Operating Expenses for Outdoor Hospitality
Let's take a look at expected ranges for typical operating expenses in Outdoor Hospitality.
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Estimated time to read: 5 minutes
TL;DR:
Expense Categories:
General & Administrative
Marketing & Advertising
Credit Card Processing Fees
Cable/Wi-Fi/Telephone
Utilities
Water & Sewer/Septic
Insurance
Property Taxes
Trash Removal
Maintenance & Repairs
Payroll
Below, I’ll dive into each category and provide some detail/thoughts around sub-categories and expected ranges per rental unit per year and/or as a percentage of revenue, where applicable.
For our purposes, rental unit = campsite, cabin, tent site, or glamping unit.
Expense Categories
General & Administrative
Estimated at $75-$150 per rental unit per year or ~1-2% of gross revenue.
This category typically includes office expenses and supplies, software/tech, licenses and permits, professional fees, etc., and shouldn’t vary much between property types or from year to year.
Marketing & Advertising
Estimated at $200-$275 per rental unit per year or 3-4% of gross revenue. Could be MUCH higher for high-end glamping properties or landscape resorts, or new campgrounds/RV parks in lease up. Also could be higher if you’re rebranding a property or changing its makeup of revenue/customers.
This should include SEO, PPC, organic and paid social, email marketing, print marketing, legacy marketing, and grassroots marketing.
Credit Card Processing Fees
Estimated at 3% of gross revenue.
I like to take a conservative approach and assume every dollar of revenue is subject to credit card processing fees. If you’re like us, you’ll want to minimize cash purchases at the property.
Cable/Wi-Fi/Telephone
Estimated at $50-$100 per rental unit per year.
This can vary widely, based on a few things:
Are campers required to get their own Wi-Fi and/or cable accounts at their campsites?
Are you providing cable or just Wi-Fi for streaming? Or neither?
What types of services/providers are available at your location?
Utilities
Estimated at $200-$1,000 per rental unit per year.
This can include electric, oil/propane, natural gas, and public water/sewer (if available). You’ll find yourself on the lower end of this range if all you have at your property is electric, private well and septic, and propane and at least a portion of your customers get billed for electric usage.
You’ll be on the high end of the range if you have public water/sewer and no electric reimbursements from your customers.
Water & Sewer/Septic
Estimated at $25 per rental unit per year.
This includes the cost of chlorine and bacteria testing for water systems as well as septic pump outs and only applies for properties with private well and septic.
Insurance
Estimated at $100 per rental unit per year or 1.5% of gross revenue.
Insurance can vary widely based on the amenities and activities that are performed at the property. A camping or glamping resort with a water park, ziplines, and other risky amenities/activities will have higher insurance rates. Always ask to see the current policy and talk to your insurance professional in due diligence!
Property Taxes
Estimated at $50-$100 per rental unit per year or 2.5-5% of gross revenue.
Your property taxes largely depend on your municipalities and if a property will be reassessed (and how it will be reassessed) upon sale.
Trash Removal
Estimated at $25-$50 per rental unit per year.
In our experience, you’ll be at the higher end of the range if you go with a company like Waste Management or Republic Services. If you have a reliable option in a local company, you’ll likely find much cheaper prices.
Maintenance & Repairs
Estimated at $175-$350 per rental unit per year or 2.5-5% of gross revenue.
This will largely depend on the amenities and facilities found at a given property and the state of repair of the property. Of course, you should have a reserves budget of a similar amount for deferred maintenance and capital expenditures, but those are typically not considered operating expenses.
Payroll Costs
$750-$1500 per rental unit per year or 12.5-25% of gross revenue.
This includes payroll and all associates costs (taxes, fees, insurance, etc.).
On the low end: rustic campgrounds with all seasonal or annual rental agreements.
On the high end: highly amenitized camping/glamping resorts with staffed activities and food/beverage offerings.
That’s all for this week. Thank you so much for reading!
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