- Hipcamp, often described as the Airbnb for camping, is sending triple the amount of money to property owners as it was a year ago.
- With wineries unable to host visitors and farms hurt by the closure of restaurants, their income from Hipcamp has become critical.
- Benchmark's Sarah Tavel, who led a financing in the company in 2018, said that a lot of people "want experiences, not stuff."
It's been a devastating year for Alyse Hickman's small family winery in northern California. Her 15-acre property in the tiny town of Bangor typically makes its money from on-site wine sales and events like bridal showers and weddings.
With Covid-19 restrictions ending indoor wine tastings and group gatherings, Hickman's most reliable source of income has come from converting some of her land into campsites and renting out tent or RV space for about $50 a night.
Hickman Family Vineyards is among the thousands of properties that have signed up with Hipcamp, a San Francisco-based start-up seeing record growth during the pandemic. Hosts on the site have been gearing up for a busy Labor Day weekend and the unofficial end to a very strange summer.
"They're keeping us afloat so I can at least pay my bills," said Hickman, who started the winery with her husband in 2002. "A lot of people are coming back for a second or third time, which is great, and they're bringing their friends."
Hipcamp, which takes a 10% commission on each transaction along with a small booking fee, says it's sending hosts more than triple the amount of money at this point in 2020 as it did a year ago. Hickman estimates her Hipcamp revenue is up 50% over last year, even as her overall business is down by about three-quarters.
Whether it's wineries, cattle ranches or vegetable farms, owners of rural estates are confronting an unprecedented crisis due to the near-collapse of the tourism and hospitality industries and plunge in restaurant sales. Properties that count on consumer traffic to move their products have been stunted by social distancing rules and restrictions on indoor activities, while food producers are stuck with excess supply from the sudden closure of restaurants and cancellation of festivals and live events.
Hipcamp is often referred to as the Airbnb for camping, an analogy that helps explain how the company operates and also underscores the dramatic changes taking place in the travel economy. Airbnb's business, which for years flourished in big cities, has suffered this year from cancellations and the economic shutdowns in big cities. However, as CNBC reported in August, hosts in rural areas are seeing a 25% increase in revenue compared to 2019, as city-dwellers look for quick getaways.
Camping is a uniquely Covid-friendly activity, as long as there's plenty of space to spread out and bathroom facilities are cleaned regularly and properly. That's been a challenge for popular and densely-populated public campgrounds, many of which have had to close because of the rapidly spreading virus. Yosemite National Park had to shut down in June just two weeks after reopening because of surging infections in California.
With most summer camps canceled and air travel down by about 75%, families have been packing up the van for mid-week jaunts into the wilderness. That's how many travelers are discovering Hipcamp.
Hipcamp, which was founded in 2013, first got traction in California but is expanding rapidly in states like Texas, where there's a dearth of public camping space, said founder and CEO Alyssa Ravasio, who lives north of San Francisco. Sites are popping up in Oregon and Colorado as well as Florida and upstate New York. And in late August, Hipcamp made its first jump outside of the U.S., acquiring Australia's Youcamp, and pushing into Canada.
"People are looking for the opposite of being locked in an apartment," said Ravasio. "They don't want to go to hotels, they don't want to go to airports. They want to stay safe."
Hipcamp was hit hard in the early days of the coronavirus as panic set in and people canceled travel of all kinds, and the company had layoffs in April. Ravasio said bookings plunged 80% and the company was slow to reopen sites, as it wanted to make sure hosts were putting the necessary health and safety measures in place.
The last few months have seen a dramatic turnaround.
At Hickman's farm, visitors can play bocce ball, tether ball and cornhole along with enjoying the Estate Zinfandel. Her camping business is experiencing rapid growth even after she brought the number of campsites down to three from five to provide greater spacing and to make sure visitors were comfortable sharing the two bathrooms.
In recent weeks, she's been hit with another potential crisis from the wildfires that have engulfed California. The fires themselves haven't approached her area but the deteriorating air quality has forced people to stay inside.
"We cannot catch a break," she said.
Climate change is among the biggest risks to Hipcamp's business. From the out-of-control fires in California to the historic hurricanes and floods hitting the Southeast and Gulf Coast in recent years, the company has to manage for unexpected cancellations and refunds every season. More importantly, there are longer-term, existential issues related to rising temperatures making certain areas uninhabitable.
It's not a problem that Hipcamp can tackle alone, but Ravasio says the company can at least help hosts reinvest in their land and promote a more sustainable form of travel, where vacationers drive short distances and participate in low-impact activities instead of flying thousands of miles.
Hipcamp recently added a feature that allows hosts to offer additional perks, whether it's a picnic dinner, group horseback ride, yoga session or an ecology tour.
"People want to connect with nature," said Sarah Tavel, a partner at venture firm Benchmark, which first invested in Hipcamp in 2018 and participated in a followup round last year that was led by Andreessen Horowitz. "They want experiences, not stuff."
In central Iowa, some 2,000 miles east of Silicon Valley, 99 Bottles Winery & Vineyard has become a popular spot for tent campers as well as those traveling in RVs. Visitors, who pay $25 a night per site, get to feed the cows, explore the cornfields and relax under the nighttime stars.
Mark Newman first planted grapes on his six-acre property in 2007 and opened a tasting room seven years later. The 66-year-old, who runs the vineyard with his wife, said in past years the winery has hosted weddings with 300 people. He realized in early 2020 that celebrations were out, taking away one of his major revenue sources.
Fortunately, his seven campsites, five of which include hookup availability for RVs, have been almost booked solid throughout the pandemic. Camping is now about 40% of his revenue, up from 20% a year ago. The rest of his business comes mostly from wine and beef sales.
For adults, Newman often sets up private wine tastings in the evening. And for the kids, Newman said there's the chance to be outdoors and run around without having to worry about social distancing or navigating a crowded campground. The property has a large sand pile that serves as a playground, and plenty of space to kick balls around and even fly drones.
"The kids are hungry for something to do," Newman said. "They were taken out of school and haven't been able to be around their friends."
As marketplace businesses grow up and attract the attention of industry incumbents and government officials, regulatory concerns inevitably follow. Airbnb has been beset by laws regulating short-term rentals in residential areas and efforts by the hotel industry to call attention to differing safety and security standards and unequal tax structures. Uber and Lyft are battling a new California law that says drivers must be treated like employees and not contractors.
Ravasio acknowledges that Hipcamp has to contend with a complex set of rules — in some places, laws are so localized that they vary "often down to the parcel." On its hosting standards site, Hipcamp tells property owners, "Do your homework and make sure you're compliant with all applicable local laws."
Following the rules is not always so straightforward. One host, who owns property near the northern California coast, didn't want to speak on the record because of concerns regarding a specific law in the state called the Williamson Act. The act allows for a tax break for large agricultural properties that agree not to develop on the land for certain commercial purposes. It doesn't distinguish between allowing for a few tent campers on a sprawling site and setting up a large RV park.
The host has hundreds of acres of undeveloped property and counts on both the tax break and the limited income from campers to help cover the high costs of owning the land and maintaining its natural beauty.
Hipcamp is preparing for future battles. In April, the company hired Mason Smith, the former head of public affairs at Cruise Automation who also previously worked at Airbnb, as its head of government and community relations.
It's also been strengthening its balance sheet, raising $25 million last year, before the pandemic. Add in the business's growth in 2020 and "the company is in a stronger position financially than we've ever been," Ravasio said.
Whatever regulatory hurdles come down the road, Ravasio is convinced that the company is filling a need, providing an outlet for people who want to unplug, relax and be safe while simultaneously helping landowners generate critical income to keep their property in the family.
"Right now is a very interesting moment for the whole outdoor space," Ravasio said.