Glamping for Profit: Low Cost, High Cash Flow, Massive Upside | Zac Willms E25

What if you could double your money in one season with glamping tents? Zac Willms is pulling it off — and building a profitable outdoor brand in the process.

In this episode, Mike and Nate talk with Zac Willms, co-owner of a thriving glamping resort in Tobermory, Ontario. Zac shares how he turned a neglected trailer park into a profitable outdoor hospitality destination, the simple formula behind his success, and why buying an old campground might be the real cheat code.

We unpack everything from startup costs, seasonal cash flow, and staffing — to marketing strategy, zoning hacks, and influencer partnerships that built a 70% direct booking rate.

If you’re looking to create high-margin hospitality experiences without the complexity of hotel development, this one’s for you.

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Linkedin: Zac Willms

Website: Grotto Getaway

Instagram: @zacwillms

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Transcript

Michael Russell 0:00

What if I told you the fastest path to six figures in hospitality isn't building a boutique hotel? It's pitching a tent. In today's episode of the Hotel Investor Playbook, we're discussing glamping with Zach Wilms, a guy who turned a rundown trailer park in Ontario into a glamping cash machine. Zach walks us through how he bought the land, scaled it, and got paid by the bank to do it. We're talking actual numbers, how he earns double his investment in a season, and why glamping might be one of the most underrated opportunities in hospitality right now. If you've ever thought about owning a campground, launching a glamping site, or want to create a memorable hospitality experience without a massive build-out, you'll want to take notes. Let's dive in. Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership, hosted by Mike and Nate. Get in the game, welcome to the Hotel Investor Playbook. We're Mike and Nate, founders of Malama Capital, and your hosts. On this podcast, we talk story with industry experts and professionals about everything you need to know to make money investing in hotels and hospitality assets. On today's episode, we have Zach Wilms. Zach, welcome to the show. Thanks, guys. Appreciate you having me here and looking forward to it. Yeah, we're pumped. So we want to know how to make money in hospitality. And so you are a successful glamping operator. We'd like to know: is there money to be made in glamping?

Zac Willms 1:42

Tell us. Guys, easy answer. Yes. I'm a numbers person. I'm a logical person. I'll put it to you this way: a glamping tent, decks, furniture fully built out, costs us about twelve thousand dollars. In one season, most of our tents are doing $25,000 to $27,000. So you tell me if there's if there's money in glamping.

Michael Russell 2:02

Sounds like it. Where do you have your clamping site?

Zac Willms 2:06

Yeah. So we own a glamping resort up in Tobomori, Ontario, Canada. It's about three hours north of Toronto. It's this really picturesque spot where it's got turquoise blue water, it's got national parks. So there's good hiking, there's scuba diving, there's boat trips, there's islands that you can go to. Some people call it the Caribbean of Canada. It's a super picturesque spot for people to come check out.

Michael Russell 2:28

Okay, cool. So there's some reasons why people would go there. What does it cost per night to stay in one of these tents that you have?

Zac Willms 2:34

Yeah, so the average tent on a nightly rate is about $175 Canadian, plus about a cleaning fee of $75. So still very affordable compared to most options out there.

Nathan St Cyr 2:47

What makes it glamping versus a tent setup? Like what's what's the distinguishing factors that actually make it glamping?

Zac Willms 2:57

My thing is what makes it glamorous camping to me is the fact that you live in a condo with your partner and you can come up to Tobamori with really bringing nothing else other than the clothes that you have to wear. And you can show up to this site. We're gonna unzip the tent for you. Your bed's there, we have towels there, there's washrooms there, we have all your soaps, your shampoos, everything you basically would get in a hotel you'll have in one of these tents, comfortable luxury mattresses, ready to sleep without having to do any of the hard work about setting up a tent, air mattresses, sleeping bags, pillows, all the regular stuff that I grew up with camping. It's really just a done-for-you solution. Where do you poo? We got public washrooms on site, all still private stalls, but they're public washrooms that people use and people love them.

Nathan St Cyr 3:44

So there's basically community bathrooms. Are there multiple different places throughout, or is there one central place that someone goes?

Zac Willms 3:52

We have two central spots, and that's really services all of our bell tents, kind of like the clamping tents, but we also have like air streams, unique renovated trailers. Some of those have their own private washrooms inside the actual trailer. So some people can say that's a little bit higher end glamping. Now we can break it down to tiers of glamping where are you light clamping, medium glamping, high-end clamping? There's a whole world of glamping and different levels of it.

Nathan St Cyr 4:17

All right. So if I go and I choose one of the tents on the deck, am I gonna see other people?

Zac Willms 4:23

You will, yeah. So it's still imagine like your regular campground where there's gonna be enough space between sites that you're not gonna be on top of somebody, you're not gonna be hearing their conversation when they wake up in the morning, but it still has that campground feel to it that everybody's still saying on the same site. There's still sites set up, so it's like site one, site two, site three, site four are all gonna be on like a row together.

Nathan St Cyr 4:45

All right, because when I think about going camping, I'm thinking a little bit secluded and I'm going out there to enjoy the nature. Am I like hearing other people at night?

Zac Willms 4:56

At night you shouldn't be hearing anybody, but you also got to remember our average clientele is coming from the big city where they're living with nine, $10 million people in condos with cars outside their door and sirens going off at night. So to them, hearing, I think, a little whisper at night from somebody else on the campfire over to them is still a super peaceful and enjoyable experience because just coming where they're coming from to what we what we have up there.

Nathan St Cyr 5:20

Got it. And obviously, we come from a very community-centric hospitality asset class. Are people, when they're going there, are there opportunities for them to gather around group campfires or are they really going to try to separate?

Zac Willms 5:35

I'd say there's two separate groups of people. There is some people that are going up there, and we'll see it on the messaging when they're booking. They're like, what's the most private site? What's the most secluded site? Like, we're just looking for a romantic getaway. And we have some sites that I would say are more secluded than others, but there also is people where we have a community barbecue, where we have disc golf, and they're playing the games. We have beach volleyball, they're playing the games and they're hanging out with other people that come up to the site and really kind of building off that community aspect. But that's going right into kind of what we're doing next with our amenity package, like bringing in a pool, bringing in the hot tub, sauna, cold tub experience. That really just builds kind of on that community experience and bringing everybody together, having people do the hot, cold experiences together, and maybe even starting to get a couple different guided sessions with that too. How long through the year do you offer this product? Yeah, so we're still seasonal. So we're basically like early May to mid-October. The next part of our transition is kind of getting a couple high-end clamping units that are for season, built for kind of colder weather in Canada, and ready to really work on those shoulder seasons. Because right now, the bell tents, if you run those into November, it gets cold up there. It's it's not going to be that enjoyable of an experience.

Nathan St Cyr 6:47

Okay, so you get all this revenue and then faucet turns off. Exactly. What's that like? How do you survive that?

Zac Willms 6:55

In the in the winter season, we call it a lot of planning for the next season. We build up so much cash, honestly, during our summer season that we really are good for the entire winter. Really, what happens after Christmas is in January we open up our bookings again. And any direct bookings that book for the summer, that book for any of the other times, that revenue starts coming into our bank account right away. So I'd say there's really only about a two-month gap where there's no revenue coming in. And then as soon as January kicks off, our marketing kicks off again, we start running some promotions, and then some money starts trickling into the account all the way up into the season. I want to know how did you choose this location? So, what makes it ideal for a glamping project? Yeah, really location, location. Obviously, we say that in real estate all the time, but I think even more so on the hospitality side because there is other glamping in Ontario. Some of them have different features that I'm jealous of, but really the location that we have is just in the perfect spot where we have a super popular tourist destination about 10 minutes away from us, which is Tobomori. It has really cool shipwrecks, and you can do these like glass bottom boat tours, see the shipwrecks, scuba dive the shipwrecks, snorkel the shipwrecks, and have this whole experience in this town. We also have two national parks that are very close to us that also have very, very good hiking, camping, outlook points, swimming points, and those book up so fast in the summer. Like you got to book that now or in the next month or two if you want to actually get a time that you're allowed to go hike those areas just because of how popular they are. So I think being in the location that we are, we're about 10 minutes from these three really driving tourist factors that I truly believe for the first two years, people were coming to our area, knowing that they want to go to our area and then finding us. And I think it wasn't until the third season people found us, and it just so happened to be that it was in that area, and they're like, Great, that's a bonus. We wanted to go to that area anyways. But I think for the first two seasons, as we're really building up our brand, people were like, let's go to this area and then start looking for accommodations, right? Like a lot of people do, and then they end up finding us because they're like, oh, this is unique, this is cool. There's really only like motels and like old trailer parks up there right now that we're competing with. So there really wasn't that much to compete with. And I think we were found that way, and then that kind of helped us. We got a couple different blog posts in some of the big cities. We got a couple good marketing campaigns out there, and I think season three is when we really started to notice that people were coming for us and not so much just coming for the area. So location matters beyond people's wildest dreams.

Nathan St Cyr 9:31

No, I love that. And how did you find this special piece of land?

Zac Willms 9:35

Yeah, so it was actually just sitting on MLS as a kind of run-down trailer park that my business partner kind of brought to me and said, Zach, I think this is a great opportunity. This trailer park is right on the main highway. It's close to everything. Their numbers are bad, like they haven't really been running it optimally. And there seems like there's a huge opportunity for this to grow. They're only using about 12 acres out of the 90 acres that they have uh to actually expand onto. And we looked at it, we started talking to the seller. Obviously, some of these sellers that have owned these properties for 30, 40 years, it's all chicken scratch numbers. There was some seasonal camping, there was some nightly camping, there were some parties happening there on long weekends. And we just looked at it and said, if we put up a couple bell tents, we put up a couple good trailers, how much on a nightly rate do we think we can get? And there was no comparables really to look at. So we basically just said, what is a campground site go for and what does a hotel go for? And figured we have to be somewhere in the middle of that. We can't be at a hotel rate, and we're definitely higher than a campground rate, and worked based off a model like that, put the property under contract, ended up getting it appraised at about a million dollars more than what we got under contract for. So our appraiser looked at it, saw our business plan, and really saw the value in the land and value in the business model that we put together compared to what we originally purchased it for. So that was a big help and a big kickstart into the glamping business for us.

Nathan St Cyr 11:00

Zach, I I I love this story and your vision. Mike put uh on our first run at our website, the little tagline was turning potential into profit. And hostels weren't even on our radar. But like you, right? We saw this unique opportunity and and what most people don't do, they don't have the freaking courage to take that thought and and actually take action and and do it. That's just absolute frickin' gold, what you just described. I appreciate that.

Michael Russell 11:34

Can you tell us about the infrastructure that was required required to be able to convert what it was into what it is now?

Zac Willms 11:42

Very minimal, to be honest. Like that was part of the draw to our to this site was that they already had the bathroom set up, and the bathroom was the best part about the entire site. So the public washroom that they had on site with showers and private stalls, that already looked great. Everything else was kind of run down, but that was kind of like the shining star. And it's like right at the back of the park, right in the middle, kind of like a common area for everybody to use. The front office space that they had that they worked out of also looked great as soon as you walked up. So they had a couple key points that were like we could use that, we can play off that. They had all the seasonal camping was on the top row that already had full water hookups, full hydro hookups, every service that you need hooked up. And we thought, great, if we can just get these seasonal trailers out, because they're only spending $2,000 a year to be up here, we're gonna be renting these out for $200 a night. Quick math, obviously, we can make this work if we get them out. Up there, seasonal contracts are very easy to cancel. Part of our agreement with the old owner was that they had to cancel all the contracts for the next upcoming season. So when we bought the property, there was no more contracts on site. And really, all the heavy lifting in terms of like servicing the sites, getting everything we need to the sites was already done. And that's something I talk about when people ask me if they want to get into clamping, how should they do it? And there's two different ways you could do it. You could either do it the way that we did it, buy a campground that already has the services, has the infrastructure, and basically just rip out what was there and put in what you want there, or you can go down like the land development route where you're buying this raw piece of land, you're gonna take it through a rezoning, and then you have to put in all the infrastructure. Two different ways of doing it, neither way is wrong. We just decided to go with the way that all the infrastructure was already there for us.

Michael Russell 13:22

Hey guys, quick break from the episode. Look, we're always looking to bring you the best content here on the hotel investor playbook. And honestly, we'd love to hear from you. We want to know what you want to learn about. Is there a topic you're dying to hear us dive into? Or maybe you know someone who'd be an awesome guest, someone with a great story, unique expertise, or insights that would bring value to all of us in the hotel investing game. Shoot us an email at info at hotelinvestorplaybook.com. That's info at hotelinvestorplaybook.com and let us know. We read every single message, and honestly, it would make our day to hear from you. Your feedback helps us make this podcast better and more relevant for you. So don't be shy, reach out and help shape the next episodes. All right, back to the show.

Nathan St Cyr 14:09

What is this specific zoning of your your glamping resort?

Zac Willms 14:15

Yeah, that's honestly one of the biggest things we have going for us is our zoning, right? Like that, you can't even put a dollar figure on it because the city has designated this as a tourist commercial zoned property. So when they bring in regulation and they bring in tax, a lot of times tourist zoning is actually excluded from those regulations. It's very hard for them to come in and tell us to stop doing what we're doing. It's very easy for them to go tell a single cottage owner, hey, we don't want you doing Airbnb anymore, or we're not going to give you the license, or we're not going to give you this. But it's extremely difficult for them to come and tell us, hey, you can't rent out on Airbnb to tourists when our zoning literally says it right in plain black and white writing. So that's a big factor when looking at these types of sites.

Nathan St Cyr 15:01

Okay. And then to go to the second question, because you said there's two ways that you really look at going about making this purchase. There's go buy the land, go through the zoning and the entitlement process, which I'm is time consuming and can be have risk attached to it, or you go buy the existing campground. And that's what I'm really curious about because a lot of times for us, we let we're like, okay, well, what's the path of least resistance? And if the path of least resistance is purchasing a campground that is already zoned for camping, are those are there opportunities out there where where these campgrounds are available to purchase?

Zac Willms 15:41

There definitely is. And the easier part about doing that is you sometimes can get bank financing on it on day one, right? Instead of going down the development route where you're getting land financing and way harder terms, we were able to get bank financing after one year of operations because we already had a business that we bought and it was a business tied back by real estate. So once we had one year under the books, we could show our revenue, we could show our business plan. We actually got a lending bank financing in our right after our first year of tax season.

Michael Russell 16:11

Look, I don't think there is really two options there. I mean, any anyone looking at this opportunity, it did it's pretty obvious that the risk involved with developing and going through zoning and having to lay all the utilities, power, water, septic roads, who knows, right? Like that just seems like a ridiculously tough uphill battle. If you could just go buy a campground and say, all right, this thing's not being operated very effectively, and we have very little like like cost we have to invest in in terms of like the structure. I mean, these are tents, you said bell tents. This just seems like an obvious choice. Just go buy a campground. No, go develop it. That seems crazy.

Nathan St Cyr 16:47

It seems like an obvious choice, but I mean, the people that I get brought all the time their vision and what they're doing, and it's all about land development. They're out there searching for the right piece of land to do XYZ on, whether it's glamping or microzort or whatever. But man, I feel like we just found the hack, baby.

Zac Willms 17:09

Yeah, I hear people say it all the time to me too. They're like, Yeah, I'm looking for this piece of land on this cliff, and I'm like, yeah, you could do it, but the risk and everything else involved. But one other thing I'll mention there too is we kept camping for the first three seasons, two and a half seasons, because it was just a piece of grass and it was a pad that was already there. So we expanded the lamping onto it, but we still kept some of the camping because it was still producing revenue for us. It's still extremely easy to manage. All it takes is some easy landscaping, customer service when they come on site. You show them exactly where their trailer is going to be parked or where their tent's gonna be set up. And it wasn't until two and a half years in that we finally cut the camping because our clamping revenue was doing so well. And then there's the camping people and the clamping people weren't mixing exactly the way we wanted to. People going up there camping with their own tents for $50 a night. It's a different mindset than the people coming up there for a nice peaceful environment at $200 a night.

Michael Russell 18:04

All right. Well, let's talk about how you structure staffing and operations, right? How who's there on site and how do you manage the personnel?

Zac Willms 18:14

Yeah. So we have two on-site managers right now that we've had since the first season. They came from the campground world, so they've always managed campgrounds, but they had never managed a glamping resort. So this was their kind of first foray into the glamping resort, but they were very well versed and had extreme customer service. Like if you come on their site and you're renting one of our tents, when you leave, they still remember your name, they remember where you're from, they remember that little story and that little conversation you guys had when you first checked in. So they've been amazing for us this entire time. We'll usually have a team of local cleaners. Usually we're running about four to five part-time local cleaners all the time for our glamping resorts, especially now that we're up to 30. We definitely need that amount of staff. We're doing laundry on site, they're doing little cleanups around the site. If somebody's leaving garbage on the site, so it's not even just in the tents, it's around the tents. Um, they're making sure nothing's left behind and just making sure it looks presentable for the next guest. And then the last two seasons, we've also had two assistant managers to help out our full-time managers on site. Those two also live on site. So the managers always all live on site. The cleaners are the ones who are part-time and they're usually coming from the local area and able to help out.

Michael Russell 19:26

Where do they live? I mean, it's a campground. Do they live in a tent? Who? You said the other managers that live on site.

Zac Willms 19:33

No, the manager, we have trailers for them. We have employee accommodations. So yeah. Trailers, yeah, with their own kitchens, bathrooms, and everything. Like mobile homes? Yeah, like mobile homes.

Nathan St Cyr 19:44

Awesome. And then who limits the w how do you know what the limit is? Like, how do you know with this campground how many of these things you can put on it? Or is there no regulation? You can just put as many on as you have infrastructure that allows it.

Zac Willms 19:58

So it's actually right in our zoning as well. So we're allowed to put 70 sites from exactly what our zoning says. Now we could probably push that a little bit, but at the current state of where we're going right now, we think 70 is an amazing amount. Where kind of to your original point, it still feels small. We're going to use the full 90 acres so it doesn't feel crowded. Still, right now, we've only used about 14 of it. So a big part of our next expansion is like graded to the forest. We want to cut trails and we want people to be clamping in these domes or in these tents, like right in the middle of the forest, where, like to your point earlier, you can't see anybody. These are super secluded. You could do a full 360 and not see another soul. Dude, I get so fired up hearing this story. Thank you, man. We're excited too. Yeah, it's been a really fun project. Out of all the real estate I've done, this one's definitely been my favorite.

Michael Russell 20:46

Yeah, I mean, it sounds pretty simple and straightforward. Like the the biggest risk with real estate is the cost outlay, how much you're putting into the project up front, and you hope, well, if I invest X amount of money that this is going to generate enough to return whatever that initial cost was. But I don't imagine that the cost for the land was too exorbitant. But what you're describing here with $175 a night to $200 and something dollars per night, it seems like this is kind of a no-brainer. So why doesn't everybody do this? Like what are some of the pitfalls or hiccups or challenges that you've encountered in operating this that would prevent someone from doing this themselves?

Zac Willms 21:24

Yeah, I would say probably the first part of it is just taking that big risk, like not having comparables. A lot of people I talk to in real estate, they want to know all the answers up front, right? They want to know exactly what their ADRs are, what their occupancy is. They want to know how everything's gonna work. And really, it's not like that. It's not black and white by any stretch of the matter. I mean, some of these tents can get damaged, you got to replace a tent, weather comes in, like we had a bunch of snowfall too, and a bunch of rain last season. So, like that affects your season. Mother nature plays a huge role into our occupancy, right? Like if you know there's a massive storm coming up for a weekend, I'll get 10 messages from people saying, What's your cancellation policy? Can I switch my weekends? Can I move it from this Friday to next Friday? Just because they know a big storm's rolling in. So I think that's some of the pitfalls is you're outdoors and there's a lot of things that are just not in your control. But I don't know why more people don't do it other than that. Yeah, just having the courage to take a big risk.

Nathan St Cyr 22:20

But Zach, now that you know that, okay, because all of the things that you just presented, these variables, they're variables that they may have some level of consistency, right? Like, okay, well, if we run this thing for five years each season, there's probably going to be three temperamental weather situations, there's probably going to be seven tents destroyed. There's probably gonna, I assume as you gain experience, now you can actually start to plan and budget. So when you look at the next piece of property or the next project or expansion, that now you actually are creating your own template of what what it's gonna take. For sure. For sure.

Zac Willms 23:00

Well, can you tell us what did you pay for this land or this this campground? Yeah, so we paid $1.5 million for it. It's about 90 acres.

Michael Russell 23:08

I mean, that's a good amount of money. Well, one and a half million dollars for a campground seems like a lot. And you said each one of these campground locations, I guess tents or whatever you call it, 25 grand, right?

Zac Willms 23:21

Yeah, because we're we have some tents, we have some trailers, we have an airstream, we have a bus, and we have a couple like small little gazebo cabin looking ones as well, too.

Michael Russell 23:31

So you got let's call it 25 grand on average, and you've got how many of them total?

Zac Willms 23:36

30.

Michael Russell 23:37

So you're doing 750,000 of gross revenue per year, and then what is your expense ratio?

Zac Willms 23:45

Yeah, our expense ratio is right around like 60, call it 60, 65 percent right now, and that's something we've been working on a lot, and there's a lot of efficiencies that we're gonna be bringing into this season that we've started to notice from some of them from our competitors, to be honest. One of the best pieces of advice I could give anybody listening to this podcast is that if you really want to get better, go stay at your competitors' places because you'll learn something every single time. Like we stayed at one of our competitors' places, and we're like, wow, that's how you guys are giving out firewood. That's a genius concept. We should just run it like a mini bar. Why are we using man hours and staff to try to deliver hand deliver firewood to each site when somebody wants it? Right. And sometimes you want it after 10 o'clock at night and our staff are sleeping. But now we're gonna be moving into more of the mini bar style where we'll have a couple bundles of firewood on your site. You use it, you pay for it. You don't have to come see us.

Nathan St Cyr 24:40

There's yeah. If we go back to the financials, as I'm just kind of ripping through it here, you said that you got bank financing, but what do they provide you with as far as like a a cap rate in a situation like this? Because there's probably very, very little comparables out there. And then how much lending are they willing to do against even though you have a proven record like this? Because I would imagine that there's although they lent, that there's there's some challenges.

Zac Willms 25:10

Yeah, for sure. So they're not gonna go up to like the full 80% loan to value. So they gave us 68% loan to value. That's really good. That's fantastic, bro. That's freaking we were super happy with it. Like, I like I'm smiling here because yeah, we had a great time and the the bank really believes in us and sees the vision of what we're trying to do here. So, yeah, they gave us up to 68% loan to value. The cap rate I believe they used was comparing us to other hotels because they really said it's hard to compare you to a campground when you're running it more like a hotel because our cleaning costs are much higher than a campground would be. We have merchant fees, we have property management software fees, so we're running it a lot more like a hotel. So they gave us about a 9% cap rate on our value. Wow. That's still pretty good.

Michael Russell 25:55

But I ran the numbers on what you shared. So you're doing just over a quarter million dollars a year in profit on a one and a half million dollar investment in the property, and then you had to you had to purchase some additional stuff, right? Supplies, all these tents and everything that you bought. But what was your all-in cost then once you've purchased all of the additional stuff?

Zac Willms 26:15

Yeah, it's it's so hard to say because it's been over the seasons, right? Like it wasn't all at once because the first season it was like, great, let's get two tents up. Wow, they sold out right away. Great, let's get another four, and then let's get a couple trailers. And then we were on Facebook Marketplace just looking for like cool, unique trailers that people have kind of renovated and got a good theme going, and we would pick some of those up. So it's difficult, but I mean, if you say each tent is about 12, you know, that's about 120,000. The trailers are at least going to be about 15, $20,000 each. So there's probably another $150,000, $175,000. And then the gazebos we just renovated. So those were very minimal, just some paint, some furnishing, and that type of thing.

Nathan St Cyr 26:58

So you you might be $2 million all in, but you've created a valuation of $3 million to the bank.

Zac Willms 27:04

Yeah, $3 million to the bank. And I think if we reappraised it right now, we'd probably be closer to 3.5, $3.6 in that kind of ballpark.

Michael Russell 27:12

Well, quarter million divided by two million is about a 13% cash on cash if you were just you didn't have a loan, right? Yeah. But you put down 32%. So 32% of let's call it two million, or is it one and a half, I guess. So basically, let's just say that you're all in cost, like your hard cost was was around 68% times 1.5 million, is about a million dollar loan from the bank.

Zac Willms 27:46

So that was the part that I gazed over. We bought it for 1.5, got it reappraised for 2.5, and got the mortgage actually on the 2.5 right from the beginning. So we got paid basically to buy this deal.

Michael Russell 28:01

Holy okay, that's a big detail. What I'm trying to figure out, what I'm trying to drill down to is like, okay, what are your out-of-pocket costs? And then what are you making? And so basically, you have an infinite return on your money because you bought it, you refinanced it, you got your money out, but I can't quite figure out a return on investment then because it sounds like you're just you're you're net positive, you've gotten your money back, and now you're just infinitely profitable.

Zac Willms 28:29

Yeah. It's been it's been a good deal, it's been a fun ride to say the least.

Michael Russell 28:34

Yeah, yeah. No, that's that I mean, okay. So let's just say you're positioning this to an investor, and you've got this case study here where you can say, look, this is what we've done. What what numbers are you using if an investor wanted to invest with you? What would you say like their presumed return on investment? And this is totally hypothetical. We're not necessarily going in anything specific here, so there's no like SEC complications here.

Zac Willms 29:01

I just want to know like what's the investment profile here? Yeah, so part of our expansion plans what our pitches to investors is a 10% pref return and about a 26% IRR over the next four years with a planned sale or refinance after four years. And that's pref return should be able to be paid out in year two once the big majority of our amenities and expansion happens.

Michael Russell 29:24

Yeah, I I love these like undervalued opportunities. There's a lot of glory and glamour in some of the hotels and things, which can be very profitable. But this is like this this kind of like stepchild over here that's like kind of just not really getting all the attention, but is just raking in cash. And that's kind of how we feel about what we discover with hostels.

Zac Willms 29:44

We love this. The hospitality space is just it's really starting to shine. And I don't know if you guys saw Marriott bought postcard cabins at the end of last year, which is a huge outdoor hospitality giant in America. They got about 2,400 cabins really in the outdoor hospitality space, kind of clamping, kind of some similar stuff to what we're doing. And they're kind of been mentors to us as well, just in terms of what we're doing in Canada. And I they didn't never told the number, but this is Marriott's big way of saying they see outdoor hospitality as being something for the future. And Hilton said the same thing, and a lot of the hotel chains are really starting to hone in on this on this space. So I'm excited for the next couple of years here.

Michael Russell 30:23

What advice would you give someone who wants to get started in glamping but doesn't even know like where to start?

Zac Willms 30:28

Yeah, I would kind of summarize it to some of the points we mentioned today and just say like buy an existing campground that's already producing some decent revenue. Look on how you can just add clamping as kind of a small feature to that campground to get started. Make sure the market's there. Like I said, we started with two tents and airstream and a trailer, and we sold out completely, like right away. Like there was so much action on Airbnb, Booking.com, all the OTA channels. We were like 100% occupied our first season. So once you know that the attention's there in your local market, then just look to expand it in year two, right? Add some extra tents, add some extra sites, do similar to what we're doing, get rid of the actual camping and just move full time into the clamping space. That's kind of the best advice I would say. I like slow and steady. I've seen too many people try to go too fast, too quick, and end up getting burned along the way. So we're three years in, we're going into our fourth season now, and we've just been a slow build over the whole four seasons to slowly get better, slowly improving efficiencies and operations, and continuing to build off the brand that we've created.

Nathan St Cyr 31:34

Okay, so can we go? Can we talk about the brand that you've created? Mike and I were on the phone yesterday, and we were going through your story, and I was like, Holy shit, a million views? This dude's got 27,000 followers of this freaking glamping site. Like, we're now tracking and we're starting to grow our social media for our for our house at hostels, and so this is a big focus point for us. So when I went in and saw that, I was just like, this is nuts. So can we can we dive into this? Like, how have you created so much success with your social media marketing?

Zac Willms 32:14

Yeah, I mean, this is a whole conversation to unpack. I I gotta say, first off, we hired an amazing social media marketing team right from the beginning. Like, just as we knew this was the direction that we were going, the very first thing we did was hire a social media marketing team. It just so happened that my fiance at the time runs a social media marketing agency. So it was an easy decision in terms of who we were gonna hire. And they helped us create the brand, they helped us create the vibe of what we were trying to go for. And then it was their job to really go out there, find influencers, find blog channels, find different media outlets that could showcase you know what we have. And probably the best thing we ever did was run giveaways with these different media channels, right? We ran the simple two-night free stay, like the post, comment on the post, tag your friends, make a story about it. And a couple of those videos just got traction. Everybody likes free things and everybody likes winning free nights, and it's all legitimate. They have a randomizer online, so everybody puts in their names. Somehow AI is able to put everybody's count in terms of how many times they voted, and we end up giving two free nights away for somebody. The cost of that to us is probably on paper $600. And the value that we gain from the followers, from the attention, and from everything else is just it's so hard to track that, right? It's so hard to know how much we actually gain from that, but I think it's infinite in my mind.

Nathan St Cyr 33:40

Yeah. And what's the agency cost? I know that you have a relationship, obviously, but if you if you didn't, if you were just someone that's like, look, I completely believe in this philosophy. I don't know anything about it myself, but look, we want to we want to hire a social media agency to take over the social media aspect. What is what does that cost?

Zac Willms 34:02

Yeah. So I'd say most good social media companies are going to be somewhere around $2,500 to $3,000 a month. What they include with that sometimes does vary. We have included that during our season, at least once a month, they are going up to site to film content for an entire day, sometimes an entire day plus night. So they get the night shots plus the morning shots. Sometimes that's with models, sometimes it's without models. Um, but that's once a month during our season, they're going up there to shoot content, make sure that everything we're posting on social media is fresh, it's not getting stale, and really make sure that they're up to date with all of our latest accommodations, our amenities, what's happening on site, getting them to promote all everything around us, what's there to do up in our area, and really just be on all the social media channels. So be on TikTok, be on Instagram, be on YouTube, anywhere that we have eyes coming towards us, they have to make sure that we're getting out there.

Michael Russell 34:54

So, how long did it take? I mean, we were scrolling through your Instagram page, and Ethan said, look, you got 26,000 followers. Some of these posts have done very well, one of which had over a million views, which is phenomenal. But what could someone expect if they were to hire a social media management company like you've done? How long before they'll start to see results?

Zac Willms 35:18

It's a good question. My fiance and I go back and forth on this too, because obviously she has other clients and there are those other people that approach her. And she says you really have to have the product, right? Like you can't just hire a good social media manager if you don't have the product that people like and you don't have great photos and great videos. So if you don't have the content in the product, then even if you hire the best social media manager, there's only so much they can do, right? If it's not eye-catching and gonna stop you from scrolling and actually spend time looking at that post, people are just gonna scroll right past it, no matter how good the caption is, no matter how much you know your social media manager tries to get them to stop on that post. So I think it's definitely a combination of the two of those things. Some of those videos that we have over a million views or a couple hundred thousand views, a lot of times we partnered with professional travel content creators, right? Who also have 200,000, 300,000, 600,000 followers on their end, combine them with our account that also has 20,000. And then together the algorithm just push pushes that out even to more people. We've also partnered with local tourism boards. So we have a local tourism board in our area that we've partnered with. We've partnered with like blog companies because a lot of times that they'll do giveaways. So when you start the algorithm starting to connect to all these different accounts, then connect back to you, and everybody's followers are all talking, your posts get pushed out there more and more eyes get on it. So it's just a mass amount of just getting more eyes, more attention, more people's followers looking at it all at the same time.

Michael Russell 36:47

So you've got the social media marketing company that you employ, and then there's also these influencers that you collaborate with. And so, what can one expect to pay these influencers? What do they get in exchange for posting content on their own pages?

Zac Willms 37:03

Yeah, so I'd say on the high high end, you're gonna be somewhere around $7,000 to $10,000. Most of these influencers will have different packages, they'll have their super high-end package, all in package, their medium tier package, and their low tier package.

Michael Russell 37:18

That seems like a lot of money though. Seven to ten grand. That's a thing.

Nathan St Cyr 37:21

Dude, I just smile because we had one that was six grand, and Mike was like, bro, there's something. I'm like, no, man, um, this is what like these ones with the big followers that are like have like social media managers and stuff, dude. That's the packages they present us with.

Michael Russell 37:37

It's like so is that a big part of then your your cost or your 60 something percent operating cost? Are you packing marketing into that? Or is this in addition to that marketing is a separate that's part of it, yeah.

Zac Willms 37:48

Our our marketing costs is probably our second most expensive outside of employees. Employees, like it's probably goes employees and then marketing's like not too too far behind it because we have to spend the marketing dollars because we haven't got into it yet, but just because it's very important to know as well, we're spending this money because it's driving traffic to our direct website where we're getting bookings, where we're saving on OTA fees, where we're not booking through all the different channels where our guests are getting hit with fees and we're getting hitting with fees. So last year we did about 72% of our bookings direct.

Michael Russell 38:19

Wow. Okay, this is a huge nugget right here. I just I have to emphasize this. So, what I'm what I'm digesting as you're speaking here is you've got a campground where from like it, like what it provides, like a commodity, like it's nothing that is that outlandish. It's just a place that people want to go to. But from a feeling, what you've done online with your marketing is you've created a sense of exhilaration. People are excited because of the feeling that they get when they're staying there, partly it which is embedded in your marketing, which they they get to unpackage what they see and get to to relive that. And so you have to take this big gamble. You're spending a significant amount of money investing in marketing. And so, well, how how much is it per year? What's your marketing budget per year?

Zac Willms 39:09

I think this year we're gonna be somewhere around 45,000.

Michael Russell 39:13

I mean, that's that's a good chunk of change. Yeah, you'd call it four grand a month just in marketing on average. That that's a bold move.

Nathan St Cyr 39:24

But although you're taking a bold risk in this situation, it is in your case proving to be worthwhile because I mean, 77% direct bookings is is the amount that you're saving in OTA commissions, the value that you're you're forcing as far as the value of your property in that amount is like that's a significant amount. So $750,000 of gross revenue. And if you said that the average hotel maybe is 25%, 20% direct booking. So you're getting an extra 50%, half of that revenue, $375,000 of that revenue, more than the standard. You're not paying 15% on.

Zac Willms 40:15

So that's uh and I attribute so much of that to social media, right? It's building that trust with the guests when they see you online. They're like, Yes, I trust these guys. I trust what they're going to be able to provide. So I'm going to book with them direct over going to Airbnb and these different channels because there they have a little bit more safety that's already vetted. Whereas booking on a website, you really don't know. You have to trust what you're booking. So I think the social media side of that builds on that so, so much.

Nathan St Cyr 40:40

Yeah. It's a really good point that you're that you're making here with the marketing side. And it's tough because as we dig into it, it it's Mike was just having this conversation with me the other day. He's like, man, how how do we really dig in and get the data? Like, what data points can we look for to see the impact that this is having? And and it's tough. It is really, really difficult to quantify. And I even know this because we offer a social media promotion, and somebody tries to use it on, to your point, they try to use it on Hostel World and OTA. And it's like they saw it and it gives them the link to book direct, but then they go to do their research and then they're like, oh, hostile world, I know hostile world. Okay, they're on hostile world. All right. And then they try to go and use the promotion through hostile world. So we may have gained organic growth through that, even though they tried to go through Hostel World, but we're never gonna know that. Like we just happen to because they're like, hey, this promo is not working in Hostel World. We're like, book direct, damn it.

Zac Willms 41:43

Yeah, exactly.

Michael Russell 41:44

Yeah, but I want to ask one more technical question about marketing and then we can move on. But do you do paid advertising on social media as well, or is it all organic posting?

Zac Willms 41:53

Yeah, we actually just started doing paid about halfway through last year. We went on Meta, we went on Google and found a really good company that we use that was able to get us an extremely cheap cost per click. We realized that there's very few people in our market actually paying for any type of Google or Meta ads. So the actual cost to just show up for some of this stuff is like ridiculously cheap. That we're like, we might as well throw a couple bucks towards that because we're gonna get great promotion and we're gonna get great search rankings for that. So we started doing that to the end of last year and saw some good success there as well.

Michael Russell 42:28

Yeah, I'm impressed. I really like what I see. Your your social presence online is awesome. I want to know what's next for you. What's what's in the pipeline? I know you've got another project down the road from your existing glamping location. This one's slightly different, though. It's not necessarily glamping. You're gonna have cottages. Can you walk us through what you're working on?

Zac Willms 42:46

For sure. Yeah, that's kind of the next project in the works. I mean, first one for us is like, let's get this one stabilized. We're doing this equity raise now. We're trying to add all these amenities, we're trying to increase our sites from 30 to 60. So the main, main focus right now is let's make this the absolute rock star of the portfolio. And then next, because we're doing a development down the road on this five cottage resort, we're trying to bring that up to 21 cottages. We know that's gonna be a process. We know that's gonna be probably about 12 to 18 months of just working with the city, figuring out exactly how everything's gonna work with servicing them, making sure everything gets approved. So we know that that's kind of gonna be the next project. That one's on the lake. The one we have right now, this clamping resort's not on the lake. So we like the fact that that one could offer kayaking, canoeing, paddle boarding, and all the kind of water activities that we don't get to do currently on the clamping resort.

Michael Russell 43:37

Okay, but I heard you say something along the lines of okay, five, five cottages, you're gonna turn it into 15. Is that what you said?

Zac Willms 43:44

We got five right now. We're gonna add an additional 16. So the total will be 21 when we're all said and done.

Michael Russell 43:49

Okay, that's a big investment in the structural components of this. So can you walk us through like, well, what's what's the cost to to build out these cottages?

Zac Willms 43:59

Yeah, so the actual we're gonna be going with like more like the modular style. We've got them already spec'd out. They're not not gonna be anything too big. What we've really found is we like keeping it small, kind of couples, maybe couples plus one kid, maybe couples plus two kids at the very maximum. But we're really trying to build out one bedroom cabins with pull-out couches. We don't want them to be big for parties and multiple couples coming up there. So the actual cost per square foot on them to build them out. We're running right now, I think we're around $375 a foot. And the square footage of them is about 520 square feet from the last model that we had. Okay. So they're still small, right? That's the whole idea with them is so 200 grands. Yeah, about 200, 220. I think after some landscaping, the hot tubs, the saunas, and kind of building those out. We actually can do way more than 16, but kind of to Nate's point earlier, we felt like it would just be two on top of each other and everybody would kind of be all crammed in. So 16 was like a nice amount where everybody's still spaced out. There's enough force between everybody where it still feels like you're on your own.

Michael Russell 45:07

Okay, but it's over 3 million. You're gonna have to go and allocate at minimum, probably three and a half million dollars. If you're gonna throw some landscaping in there, maybe, maybe more, but whatever you budgeted. So, how are you gonna pay for that? You're raising money for this?

Zac Willms 45:20

Correct. Yeah, that's gonna be an equity raise. Okay, and no bank financing for this, no, there's no like construction loan for this. There might be for a small component of it, but but because it's Airbnb, because it's short-term rental, they're a little bit skittish on giving big construction loans for it. So we might be able to get some for like the actual infrastructure build of it, but to do the cabins and everything else, most lenders in Canada right now are a little bit on the on the shy side of giving financing for that type of stuff.

Michael Russell 45:49

Yeah, absolutely. And so remind us again the investment return profile for this project.

Zac Willms 45:55

Yeah, so this one I think is gonna be a little bit less. This one's probably gonna be about a 24% IRR, and the 10% pref return will be paid out after, I think it's gonna be after year two. So on the glamping resort, it's gonna be after year one. This one, because the build time is gonna be a little bit longer, we're projecting that we'll be able to pay that out after year two.

Michael Russell 46:16

I mean, those are healthy returns. So you've got two projects that you're currently raising money for. You're raising for the existing one, and then you're raising for this new one. Is that what I heard you say?

Zac Willms 46:25

Not yet. No, so the cottage resort, the second one. So right now our full focus is on the glamping resort, er raise the capital, building that one out. We think that by the time the development's approved and it's gonna get ready for the capital raise on the second one, we'll already be done the first one. It'll be stabilized and we'll just be running operations and going for a sale in the next four years. I see.

Nathan St Cyr 46:46

Yeah, and look, I like your tone too. I like Zach, the way that you're you understand time and timing, and that it's not it's not a it can't be a rush. Because when it's a rush, that's where that's where bad shit happens. So you've said that a couple of times. Like you're going through this in a methodical way, stabilizing first. You've got the big vision, but you understand that it's gonna, it's gonna take some time to get there. And I think that's something that all of us can can at least myself can learn from is okay. I told myself this year the mantra was slow down to speed up. And I like the tone that you have when when you talk about the development.

Zac Willms 47:31

Yeah, I appreciate that. And honestly, Gary V is one of the guys I look up to as well, too. And he always just talks about going back to the basics of just enjoying the process, right? If we were trying to raise capital on both these sites and stress of getting all these done by tomorrow, it would just not be an enjoyable process. And we'd be stressed beyond belief and not be able to enjoy life. So I think doing one at a time, focusing on one and then transitioning to the second one makes sense. I mean, that cottage resort's already running, it's already making money as is. So there's nothing wrong with it. But obviously, it's highest and best use is adding an additional 16 cabins to it. So we want to take advantage of that, but there's no rush to do that today, tomorrow. That can wait a little bit before we actually realize that. Brian love it. I love it.

Michael Russell 48:12

Yeah, I appreciate that you mentioned Gary V. And I think that's a good segue into maybe the last question here to wrap this up. But can you share with us maybe what's what's one book or maybe a podcast or resource that's helped shape how you operate or how you think as an entrepreneur?

Zac Willms 48:27

Man, I got so many. First one that comes to mind, it's gotta be Buy Back Your Time by Dan Martell. That love that book is. Yeah, that one was one of the most tactical, life-changing books I ever read. Like, I'm an audible reader plus a book reader, and that was one of the ones where I'm like, I want to read this on the hard copy. I took notes, I took screenshots of my phone, I highlighted stuff, I refer back to stuff. I've told people about all these different practices within that book. So I I gotta give them credit. That was an amazing book, and yeah, no fluff. I like that right to the point.

Michael Russell 49:02

It's funny. So I read that book, and there's a lot of good takeaways, as you've mentioned. And so I was telling Nathan yesterday, I'm like, I'm like overwhelmed with all this stuff. So I'm actually doing right now, I'm doing the time audit worksheet that he talks about in his book. And I think it's gonna be very valuable to kind of figure out like, okay, well, uh, where can I delegate? I gotta start by understanding well, what am I working on? And then from there highlight what brings me joy, what fills my bucket, what is providing the most value in terms of moving the business forward versus just being busy work. So great resource. Love that suggestion. I'm actually in his fitness program. I'm getting ripped right now.

Nathan St Cyr 49:39

Nice, bro. And Mike, you're dude, you are a stud, bro. If you I know you guys listening can't see this, but dude, Mike is getting jacked.

Michael Russell 49:49

I'm I'm losing weight. I don't know about jacked, but I've I've lost some LB, so I'm feeling pretty good. But hey, this has been a great talk. I'm really glad to have met you, Zach. I know that you're doing you're moving and shaking, you're doing a lot of great things. If our listeners want to follow your journey and stay in touch with you, how should they do so?

Zac Willms 50:07

Yeah, you could follow me personally on my Instagram account. I'm active there and responding to messages. It's Zach Wilms at ZachWilms Z-A-C-W-I-L-L-M-S. If they want to follow the glamping site, it's at the Grotto Getawake Glamp on Instagram. Come check us out. You want to travel up to Canada for any of the American listeners, we are on a massive discount right now. A lot of Americans don't realize, but our Canadian dollar is much weaker than it's ever been. So my $175 a night Canadian, that might only turn out to be like $130, $140 a night American. So it's a massive discount for you guys this summer. Good point.

Michael Russell 50:44

Cool, sweet. All right. Well, we'll wrap up here once again. Thanks so much for listening to the Hotel Investor Playbook, and we will catch you next time. Aloha. Thanks for hanging out with us today on the Hotel Investor Playbook. If you got even one good nugget of wisdom about hotel investing, do us a favor, hit that subscribe button and leave us a five-star review. And hey, if you're feeling extra generous, drop a quick line in the review section. Something like Mike and Nate are the go-to hotel investing guys, or best podcast for anyone looking to crush it in hospitality. Or, you know, whatever feels right. Those little shout-outs go a long way in helping more people find the show. And they pretty much make our day. All right, appreciate you guys. Catch you next time.