A Micro-Resort Domino Effect

Some of you are thinking about building your own unique stay.

And the first question is always the same. How many units?

How many is too many? How many is enough?

It depends. But not on what you think.

Build to keep. Sell if the deal is right.

Here is my frame.

We build every property as if we plan to keep it forever.

Then, if the right opportunity shows up, we sell.

To make the asset sellable you need revenue.

Higher ADR, a higher guest profile, a better experience. You need enough cabins, and ideally enough land, so the next buyer can expand what you started.

Keep the micro-resort feel

Revenue is not the only thing that sells. The feel sells too.

Guests should never pile one on top of another. There is a magic ratio to it. Somewhere up to 20 units, as long as the land is big and the privacy holds. You can go bigger. You just cannot lose the privacy.

Now picture 10 units

I have a specific resort in mind. It is right here in the US. Say it has 10 units.

One cabin is a wow property. Two more are beautiful and highly desirable, each with its own features. The other seven are the structures you see all over the woods. Tents, container homes, that kind of thing.

Here is how they earn.

The wow unit runs $1,000+ a night.

The next two sit at $400 to $750.

The other seven scramble for $150 to $300 at 50% occupancy.

One unit out of ten carries the whole property.

Why the wow unit drives everything

Because it is one of one.

You can only experience it here. Not with another Joe down the road. Not in another city or state. It is a once in a lifetime stay. A bucket list item. A destination.

And it does more than earn.

It pulls the followers, the engagement, the discoverability. All of that spills onto every other property on the same land.

That is the micro-resort domino effect.

So is it better to build 10 average units, or 2 to 3 wow ones?

For me it is the 2 to 3. True one of a kind. A stay no one can find anywhere else. That is the secret sauce.

Stop counting units

So I stopped asking how many units to build.

I ask what revenue I want. Then I reverse engineer from there.

What ADR and occupancy do I need to hit that number?

What kind of build attracts guests who will pay that ADR? The unit count falls out of the answer.

It is never the starting point.

The trap most hosts fall into

I see hosts jump in with the same thought, passed around from host to host.

I have X dollars. I want as many cabins or domes or tents as possible. Where do I find the cheapest structure?

That is a dangerous mindset.

Even if you see similar resorts holding a high ADR with tents or domes today, it does not mean it lasts. The easier a market is to enter, the faster your competition gets in with the same structure. They dilute you.

Sometimes they beat you on amenities, location, and land.

The cheapest build is the easiest one to copy. The wow unit with your own story is the one no one can.

That's all for today,

Till next week, dear readers.