, Google, or from Facebook. Those are the two number ones. Oh, and PR. So PR, I don't know if this would be a piece of advice. This has really helped us a lot. Our the county that we're in has a tourism board, a tourism, you know, that's we pay an occupancy tax and it goes to this tourism, and they hire a PR person, and that PR person goes out on our behalf and will introduce us and bring writers of you know magazines or bloggers, or that has helped been huge.

Connor Schwab 1:01:52

Is it a local person or do they work nationally?

SPEAKER_02 1:01:55

The PR person that they contract with is he's kind of local.

Connor Schwab 1:02:00

So is he through the local tourism board? He's employed by them.

SPEAKER_02 1:02:04

Yes.

Connor Schwab 1:02:04

Interesting. So do you guys pay him at all, or he just does it because he likes you?

SPEAKER_02 1:02:10

Well, he does it because that's his job. His job is to promote tourism in Henderson County through, yeah. He's a PR consultant. And the county, and you know, I just don't know if other, I mean, I know in Western North Carolina, yes, all Western North Carolina tourism is important to the economy. So I think most cities and counties have tourism boards. Tourism, they're part of the part of the local government, and they're funded through occupancy taxes that we're required to charge our guests. That's how they're funded. And they they have marketing budgets, they may have a PR person on staff, or they may hire someone, you know, for Henderson County, they actually hire a person, a PR professional. And he has the contacts with all the different, you know, magazines, bloggers, influencers, any kind of public relations. I've tried to do that myself. I've reached out, tried to reach out and cold call magazines. No, they do not. It's zero success.

Connor Schwab 1:03:17

Yeah. Yeah. That you know, you taught me something because that that is the piece of marketing and advertising that I have to totally neglected is PR. I really haven't done anything. And it's it's a powerful free tool, especially, especially if you have a property that sells itself. So, like if you put that extra money into the last 10%, like we were talking about, and it's such a special property in units that like PR is such an impressive tool because people want to write about it, they want to share it, they want to consume it. So I always kind of tell a lot of people, I'm like, hey, that's like last 10% that you put into finish in your units or amenities or features around the property. Like, you could almost think about that as part of your marketing and advertising budget because that is what becomes shareable and consumable and and viral. But yeah, that's something we certainly haven't tapped enough on our side.

SPEAKER_02 1:04:10

I would yeah, I would highly recommend that you reach out to reach out to your local tourism board and and make a make contact there and see what resources they have. The PR has been huge for us, no question about it.

OTA Lessons And The True Cost Of Fees

Connor Schwab 1:04:24

Actually, what you've been using OTAs, Airbnb, booking, expedia.

SPEAKER_02 1:04:29

Oh, so we have been, we signed up initially with Airbnb, the typical ones, Expedia, Book, Google, Booking.com. And so we're just in the middle of nowhere. We're not here, you know, we're we we don't show up if somebody's looking on Airbnb in the Asheville area, we don't really pop up. If somebody's looking, we're just we're between Asheville, Brevard, Greenville, South Carolina, Flat Rocks, look. So we just don't, so we've you know, we've not had many bookings on Airbnb. So we don't have an OTA problem. That's you know, good that we're thankful for that. We have very, very few bookings. So we still I just got rid of all of them except for Airbnb and Google, you know, that's just an easy one and booking.com. There's but we had a bad experience with Expedia where they had built in, you know, some like in the agreement and in the fine print, and I didn't see it, you know, some promotions and some kickbacks to travel agents that was in there, I didn't realize it. And so we had some rooms that were booked with significant discounts. So we just we uh we're done with the yeah.

Connor Schwab 1:05:44

I think I like the way that you're doing it. I think if I was in your shoes where you only have six units, like if I was gonna be spending money on one thing only and paying, because like you know, hidden gem a big portion of that cost is the monthly management fee, and then you know. You're scaling ads. But like with six units, you know, there's only so much revenue to spread across any any cost, you know, and marketing and advertising being one of them. So I think you're doing it right where your product is so unique and consumable that I think it will do best on social media and lean into that and just build the direct bookings. And yeah, I think you can just bypass OTAs entirely and then really just be using social media. So yeah, and and PR, I think is I think you, I think you're on the right. I would do exactly what you're doing.

SPEAKER_02 1:06:35

Yeah. That's one problem. I'm glad we don't have to.

Connor Schwab 1:06:39

And there's one, there's so to share with the audience, I've been thinking so much about this because Outpost basically, we were, you know, we have 12 units. We were able to stabilize the property super quickly, basically thanks to booking.com. You know, we went from 10% occupancy to 75% occupancy in our third month. It was before I was even in charge. And that was almost entirely due to like booking.com and and the other OTAs as well. And I was like, wow, this is amazing. Like we stabilized in three months or nine months and as opposed to two, which is usually how we would underwrite it at Sage. But the but the cost, one, you're paying 17% of your booking fee. And then two, it's an operational and communication nightmare with the guests. And then also, yeah, and then you can't upsell, and it's just it's just a real, real pain across the board. So like I looked at we basically paid 40 grand in OTA fees in 2026. So I so I was just like, okay, this I was like, we're paying 40 grand to make our lives harder operationally and like with guest communication and guest experience. So I was like, all right, in the last 90 days, I basically initiated a big switch. I was like, we want to pay that 40 grand to hidden gem, and we want to pay that 40 grand to SEO, and we want to pay that to our Google Ads guys. And that's gonna hurt us a little bit in the short term. It's probably gonna be like a six-month period where we're probably gonna lose money, and then hopefully it should come back in a big, big way, and we're in a much, much better place. So, and one thing that's really an interesting calculation for folks, because you've got a relatively small unit count, like your property from a revenue perspective is probably super similar to the outpost, because we're 12 units, but our ADR is 200 a unit. So we're we're so far this year with no marketing and advertising. I'm guessing with no marketing and advertising, if we just kind of did business as usual, we'd probably be at least 70% occupancy and 200 ADR for the 12 units. Probably a little bit better than that, but like for easy math. And then my thing was like, okay, do we have room in our revenue to bring on hidden gem? And does this make sense? And we're also doing Google ads as well. And I was basically, all right, with this extra three to five thousand visitors that we're having to our website each month, what do we think that will do to move the needle for occupancy and ADR? So basically, my assumption is we'll go from 80 percent 70 to 80 percent occupancy in 200 ADR to 230 ADR with that extra traffic. And that's just purely revenue on top. So that increases our revenue 15 grand a month, just with that gain in performance. And then also we have you know an average of 16% that we're paying on 80% of our bookings. And my hope is that we'll go from 80% OTA bookings to 20% OTA bookings in about six months. And that saves us an extra six and a half grand per month. So basically, like looking at the net monthly gain for us for using like a hidden gem or another group, you know, that net monthly gain over the course of the year is around twelve thousand dollars. So, but I would encourage people to like do that calculation for your own property and like do that math. Because once I was really unsure of whether or not to do it. And then once I did the math, I was like, oh, this is an extremely obvious choice. Like, yeah.

SPEAKER_02 1:10:11

It it really does. And not only that, when you you know, hidden gym, they're running all of the the tests, like they'll do a number of different reels and carousels and whatever, and they'll target different markets and test all of those, and they see what works, and then then they can more specifically target your your market. And for us, that's what we want. What we want, we want our, you know, our guest is a slight, you know, someone who's got, you know, I don't want to say affluent, but you know, they've they've they've got some money budgeted for holidays, and they are very nature appreciative. That's our we want someone who they've one of the spots, one of them has camped before or they love the outdoors, or they but we we want that sector, and they they've found it for us. I mean, we can see, I can see we have more people coming in now who are our perfect guest. They've got some appreciation for the outdoors, whether yeah, whatever it is. So to me, that's it's worth it.

Connor Schwab 1:11:21

Yep, yeah. We're for outpost, we're paying. I'd calculated it with SEO, with revenue management, with Google Ad Spend, and with social media ads, we're paying almost ten thousand dollars a month. Well, sorry, it's probably like seven right now, and in six months, it'll probably be like close to ten grand. And then maybe after that we'll kind of we'll walk it back because we'll have we'll kind of have more critical mass. But that was a big and then Ponderosa, which is a much larger property, it'll probably be you know, close to like 25-30% more. But anyways, enough about that. So looking forward, I guess, what or maybe an anything else, any other interesting lessons from like your first year of operating or like the last six months, like any other interesting lessons learned that you'd like to pass off or you'd you'd tell yourself to, you know, go back in time and tell yourself?

SPEAKER_02 1:12:17

Um

Mentors Books And Travel Insurance Policies

SPEAKER_02 1:12:18

well, I mean, I would just say like one of the things that did help us was we I did, I did partner, I hired kind of as a quote consultant, an existing operator, someone who uses tense similar to ours, who is in a completely different market, so there's no competition. And he was very, very, very helpful. So I would highly recommend that. Just pick someone that is not in your market and that's a couple years down, you know, ahead of you, and ask them if you can have once a week or once every other week an hour session, and you pay whatever, you know, you agree on something. It it is so worth it. I mean, if nothing else, he was like my, you know, I could just call and like unload, you know, like, oh my god, you're not gonna believe it's like my you know, therapist, but no, hugely helpful. So I would I found that particularly because I'm by myself. Yeah, you know, I would highly recommend that you go and listen to every single podcast. I've listened to all of your podcasts for outdoor hospitality, many of them twice. Now, some of them I'll skip, like if it's RV or something that's not completely applicable, but I have listened to them many times, you know, like especially some of my you know favorite ones, like Sarah Dusick, or you know, I mean, I have her book, I've read it multiple times. I've got it like I have it here. Actually, it was just gonna shoot. Yeah, okay. Like it is like so marked up. I mean, it's like I mean, I just have it's it's my Bible. Um you should invite her to come stay at your property. I know I should. I well actually, I want to go see her place in South Africa. She's working on her new one. Yeah. So yeah, I would get her book. I would get Unreasonable Hospitality. I would get another favorite book, too, is is called Finding Freedom. It's by Erin French, and she's the founder of The Lost Kitchen, which is we haven't been we have meal kits. We do have a lot of food. We don't cook anything, we don't have a restaurant, but we do have a whole food and beverage. We have a bar and a full meal kit situation for our guests, breakfast and dinners available. But she's it's a restaurant and it's called The Lost Kitchen, and it's in Maine. And if I'm gonna send this podcast to her, because I to get a reservation there, you send in a postcard in the spring and they draw them out of the hat. And I've sent one in every year for like the past five years, and so I haven't find one invitation to go. So, but just her, her what she's done and her focus on hospitality and just a quality, quality, exceptional experiences is a great book to read. Yeah, I'm trying to think what else in terms of, you know, I mentioned the a local tourism PR person. Another more detailed thing that we just added was you should we're gonna we just added travel insurance. We don't, I just put a I put it at the top of our booking things. Like when they get their confirmation, it's kind of right at the very top, which is we are a small property, every unit is critical and special to us, and we absolutely cannot take any cancellations for any reason within the two-week period of no cancellations. And I then I recommended just I mean, just pick one. Don't pick a you know, I I picked a broker, they're a brokerage, so square mouth, that's one, for example, whereas you easy you go on, you punch it in, and then they spit out, you know, 20 different policies, 20 different providers with different costs, and just so I put that in huge capital letters and just said, we cannot recommend strongly, strongly, strongly recommend you do this.

Connor Schwab 1:16:06

Yeah, it's not that's so that would be another one. Super smart. I hadn't, you know, I haven't talked about that on this show, and because oh, I hate that getting those phone calls.

SPEAKER_02 1:16:15

Oh, my kids sick, yeah. Your kid's sick, or my parent died, or what you know, like God, it's like the it's horrible. Your heart breaks or whatever it might be, but yeah, yeah, I that's genius.

Connor Schwab 1:16:28

And and like the airlines really figured that one out because they obviously give everyone the option to to get travel insurance, and then when you're going through the checkout process, you're like, Oh, I have this choice to get travel insurance. And if you're me, I never get it. But I'm always like, and then the airlines you call them and you're like, Hey, I can't make this flight. Can I move it or get a refund? They're like, Yeah, sure. Did you pay for travel insurance? Like, you obviously had the choice. You knew you had the option, but you didn't do it. So, like, it puts the onus on the customer to make that choice, and then it and then it alleviates you of some of that like burden or expectation from guests. Do you make any money off the insurance?

SPEAKER_02 1:17:08

Or no, we just do, I just stuck it up. Yeah, I don't want to be involved in that at all. I mean, may I did think about when I put SquareMouth on there, I'm like, I should just, you know, I should call them right now and go, I'm getting ready to put this on my maybe I will eventually, but I mean, you know, they're huge and we're six units. They're not gonna, but I the main thing is I just don't want to get those phone calls from people, you know. Uh and and they're all it's always either a kid sick or a parents sick or problem. That's that's usually what it is, or or they're sick. So so just get the travel insurance. It's so cheap, it's just not expensive at all. I don't, you know, I've I always when my kids were little and my parents were elderly, I always got travel insurance and it was so inexpensive. It's just a no-brainer.

Connor Schwab 1:17:55

I'd be so interesting to like you know, run your your your travel insurances in-house. Like there's no third-party provider, and it's just like, hey, your customer can choose to pay five to ten percent more. And then if they decide to cancel and they have the insurance, then you just give them the refund. But then you're you're actually like I mean, obviously it's a profitable business if all these companies are offering it because they wouldn't offer it if it wasn't a profitable business.

SPEAKER_02 1:18:20

That's a great idea. Just our self, our self-travel insurance. That's yeah, that's a thought. Yeah, maybe, maybe I should do that. Um I love self insurance. So thank you, Connor.

Connor Schwab 1:18:31

Yes.

Final Takeaways And Goodbye

Connor Schwab 1:18:32

All right, Lark, thank you so much. Really appreciate your time. Um, thanks for tuning in, everybody.