Buying a resort

At one time I heard that a resort owners career at their resort averaged 6 years. While looking for a source for that info (which I didn’t find), I came across

RESORT FAMILY BUSINESSES
SUMMARY OF RESEARCH
1998
Research conducted by
Sharon M. Danes, Professor
Family Social Science Department
College of Human Ecology

Excerpts…

OVERALL FINDINGS FROM THE SURVEY:
* Most resorts were seasonal, summer-only resorts fully operational from June to September.

* Average number of cabins per resort was 8.5 with 39% of them winterized.

* Most resorts were couple-run businesses (97%); two-thirds of the time adult and minor children
were involved on a part-time basis.

* A good reputation with customers was the most important business goal; 70% think they have
achieved that goal. Second most important goal was profit but with only 10% achievement.

* Eighty-two percent of resorts were in first generation of ownership; 13% in second generation.

* Twenty-five percent had gross sales of less than $25,000; 49% had between $25,000 and $99,999
in gross sales, and 28% had gross sales greater than $100,000.

* Most business tensions were around finances and business goals with females reporting more
tensions than males in those areas.

* Females do more of the daily management of the resorts such as reservations and cabin cleaning
than do males. Males do more building and grounds maintenance.

* Only one in three respondents was satisfied with the balance between work and leisure and females
were less satisfied than males.

* The top three changes in the next five years were related to expansion and improvements followed by more technological innovations

*Resort Couples and Their Families*

Those respondents who were the primary business managers were slightly more often female than
male (54% compared to 46%). The resort business owners also tended to be older adults with an
average age of 51 years. Specifically, 32% were 56 years or older, 38% were between 46 and 55
years of age, 33% were 36 to 45, and only 8% were under the age of 36. One in six resort family
businesses indicated they did not have children in the household. That fact is explained partly by
the age range of the respondents, 20 to 80 years. For those households who had children, the
range was one to seven. Twenty percent of those households had at least one child less than five
years of age.

Link to Full Report

I think after reading the many responses here, and the information and research that many have done revealing the marginal profits and long hours…I guess I’m thankful for the many resorts still hanging in there and giving many of us an opportunity to visit them.

Gross sales might be misleading. Quite a bit of overhead that makes your net very minimal.

“That is actually pretty darn good if you ask me…unless you’re the 25%. Still thou, for a 1/3 years work, make some descent to very good money.”

I think that’s total topline revenue – once you back out loan, taxes, employee wages, insurance, boats, docks, maintenance, paint, lawn mowers, gas, food … and about 1,000 other items I wonder what the net income really is ..?

I’m guessing less than minimum wage, especially when you figure in the amount of hours..

..and you never have time to fish – –

Matt Moen wrote:

Gross sales might be misleading. Quite a bit of overhead that makes your net very minimal.

Correct, gross sales and net revenue can be far apart. In fact net revenue can be in the red but they keep going with business expense deductions, depreciation, and other tax credits.

Agreed….deduct all personal expenses through the business and all you need to do is break even. Might even be ok to lose money and offset other taxes with the losses from the business.

Doesn’t leave much for retirement or other potential expenses though…

Matt Moen wrote:

Agreed….deduct all personal expenses through the business and all you need to do is break even. Might even be ok to lose money and offset other taxes with the losses from the business.

Doesn’t leave much for retirement or other potential expenses though…

Yes, I think they can even deduct all their meal expenses while working, which is all the time. Retirement could be covered as the value of the property particularly if lakefront could bring a handsome sum. Even if likely it is sold off as individual parcels for private cabins/properties.

Back in 2003 I worked for a resort on Leech that was owned by a good friend’s parents. They were about to retire and no children were going to take the resort. When they sold it, it was in their best interest to break it into individual lots to sell instead of selling it as a business. The did very well with this, and another resort was gone.

dfresh wrote:

Back in 2003 I worked for a resort on Leech that was owned by a good friend’s parents. They were about to retire and no children were going to take the resort. When they sold it, it was in their best interest to break it into individual lots to sell instead of selling it as a business. The did very well with this, and another resort was gone.

That’s what many of the old Mom and Pop resorts in my neck of the woods have been doing for years. In several cases, they stay on as “property managers” for the units that have been purchased. No word on what their retirement plan is…
In the mid-90’s I worked for a resort on Kabetagoma. Even in the off season, all I remember is working. 14 hour days were the norm. The first hand look at the amount of maintenance and overhead was enough to cure my of my resort-owning dreams. I just learned that the people we know well and have spent many Canada weeks at their resort are selling. We were there first new guests when they bought it in 2005. They’re burned out.

I was a bit surprised at this statement in the survey…

* A good reputation with customers was the most important business goal; 70% think they have
achieved that goal. Second most important goal was profit but with only 10% achievement.

I’ve been to a good number of resorts in MN/WI and completely out of the area. Certainly not an expert resort reviewer but I have been around.

The rules that some of these resorts have are crazy. It almost looked like they had a problem with one customer and then made a rule for it.

Case in point: 8 people and 4 dogs in 2 cabins.
They welcomed dogs as long as they didn’t bark while you were gone or tear up the cabin, pick up it’s droppings too. All common sense stuff.
Then the kicker. $75. cabin clean up PER dog. I asked them what the difference is if there was one, two or three dogs in a cabin. They said deeper cleaning. I called BS. At $150. extra per cabin, that was the last year we stayed at that resort.

I’m a little slanted toward resort owners. Don’t get me wrong, there are owners that not only say they want your business, but they walk the talk as well.

And this not only pertains to resort owners but guides, restaurants and pretty much everything.

No thanks.

A friend always wanted to buy a resort but he was blind to the work involved. When ever the topic comes up I am reminded about a story from a previous co-worker. After graduating from the Univ of St Thomas with an accounting degree she spent her first summer “doing laundry and burying dead minnows” working at her boyfriend’s family resort, from sun up to sun down.

It only lasted one summer for her.

One Of my best friends quit a high paying job and bought a resort. HE had it for 8 years. Then sold it as individual units. HE said he got his money back luckily. After having a resort he had 2 ecstatic days they day he took it over and they day he decided to sell out. He was open year round for snowmobilers etc in winter. He basically gave up fishing and hunting to run the place. His only time was it was sometimes slow in winter so he did a little ice fishing and had to take a 2nd job. He stayed in that are and drives school bus and fishes Bass tournaments and club events in the summer and is much happier.

Mwal

To mwal’s point above… I think some of the hourly people that work at resorts may come out ahead further financially than the owners. Plus they usually have set days off to go fishing or hunting…

Well I guess I will have to figure out something else to do when I win the lottery.

The resort I was talking about gave up the ghost after around 4 years and it went back to the owner. It was a contract for deed purchase.

Making a hobby your livelihood typically means you don’t have a hobby anymore too.

How many resort owners, fishing or other type guides do this anymore in their personal time?

Friend won a beer contest(making not drinking ). Major newspaper out west sponsored the deal. In the interview he was asked why don’t you switch from an engineering career to brewing. “I enjoy my hobby why turn it into work?”