Farm diversification finance allows a successful glamping site to expand
Over one third of farmers have now diversified their farms in some way. Many different farm diversification options are available, but one of the most popular in recent years has been glamping sites. Glamping sites offer farmers an ideal opportunity to increase their income from underutilised land by tapping into demand for agritourism and accommodation in rural locations. However, glamping sites often require upfront investment, which is where our farm diversification finance can help.
Our Central BDM, Sue, recently handled a loan case for a farm diversification success. The owner of a family farm in Shropshire started a glamping business with just a few pods in Summer 2022, with the hope it would create an additional income stream for the farm. The business completely exceeded all expectations, and multiple members of the family became involved in the business. The family wanted to build on this success by adding more pods and improving the infrastructure, and for this they needed capital, which is why they came to us for farm diversification finance.
Background on the glamping business
The glamping site is situated in the beautiful countryside of Shropshire and sits on the edge of the Shropshire Hills, an area of Outstanding Natural Beauty, and backs onto woodland through which the Shropshire Way passes. Therefore, they are plenty of walks and trails for guests to enjoy. The glamping site is also dog friendly, so they have many guests who bring their dogs to go walking in the local area.
The location is rural and stunning, but it also benefits from local amenities including three nearby villages, as well as a good-sized town within 10 miles. There is an excellent pub 5 minutes walking distance from the glamping site, which serves great food and is good value for money, and most of the glampers end up there for breakfast and evening meals.
Having opened the site in the middle of summer last year, the family were not expecting huge results in the first year, but they blew past their income target in no time. Likewise, they were expecting the winter months to be very quiet and even for there to be no income periods, but even in January they reached over £10k for the month. February was also fully booked, with many repeat bookings throughout the year.
Upselling and making the most of the glamping business
The family also runs two festivals per year at the farm. The first festival is a music festival where they put up a marque and charge an entrance fee. The second one involves the whole village as it’s a wellness retreat where all the pods are booked by health and wellbeing practitioners who set up their treatment in the pods and then sleep there at night. The family have cleverly got the pub involved in both for food, and they have a local camping site that has also booked out.
Having reviewed the success of last year, the owners noticed that 90% of all bookings were adults, so they have now decided to go adult-only. This has been a big selling point for them and has further increased their bookings.
They have also made an effort to work with local tourism businesses to provide tours and activities, including horse riding tours and quad bike riding.
Making the business a family affair
The glamping business may have been started by one family member, but it now clearly spread to other members of the family. The mum and daughter run the business day to day, but they also have two weekend employees to assist with the cleaning and turnarounds. The daughter has events experience, so helps to run the marketing of the business while also supporting the daily operations.
One of the sons has building experience and normally works off-farm in the building sector, but during Covid he was able to work on building the infrastructure of the site as well as getting the pods in place ready for the launch.
The other son works alongside the dad in the family’s other main business, a haulage company, which is very successful in its own right.
What was the farm diversification finance used for?
Following the success of the glamping business, the family were keen to expand, but to do this they needed more capital. They came to us looking for farm diversification finance of around £250,000, which we were happy to provide. They had a relatively low LTV of just over 30% and a clear business plan with many ideas for additional upselling opportunities.
The pods they use are extremely well-built, provide a luxury feel, and have an expected lifespan of 40–50 years, so they provide a good investment opportunity considering the return opportunities.
The farm diversification finance would mainly be used to add additional pods to the site, for which there is plenty of space. However, the family also had many ideas for additional profit. The family were looking to put on more themed festivals as this not only provided extra profit with the glamping, but also the entrance fee for the visiting guests.
Additionally, as they are dog friendly, they were keen to set up a tent at the wellness festival for dogs while owners have their treatments. They may even be able to offer dog treatments should they find an appropriate practitioner.
They have recently started to provide a welcome basket, and you can order extras such as food and drink all sourced locally where possible. They hope to expand this option as it develops. They may also look into the addition of a vending machine in the reception area, as this is left open for guests in the evening. In the longer term, they would also like to look into adding a small café on site to provide breakfast and light refreshments.
The daughter is also in the process of taking back the farm building that was rented out to some who ran a DIY livery. Their intention is to offer package holidays where people can bring their horses to stay and ride in the local area, as there are many stunning bridleways that can be easily accessed from their land. They have already had significant interest in this option.