Setting up a glamping business: £50,000 secured on land
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Glamping has moved from a trend to a significant industry and business model. It gives vacationers the opportunity to enjoy all the relaxed informality of camping with the added extras and comfort of a 5-star hotel.
It also allows the owner to set up a hospitality business with great earning potential.
Glamping has, therefore, become a growing business in the UK - particularly with farmers looking for diversification and new sources of income.
We recently helped a small farmer set up a glamping business, with £50,000 of funding to buy and equip yurts.
Many farmers can be well placed to take advantage of the returns a successful glamping business can offer. A good site location with a view, woodland, river or lake in a popular tourist area might be ideal for a camping business. Easy access, secure parking and facilities like a social area or even clubhouse could be ideal.
We were recently approached by a small farmer whose Somerset farm was in need of new income streams, and who saw the possibilities of Glamping.
He had looked at the costs of bringing in water for a shower block, electricity and a wifi link, and had contacted a booking service which could provide an online booking facility. He had also spoken to the local authority and discussed a licence, which is required from your local authority if your site is to be used for more than 42 consecutive days or more than 60 days in a year. It is a criminal offence to operate a campsite or caravan site without a licence.
The council had no objections to the new venture and accepted his proposal based on a short business plan, which his consultant helped him prepare, which, as well as providing income figures, covered concerns such as drainage and the impact on wildlife.
The business would be seasonal - but with his farm being in a good location, he felt it could provide the extra income he needed. He talked to an expert consultant who explained the costs and the challenges he was likely to face.
“I looked at several solutions. Treehouses are popular, but planning might be a problem, and the insurance costs are high. Huts could mean year round business, but the costs of a good looking hut that does not look like a shed were very high. I decided on yurts - and the traditional kind, with a curved wooden frame, seemed to have the kind of appeal I was looking for.”
He had trees to think about - and chose green canvas rather than white for the yurts to avoid looking grubby and run down after just a couple of seasons of leaf mould and bird droppings.
“I had space for about eight yurts for letting out, and a larger version to use as a social area, with games and activities for guests to use. The costs varied with suppliers, but the quality I needed would mean spending around £40,000, and then I would need to equip each one with suitable furnishings and brought in services.
As for fitting them out, basic kit would not give the right feel. Something quirky but comfortable would be vital.”
His total costs would be in the region of £50,000, and he needed to move quickly to be ready for the summer season.
He already knew that his main asset was his land, and that many lenders are wary of using land as security. He anticipated that raising the cash might be difficult - especially as he had found problems with arranging lending in the past.
However, we know lenders who are able to take a positive approach towards land and are able to offer funding of up to 50% of the value of land already owned.
The value of the farm’s land holding was more than enough to provide security for the £50,000 required. We were able to arrange funding at 6% over ten years, which the farmer was more than confident would be easily returned by his new venture.
Are you considering the possibilities of glamping? At Rangewell, we help landowners become holiday business owners with innovative answers to their funding needs. Call our holiday property funding experts to see what they can do for you.