Latest / Hospitable Hosts / Building a Successful Outdoor Resort Business with Clear Summit Investments
Transcript
- Miles - Hospitable: Okay hello Xander, nice to have you on, it's pleasure to meet you. Thank you everyone for listening to today's episode with myself and Xander. As always, if you enjoyed today's episode, please don't forget to like, share, and subscribe on your favorite podcast platform. And as always, if you'd like to hear more about Hospitable, you can head to hospitable.com and you can learn about our short-term rental property management software. Hello everyone and welcome to today's episode of the Hospitable Hosts podcast. I am your host for today, Miles Hobson, head of marketing here at Hospitable. Today I am speaking with Xander, the founder and CEO at Clear Summit Investments. He is a seasoned real estate developer with experience in both residential and commercial projects. He has developed and asset-managed high-rise hotels, affordable housing, and industrial subdivisions. Zander Kempf: Likewise, thanks for having me, I appreciate it. Miles - Hospitable: No worries. ⁓ I guess first off, we should actually ask whereabouts you're calling, ⁓ from Xander. Where are you joining today's podcast episode? Zander Kempf: Yeah, so I live out in Hawaii, so I'm on north shore of Oahu. Miles - Hospitable: Nice, yeah, you can see some palms in the background. Looks like a nice view out there. Zander Kempf: Yeah. Miles - Hospitable: Great. So ⁓ obviously we're here to kind of talk about outdoor adventure and short-term rentals. So we're going to get straight to the point of kind of asking you, you know, why should a successful short-term rental host consider potentially moving away from traditional apartments or houses or, someone that's not even a host yet consider, you know, not choosing that and instead choosing something like an RV or a glamping resort kind of space instead. In total, Zander has personally completed 50 real estate investments. He's a former USA Army officer and paratrooper with an Iraq deployment and served in Special Forces. If you enjoyed today's episode, please don't forget to like, share, and subscribe on your favorite podcast platform. And we're going to get started right now. Zander Kempf: Sure. Yeah, I I wouldn't necessarily say that everybody should. You know, in real estate, I think there's a thousand different ways to make money and a lot of them are very viable. know, I friends that are very successful in everything from single family flips to wholesaling to, you know, large high rise construction and development. It more than anything just matters that you pick a niche and you stay with it. and get really, really good at just doing that one thing. you know, some reasons for transitioning to larger resorts, like that I could say is economy is a scale, you rather than having smaller individual short-term rental units. Now, you know, we can have a high volume of these units on one property and we can build in all the efficiencies with that. have one website, one set of marketing, one set of guest communications that covers a much wider piece. It also lets us kind of add revenue streams, which isn't something that you can really do with an individual, like a single house. You know, on a resort, can sell food and beverage. We can sell advertising. can sell local tours or other adventures around. If our resort amenities are really nice, we can even sell day passes. You know, we do, we do some hot springs as well. So we can sell day passes to our hot springs and that ends up being some really significant amounts of revenue on top of just the nightly stays. Miles - Hospitable: Nice, okay. And have you seen kind of ⁓ a lot of people that enter the space, are they ⁓ entering as kind of a first time host? This is kind of their first time into kind of hospitality, or do you often see people kind of transition from either short term rentals in kind of a traditional sense in apartments and that kind of thing, or homes, ⁓ or they may be even coming from hotels and coming into more of this kind of short term rental resort aspect? Zander Kempf: What I see people entering the most commonly is glamping resorts, smaller boutique ones. Those have gotten really popular over the last couple of years where people, know, small piece of land and maybe they put a couple of yurts, a couple of tiny homes on it. And those typically do really well. You know, some areas now, just like we went through this big Airbnb boom of everybody putting single and short-term rentals on, there are now a lot of smaller glamping units. So there is getting some saturation in the market. Miles - Hospitable: Mm-hmm. Zander Kempf: But that's certainly the entry point of starting with a small handful of units on a, on a piece of land and the build out costs sometimes can be relatively low. You know, these yurts or small canvas tents or might just be five or 10 grand each. ⁓ so, so there are some, some lower entry points. Now you're getting into the world of developing, so you have to look at what the zoning is and kind of play with some of those pieces, but depending on what County you're in, ⁓ that could be a pretty low cost entry. Miles - Hospitable: Yeah, potentially ⁓ much higher margin possibility and higher return on investment if you're choosing the right place to do it, guess. Cool. And how did you get into the space yourself? What's your backstory? Zander Kempf: Yeah. So I was, I started in real estate nine years ago. I was a multifamily, um, and land development person. So I had 23 apartment buildings. We were looking at different land land development projects. I had a lot of experience in both land and industrial. And it was kind of peak COVID at the time where there was all of this mania in the multifamily world. Cap rates were crazy low. Interest rates were low. Everybody was overbidding. Um, and the numbers just didn't. makes sense to me in that space. you know, Warren Buffett's like, be fearful when others are greedy and greedy when others are fearful was ringing in my head. And so I decided to sell my whole multifamily portfolio and look at other asset classes. I think I had done at that time, one or two small short term rentals, but those were just kind of side things that had popped up. We looked across the real estate world and we saw Miles - Hospitable: Hmm. Zander Kempf: You know, things like cell storage and mobile homes, mobile home parks that were, had gone through this big institutional roll up where they used to be really decentralized and owned by small mom and pops. And then over the last decade, all of this institutional interest came in and rolled them up and really compressed cap rates and really drove up values. ⁓ so that had already kind of happened, but just adjacent to that was RV parks and glamping resorts where it was still a very. ⁓ unsophisticated industry. There's not a lot of big players in the space. Most everything is mom and pop owned. ⁓ And which means oftentimes they're not really professionally managed. They don't have great amenities. They don't have great marketing. They might've just owned it for 30 years and haven't changed it since then. So it leaves a whole lot of opportunities. So we started finding ⁓ ability to find really good deals with big upside opportunities. ⁓ and with very little competition on the deals that we're bidding on. So kind of dove all in that space, built a whole company around it of now we're vertically integrated with in-house construction, in-house property management, ⁓ and a whole team to raise capital and asset manage these resorts. Miles - Hospitable: I see. And maybe you can delve little deeper into that because we kind of skip straight into the ⁓ tips and tricks of kind of outdoor hospitality, but maybe you can give us a little bit more on clear summit investments and exactly what it is that you're doing. Zander Kempf: Sure. Yeah. So we are a outdoor wellness resort investment firm. So we buy glamping resorts and hot spring resorts. Right now we have five, five properties, three in Arizona, two in Colorado that we purchased in the last year. Two of them we built ground up. Three of them were existing. And these are properties where people will come and stay for the night. They're landscape style. So they're spread out in nature. You're Miles - Hospitable: Hmm. Zander Kempf: you know, able to have a fire under the stars or sit near a creek. The hot springs, you have hot spring pools and cold plunges and saunas. Everything has a wellness component. So it's a world of different from going to a, you know, white box hotel and we're near either national parks or other major destinations. And we got our footing in this space and are going to continue to expand. So we'll aim to acquire another five to 10 resorts this year and then continue doing that every year. we are building our portfolio to have all of the economies of scale of managing of a large portfolio of these resorts. And then, you know, the benefits of sharing customer data and cross marketing in between them. then we can either hold these resorts for the long term or potentially bundle them together and have a large portfolio exit at some point down the road. So we kind of have two options there, but ⁓ certainly primaries like buy and hold long-term investors. Miles - Hospitable: Hmm. Nice. And you said you had five properties at the moment. I think just for kind of our listeners, a property for our listeners is often like literally one property, one unit, I guess, one listing. When you say five properties, I think you mean kind of a lot more units than that. like, I mean, guess how many like, I don't know what you call them, rooms, units. Yeah. How many units? Sorry. Yeah. Zander Kempf: Yeah. We say units. Yeah. We have five. Yeah. We have five resorts. So the first one was the smallest that we built. It was a 12 Airstream glamping resort. ⁓ we have a 260 pad RV park. ⁓ and then we have a, ⁓ opening in a month. Now we have a 42 tiny home resort near Flagstaff, Arizona. ⁓ that glamp, that first Airstream glamping one is up by the Grand Canyon. And then we have our two hot spring resorts in Colorado. Miles - Hospitable: Hmm. Zander Kempf: Um, one of them has 10 units on it, does, uh, over a million and a half a year in revenue. Cause we do a lot of day passes there. And then we have another hot spring resort in Buena Vista, Colorado. Um, and that one has a 22, uh, it's like a 22 unit, uh, hotel with a few cabins on it. Um, both of the two hot springs will be expanding pretty significantly. So the first one we're entitled for 113 units. So we'll be building those out over the next year or two. And then the second one, we've got room for a nice retreat center and at least another 15 cabins. Miles - Hospitable: That's interesting. just thinking about if someone else listening is maybe not to the same scale, but thinking about kind of starting up there at their own RV or glamping site, how do you choose those locations? Because that's kind of a mixed of geographies. Like obviously all sounds stunning, obviously very outdoorsy, rugged, beautiful places, I'm sure, but completely different states. Like how do you even go about picking like, you throwing a pin on the map and deciding that you're going to be in Arizona or wherever it is. Zander Kempf: Yeah, I mean, for us, it was kind of where we started finding opportunity. We had already had a pretty big footprint in Arizona with some of our previous ventures. So having the connections there, understanding the market under having the connections with the municipality for the development side. ⁓ and then being backed by the market of, know, we have all of the major metros in that area, Phoenix, Salt Lake City, Las Vegas, and Denver are all rapidly expanding. We a lot of population growth, a lot of job growth. Miles - Hospitable: Mm-hmm. Zander Kempf: So that's, you know, good local demographics to lift us up. We only go near, we want to be at least ideally two, two or three hours from a major Metro. And then we also want to be near a major destination. So, you know, we have the two near the Grand Canyon and then our other two are hot spring resorts. So those kind of make their own destination, but are still within two hours of Denver. Miles - Hospitable: Yeah, okay, that makes sense. And then I think that's kind of the positive aspects that you're looking out for. Is there anything like, you know, red flags when you're looking at a new location or potentially a resort that you're trying to take over or a site that you're trying to build on? Is there any kind of red flags that kind of make you walk away from such a deal? Zander Kempf: ⁓ we always want to be in a growing market. So, you know, kind of the opposite of some of those pieces, we want to make sure the population, the local population is growing. We don't want to be too rural for our properties. actually have to have staff on site. So if we're five hours away from anything, then it's kind of hard to get people to come and work there. Even if they stay on site, they're far from everything else. ⁓ we also look at local supply. So if there's a lot of other resorts being built in the area, that means the market's going to be flooded with, ⁓ flooded with inventory. Miles - Hospitable: Hmm. Yeah. Zander Kempf: And depending if the if the area is really growing and can support it, then that doesn't necessarily kill the deal. But it's certainly something to look into. And what we often tend to do in the US is way over correct. So if there is an area that is under supplied, we'll build way too much supply for it. And then we go through this big like seesaw. So that's not the kind of thing that we want to experience. So we do put a pretty heavy look on that. Miles - Hospitable: Yeah, fair enough. That makes sense. And then kind of switching gears a little bit from location, you touched on some of the amenities that are at the properties. What do you think some of the things you have to do to kind of create a five-star experience at these resorts for your guests? Because we talked about return on investment. At the end of the day, even if it can be cheaper to build some of these units, you still need to be driving the guests and you still need to be getting a decent nightly rate for that hire. ROI to be the case. Zander Kempf: Yeah. I mean, for us it's amenities and that's, that's a differentiation, ⁓ that a lot of places don't have is these, these nice health and wellness amenities. ⁓ and even something that differentiates us from the more institutional places, you know, you go to a, the big name, you know, Hilton Hyatt Marriott those, and they feel very sterile, ⁓ versus if you go to like a small mom and pop boutique bed and breakfast where it feels very like warm and cozy that Miles - Hospitable: Hmm. Hmm. Zander Kempf: That kind of feeling is more what we want to bring into our properties. Um, because it makes somebody like your nervous system kind of goes down. You can relax a bit more and there's more thoughtfulness put into not just what does it look like on a, you know, from an institutional level, but like, how can you actually experience it? Um, the amenity side of what, you know, what amenities are you actually going to use? And can we put quality ones in there? We're not just going to throw a cheap sauna in there to check the box. We're going to put a really nice sauna that actually gets hot enough for you to enjoy and get a health benefit out of. ⁓ Same for a cold plunge. If we do the hot spring pools or, you know, we have one of our hot springs has a creek running through it. And ⁓ so there's a deck and a step so you can go down and rocks dammed up. So you can actually go into the creek and soak in the Miles - Hospitable: Hmm. Zander Kempf: cool mountain water after sitting in the hot spring. It's very different experience and just little like thoughtful pieces like that. Miles - Hospitable: Yes. Nice, that's very cool. And you kind of touched earlier on kind of, guess, the fact that you need boots on the ground, right? How do you manage, I guess, that team in a remote situation? You have all these different locations. Do you have kind of a management team at each location? And do they kind of then report into kind of a more central team? Would Lutikus kind of understand how you kind of, yeah, manage the experience across all those different... ⁓ and make sure that there is that consistent experience that you're looking for and make sure that the high standards are followed across the board. Zander Kempf: Yeah, so we do only properties that are large enough to support on-site staff. So every one of our resorts has a general manager. And this also kind of goes back to your last question on like what makes for a really great guest experience. That general manager is one of the most important things that we can do for a property of getting somebody that is really exceptional, experienced in hospitality, but also like a good people person because they interface with a lot of the guests. Miles - Hospitable: Hmm. Zander Kempf: And what we find is we look at the five star reviews that we get on Google and TripAdvisor and everything. And a huge number of them mentioned the general manager or some of the other staff by name. So that really reinforces to us how important it is to have that like really great, friendly, happy, helpful people on site. From a management perspective, that's, it's critical of having on-site staff and basically the way we run it is we'll have a general manager and then I. staff or work campers underneath them that's at each property. They'll handle everything physically on the property and then we have our corporate team that will run everything that's off the property. That's all your marketing and bookkeeping and social media and all of those pieces. That gets handled consolidated. We can do that more efficiently. The general managers report into our asset manager and that's kind of the flow to oversee the operations. Miles - Hospitable: Nice, interesting. And then I would love to get your thoughts on kind of, guess, trends in the market. Obviously, you've seen kind of a great potential here and you're looking to kind of grow and take on more resorts, build more resorts as well. But do you think that there is a trend towards more kind of outdoor hospitality from both kind of a hosting perspective and people building more of these facilities? And then also from like a traveler perspective, are you seeing that it's kind of trending upwards? Or is it kind of being pretty consistent, but you just see kind of more markets that you haven't tapped into yet. Zander Kempf: No, this wellness industry, the wellness tourism is rapidly expanding. It's where people, I mean, you look at our society as a whole right now, less and less people are drinking, more people are caring about the biohacking, the health and wellness. You're starting to see bars pop up that are alcohol-free bars, more parties and events that are alcohol-free or daytime parties that are focused on connection. Miles - Hospitable: Hmm. Zander Kempf: This is, you know, already the Gen Z demographics has been pushing towards more experiential and millennial also have been pushing more towards experiential than physical possessions. And now we're pushing that even a step further into this wellness world. So tying those two together of people get to go have an experience. And again, when we compare to a white box hotel, it's much less of an exciting experience in going to, you camping or glamping or to a hot spring or to a cabin with a bunch of friends. So we see a really strong, and it's not just us seeing it, there's a lot of market reports backing this, of more and more people traveling domestically, more people wanting experiences, more people pushing into wellness, and that being what they care about. So that's why we're heavily investing in it. It's our sole focus right now. And that's why I think it's gonna continue expanding. Miles - Hospitable: And so obviously I don't know flood the market with loads more hosts and but if anyone's listening to this and wants to kind of get it started and kind of you know Creating a kind of a wellness retreat even if it's on a smaller scale What's kind of the the main thing that they should take away from this and like what's the thing that they should be kind of? Thinking about first before they even step foot into this kind of territory Zander Kempf: Yeah, I know. Miles - Hospitable: It's big question, I know. You can think for a minute. Zander Kempf: I mean, the answer I would give is if you're getting into anything that, cause there's a level of complexity here and just being extremely comfortable with the financials and knowing is not every glamping resort in every market is going to be successful. There's not necessarily demand for it everywhere. Sometimes seasonality can kill it. Sometimes the cost to build it or to buy something is just, is just higher than it's worth. So. You know, we might look at a hundred deals before we actually find 10 to make offers on and one that actually passes our due diligence and we purchase. ⁓ there's a wide, there's a large volume of properties out there that just don't pencil either. They're too small. They're too seasonal. ⁓ they're too remote. ⁓ so, so not every, not every deal works and just getting a really good understanding of. You know, we, we see a lot of people in this space too, that are really passion driven because unlike a lot of other areas in real estate, this is something that is, ⁓ you can actually connect with on a, on a deeper level, often more so than maybe a self storage or a basic multifamily property. So you see a lot of people jumping into the space that are really passion focused, but they, kind of clouds their judgment and they forget about that. This is a business and an investment and it's important to have. Miles - Hospitable: Hmm. Zander Kempf: both pieces of there, because they're both valid, but you certainly can't be all passion and then get into something where just simply the numbers don't work. Miles - Hospitable: makes a lot of sense. Cool. Okay. think final easy question for you Xander is basically where do hosts go to find out more, I guess, both about the results and maybe staying in one of them, but then also kind of the potential investment opportunity too. Zander Kempf: Yeah, absolutely. So you can follow me on LinkedIn. It's Xander Kemp with a Z or you can go to our website, clear summit investments with an S.com. Awesome. for having me. Miles - Hospitable: Awesome. Thank you very much, Chanda. It's a pleasure speaking with you.