If you’re in the process of starting a glampground or already running one, you know that profit margins can make or break your business.
Last year, our profit margin at our glampground, Ferncrest, was a whopping 40%. I’m talking about bottom line, end of day NET profit.
If that sounds too good to be true, I thought the same. Afterall, most small businesses are lucky to crack 10% profit margins at the end of the day.
But the best part? It can (and should!) be higher.
So how do we (and how can you) ensure a glampground is as profitable as possible?
The answer lies in understanding and optimizing not just the financial aspects of your operation, but also the non-financial, experience-oriented elements that drive the bottom line.
Now let’s get into it… Below are five “secrets” we’ve found to greatly maximize our profit margins at Ferncrest over the last year…
1. Price Your Offerings Strategically
Your pricing strategy is one of the most powerful tools you have to influence your profit margins.
Many people approach this by looking at their costs and then backing into a price-per-night. I don’t think that is the best way with your glampground. The costs won’t be significant enough and you’ll find yourself under-pricing for the value you provide.
Put bluntly, your costs don’t matter.
Instead, consider what your guests are willing to pay for a unique experience and align that with your financial goals.
Our rule of thumb: premium is always better than budget. Price your glampground as a premium accommodation so that you have ample profit to reinvest back into it and the guest experience. Remember that 40% profit margin from last year? Well we reinvested nearly all of that back into Ferncrest this year to make it even better.
2. Control Your Costs with Precision
As much as I just told you that costs don’t matter… they do, sort of.
Keeping a close eye on your expenses is essential for maintaining healthy profit margins, especially as your business stabilizes and matures.
Once you are up and running, look for opportunities to reduce waste, negotiate better deals with suppliers, or invest in cost-effective solutions that enhance your guest experience without breaking the bank.
3. Optimize Occupancy Rates
Maximizing your occupancy rates is another critical factor in boosting your profit margins. The more nights your glampground is booked, the more revenue you generate.
Once you price your offerings, keep an eye on occupancy and adjust accordingly in order to maximize your revenue and profit. We haven’t started using it for Ferncrest yet, but we started to use a dynamic pricing tool at our hotel up the road called PriceLabs. This software automatically adjusts the price based on demand and pricing rules I setup. In some instances, it will sell rooms cheaper than I have in the past (ie if we have 3 rooms tonight it knows to move them), but in other instances it is getting more for the same rooms on a high-demand weekend. Instead of manually adjusting my rates like I did in the past, this tool does it for us. Consider the same type of technology at your glampground (we haven’t yet, but are thinking about using it for Ferncrest).
Lastly, implement strategies to attract guests during off-peak seasons, such as special promotions or targeted marketing efforts, to keep your site full year-round.
4. Enhance Guest Experience to Justify Premium Pricing
One of our favorite ways to increase your profit margins is by offering an experience that justifies premium pricing.
This could include unique amenities, personalized services, or exclusive events that make your glampground stand out.
When guests feel they are getting exceptional value, they are willing to pay more, which directly improves your profitability.
Note: this is probably the most important part of profitability but the least tangible! NEVER forget we are selling experiences in this business more than a place to sleep.
5. Use Financial Tools to Stay on Track
Finally, using the right financial tools can make all the difference in maximizing your profit margins. This includes something as simple as an accounting software like QuickBooks.
We also like to build external tools via spreadsheets that help us budget and plan out our business over a longer period of time. One of these tools we like to call the Glampground Profit Calculator (click for more info and quick survey), which helps us see our hospitality projects over a 3 year period based on some assumptions we make.
Consider building your own spreadsheets with data important to you that you can revisit and track over time.
These five secrets are essential for ensuring that your glampground is not only successful but also profitable.
Our goal this year?
50%+ net profit margins at Ferncrest… I’ll share more as this materializes!
Happy Glamping,
Brian & Joanna Linton
