HIP E91 Neil Dipaola - AutoCamp CEO

Neil DePalla never planned on running an outdoor hospitality brand. In 2012, he bought five wrecked air streams off Craigslist to use as a affordable housing in a Santa Barbara mobile home park. Until a neighbor offered him 300 bucks a night to stay in one instead. That accident became auto camp, a brand now partner with Hilton that's raised close to 300 million dollars and is chasing 10,000 rooms in the next decade. If you've ever wondered how to build and scale an outdoor hospitality brand, you're going to want to listen to this whole episode because Neil's going to break down exactly how he pulled it off. The Hotel Investor Playbook, your guide to building wealth and freedom through hotel and hospitality ownership. Welcome back to the Hotel Investor Playbook. I am Michael Russell, founder of Malama Capital and your host. On this podcast, we talk story about everything you need to know to make money, investing in hotels and hospitality assets. My guest today is Neil DePalla, the CEO of Auto Camp, a boutique outdoor hospitality brand, partnered with Hilton and Airstream. And if you haven't heard of Auto Camp, then you're probably living under rock because they are blowing up. Neil, welcome to the show. Thanks. Appreciate you having me today. My goal's great to be on. Yeah, I'm excited to unpack a lot of this. I want to start. So from your own website, Auto Camp is described as bringing high-end hospitality comfort to America's most iconic outdoor destinations. But in your own words, what is Auto Camp and what does it mean to you? We're an outdoor company and our goal is to make it easier for people to get outside. If you think about the last camping experience you had, the last outdoor experience you had, there's a lot of equipment that you need to get outdoors. If you're going camping, there's a lot of know-how to do the planning and a lot of discomfort typically associated with an outdoor experience, whether you're sleeping in a sleeping bag on the ground or setting up a tent. People have a lot of anxiety about whether there's going to be a shower or a suitable restroom. So what Auto Camp does is it takes all that friction out of the outdoor experience. You can really think of Auto Camp is just like a boutique hotel that is in some of the most beautiful like outdoor landscapes, like national parks, sea shores, forests in the United States. And it just makes the experience easy. So it makes getting outdoors with your family or with your spouse, your loved ones. Just as simple as booking a room at a hotel, checking in at the front desk, knowing you're going to have a really, really comfortable bed to sleep in, a beautiful bathroom, a spa sort of inspired shower experience and bathroom experience. None of the typical discomfort or friction that you typically associate in an outdoor experience. So we do that by providing these beautiful design forward accommodations. So we have a partnership with Airstream as you mentioned. We've got beautiful cabins, air streams, tents and lodge rooms on our properties. And it just kind of you open your door out your accommodation and you're in a national park and kind of some of the most iconic outdoor destinations. So I'll call it the spirit of camping. You've got a campfire and smores. The stuff that we love about camping trips, but none of the things that you don't love about camping trips. So I think that's Auto Camp in a nutshell. Yeah. In case someone's not familiar with the term air stream. I mean, basically this was like a silver bullet looking trailer, right? What separates an air stream from just like a regular old-ball home? Yes, I think air stream is probably one of the most recognizable and iconic outdoor products. They're really the standard for like luxury outdoor camping. And when you think of RVs, you can think of sort of the prowler travel trailer that I had as a kid, which are sort of these ugly white box trailers and an air stream. It's sort of the opposite of that sort of exudes comfort, luxury, nostalgia. And we chose to partner with with Airstream because that product really defines the American camping trip. And we felt that the design was iconic of mid-century design. And you know, I think when you think about the aluminum exterior of an air stream, it reflects nature back at you and you're standing at the doorway to an air stream. So when you're looking at an air stream, you're sort of looking at the nature all around you. And so we thought really provided a great a great canvas for us to build our hospitality platform with. Yeah, I mean, these things are custom made from what I understand. Like you have this, like you said, relationship with air stream, but the way that these are built out for someone that's not able to visualize this. I mean, it's a trailer, sure, but when you walk in, I mean, the visuals are incredible. You've got like the subway tile and the showers and you've got these beautiful linens covering what I presume to be tempered pietic beds. I mean, it is a full luxury experience inside the shell of like you said, this silver bullet camper. So I presume there's maybe not a cult following, but there's definitely like you said, nostalgia for this. I don't have a ton of experience with these, but I could see how you've positioned these as more of a luxury experience as opposed to this stigma of camping. In fact, in preparing for this podcast, I picked up that you don't, you know, like the word glamping. Is that right? That you prefer another term for this outer hospitality experience? Is that right? You know, I think in the American zeitgeist glamping does describe what we do, but I just think that in it invokes sort of the vision of like gnomes and flamingo lawn ornaments, I think glamping it's probably the correct term, but we prefer outdoor lodging or outdoor hospitality to describe the segment. And I think, you know, just debatailing off your comments about the air stream. So, yeah, air stream does produce their travel trailer, which is an RV, but we designed the inside and the outside with air stream. They now produce a custom unit for auto camp that's exclusive for our use and outdoor lodging. They're an investor in auto camp. We have an entire assembly line at their factory in Jackson station, Ohio, where they still produce other air stream models. And yeah, I mean, it's a, we have walnut flooring in our units, marble tiling in the in the bathroom and on the, on the walls. And so, nothing about the inside reminds you that you're in an RV. It really feels like you're in a St. Regis hotel room. And that's really important to our guest and really important to our, our platform that the experience is really, really comfortable to. And I think thinking about glamping again, glamping could mean a lot of different things. It could mean that you're on somebody's lawn or on a golf course lawn in a, in a bell tent. And our experience is very, very different than that. It truly is a hotel level experience with everything you'd expected a hotel, a front desk, a restaurant, meeting spaces, fast Wi-Fi, really, really nice amenities, pools, jacuzes, indoor outdoor fire pits in our clubhouse and at each spot at each hotel room. So yeah, nothing about it is clamping. I haven't stayed at one yet, but I am genuinely blown away by the appeal. And I told my wife yesterday, I was like, Oh, we got to go here. These things look killer. And this would be such a great thing for the family. So the way that you guys are positioning your product as differentiating it from just regular camping is clearly obvious. I could see why your company is performing so well. And I want to kind of transition into like some of the numbers here. I mean, let's talk about this year company. AutoCamp has now, according to the website, it's done over $150 million in lifetime revenue. And I think this year you're on pace to clear over 50 million just this year alone. So obviously, AutoCamp is one of the fastest growing brands in hospitality. I'd like to know in your opinion, what's actually driving that growth right now? I think for starters, there has been a really, really strong renewed interest in getting getting outdoors. I think this year is the 250th anniversary of the United States. And one way people honor that is with visits to the national parks. I mean, what could be more fitting and more American to celebrate the country's birthday and getting getting into the outdoors? I think that there's some other big trends that are driving people to seek kind of the like the solace and serenity of the of the outdoors. And we think AI. And I think the attachment that people have to their phones, the digital sort of addiction that we have has caused parents and loved ones to say, Hey, like we need to drop this and get outside and spend time together without the devices. So there's a bit of a digital detox that I think is happening. People understand that for kids being on iPad all the time isn't the best for learning for brain development. And so auto camp is is really the anecdote in a lot of ways making it really, really easy to get outside. So I think that's another driver sort of a macroeconomic trend. But like in the last couple of years, there've been some other really interesting drivers pushing people to auto camp and sort of the outdoor lodging industry overall. I'd say that sadly the war in Iran right now is made people a little bit weary about international travel, the price of gas. While it's increased the the price of automobile pump station, it's increased the price of aviation gas to a much higher extent. So tickets to fly whether it's across the country or to Europe or Asia, it's causing travelers and tourists to say, Hey, do I want to spend that much on an international trip right now? Or should I just take a trip in the US? And so I think again, the incremental cost of taking a road trip might be an extra 20 or $30 to the American consumer versus the incremental cost as a result of the inflated prices for gas on a airplane ticket might be thousands of dollars more per ticket. So we're really seeing a renewed interest this travel season in domestic trips by car rather than flights. So all that is really fueling the increased demand that auto camp seeing and I think we're going to see it or operators of drive to leisure are going to see that. you. I know you've got some of your operations in Hawaii. You guys might be benefiting to that from that from some extent because Hawaii is a domestic location, but you're probably not benefiting as much as if you're in the mainland and had hotel within two or three hour drive two from a major metro. Yeah, I'm surprised a bit by that answer because I would imagine that the people that are concerned about the cost of aviation or just the higher cost of gasoline might not be the ones that are necessarily pulled in the direction of the luxury accommodations that you guys provide because you're not the lowest price point. And I'm just I'm trying to connect between what you're saying about the cost of travel versus how you're marketing and positioning yourself within the market as more of a luxury stay. And those two seem to be disconnected. Can you kind of help reconcile that? Sure. I think that it's probably not accurate that auto camp is a luxury stay. Certainly not compared to a four seasons or an amon. It's definitely not that we don't have a concierge in the traditional sense. We don't have a bellboy bringing your luggage to your room. I think when you compare it to camping, it's a luxury experience. It's it's luxury outdoors. And that sense that you have a real bed. We have tempered pede mattresses and fine linens. But it's certainly not a high touch white glove experience. And so actually our price point is very reasonable when you look at us on average, you know, 365 day a year. Like if you look at us midweek or in our off season, it's a very approachable price point starting probably around $150 a night. So it's not a luxury price point. Now sure, if you want to stay with us on Memorial Day in Yosemite when there's extremely high demand coming both from domestic guests and there's international demand on a place like Yosemite also. So we're going to have a very high price point on that three day weekend or fourth of July, for example, it might be close to a thousand dollars a night. But that's just because we have so much demand on those nights. Wow. Thousand dollars a night. I didn't expect that. A thousand dollars a night for an air stream. Was that right? Yeah. For our most prime accommodation that might be depending on the property right on the river, right on a lake. That one of our properties might have ocean views, might have additional private space. We have some more upgraded accommodations called a base camp unit that basically pairs an air stream with a tent or other accommodations that allows it to be sort of the suite, if you will, that has multiple joining rooms and that lasts for a bigger family to enjoy it. So those units would be our highest price to accommodation. But also you're going to pay that price if you're booking a few nights before and we still have availability because we use demand-based pricing just like airline does. Yeah, of course. Yeah. Well, walk me through the overall footprint today. So how many locations are open and how many more are in the pipeline? Today we have nine locations and that's spread across our primary brand, which is called AutoCamp. And we do have a secondary or sister brand called field station, which plays more in traditional hospitality accommodations. We take outdoor adjacent limited services hotels and that in that brand and we convert them into sort of the outdoor kind of adventure seeker hotel. So yeah, we've got nine hotels in total and they're all across the the continental U.S. today on the west coast places like Yosemite, Joshua Tree, Sequoia National Park, Sonoma, and then on the east coast we've got cat skills in New York. We've got Cape Cod in Massachusetts outside of Boston. We've got Asheville in North Carolina. We've got a number of properties in Utah when years is Zion National Park. And so we got a pretty solid foothold across the U.S. right now. And so as pipeline goes we're filling in the gaps between the coasts. But the focus is really on the most visited national parks and outdoor areas. Proximate to major metros. So ideally, a guest is not driving more than four hours to get to one of our locations. Just making it easy for them to make this a nice long weekend and not have to buy a plane ticket to get to one of our properties. So most of our guests are coming from the closest major metro in terms of like that new new pipeline growth. We just opened in Asheville, North Carolina. Earlier this year in that property has been awesome. It's right on the cusp of the Great Smoky Mountains National Park on the Blue Ridge National Parkway. So it makes it really easy to get into the national park. In terms of what's next we've got a property in the hill country of Texas. So a short drive hour and a half from Austin and some of the other MMAs in that central Texas. Fredericksburg is where that property is located. It's through the wine country of Texas and hot destination for weddings and we think that'll be a really great location for us. Beyond that, we're looking at a lot of really interesting opportunities that we haven't announced yet. But one is in concert with some of the new artificial wave pool developers. I think it's really interesting segment as global warming makes ski areas a little bit more difficult to operate with sort of shorter seasons. I think you're going to see more and more of these wave pools popping up across the world as an alternative to cold weather destinations. You know, year round you can now have a comfortable experience and a wave pool with your family. And it's sort of a lot of similarities between kind of what ski areas have done to mountain destinations. You'll see with wave pools and destinations that might be comfortable to visit year round. And you've got a body of water to play in and with wave pools. You've got kind of this beachfront real estate on all sides of these wave pools. And here in Hawaii, you can dial the wave pool and turn it into like a wiki-key style family-friendly great kind of learn to surf beach break and you can also dial it up and make it into a professional level north shore pipeline style wave. So we think it's a really interesting opportunity for our camp to be involved in these unique, experiential opportunities around artificial waves and really unique way to stay as part of the world. You're speaking my love language, Neil. I mean, obviously I'm a lifelong surfer. I mean, that's where I go on vacation. The thing is with these wave pools, they need space, they need land, they need area. And so you can't necessarily just drop one in the center of a metro. You got to put it somewhere. And so far, some of these wave pools have been like out in the middle of nowhere. Like Kelly Slater's wave pool and I forget the town, but it's basically in central California. It's in the middle of nowhere. It kind of seems like the perfect combination of being able to experience nature and plop in a wave pool. But then people need somewhere to stay. And if you can align yourself with them, just like you've done with Hilton and Airstream and we'll get into that more. But I like the idea, man, you got my ears perked up. I'm curious. I think it's a pretty cool concept. So I do want to piggyback on the idea of growth though and kind of wear your head in the future. I want to ask you about, you know, on your website, it says that you're targeting 100 properties inside a decade with 10,000 rooms. Is there a reason why that number specifically? Is that tied to any kind of a real operating plan? Or did you just pick like a big hairy audacious goal? Your Norstar? Why that number? So our team gets together every year and does planning for the next 10 years. Right? So every year we inch closer and closer to that big hairy audacious goal. And as we've turned this business from a startup into a real, you know, operating institutionalized business, it's gotten more and more real. I'd say that with the pipeline that we currently have, just with organic growth, organic growth is where we buy a property, develop it into an auto camp or buy, you know, an existing glamping operation and convert it into, you know, branded auto camp experience. That can get us a long way towards that goal. The other way that we get towards that goal is through strategic mergers and acquisitions. And so there are a few other platforms that provide, you know, outdoor lodging experiences at scale. And, you know, increasingly we're looking at growth through, you know, some major platform acquisitions. And so it might seem like how do you get from, how do you get from 10 or 9 or 10 that we have right now to 100? Well, some of the growth is organic, one in two properties at a time or five or six per year. And some growth is 20 or 30 in a year when you look at some of the strategic M&A when you're buying a competitor, for example, that already has their operation scaled out. And then once you have M&A growth like that, then the pipeline growth, the organic pipeline growth gets to sort of grow a bit exponentially also because then you've got multiple brands for which to scale. So today we've got two brands without our camp and field station. But if we acquire a competitor that say has two brands or two or three brands attached to them, then you've got four or five different pipelines for which to grow and the scaling becomes incrementally easier. And so if we grow, that means that we can get more and more people outdoors and having these unique experiences that help them connect better with their family, help them detox from stress and the digital kind of the digital world that we're increasingly living in. And so the 100 properties actually started as how many people's lives do we want to influence? Can we influence with the experience that we provide the outdoors? And my big goal was like, I want to give 100 million people this experience. We sort of work backwards like how do you do that? How many properties? How many accommodations would it take to get 100 million people's lives influenced and kind of have better lives through life lived outdoors? I can relate to that. Your business model and the one that I run, they're different in terms, like sharing accommodations, I run hostels, but the unifying factor there is people are craving the connection with others. In this day of the digital world in which we live in where people are so often like you've referenced, attached to their phones, they're not actually forming real connections. It's so refreshing to get out of that bubble and connect with people. You're just doing it in a different way, but I totally relate to what you're saying. And it is extremely fulfilling as an an operator to know that the product you're putting into the world. is having a positive effect on humanity. So it is financial, but it is also to a degree, it's a little bit of a humanitarian type of effort because I mean, we've had people that have stayed with us that now have children. They met, they got married, they formed families, and to a degree, I'd like to take some credit for that developing because we created an atmosphere where they could come and connect. Let's shift gears here a little bit. So auto-campus received a lot of media coverage. It's been on the cover of Time Magazine. It's been one of the recognized by Fast Company as one of the most creative businesses to have written up in Bloomberg, Kondaynast, Forbes, National Geographic, the list goes on and on, Wall Street Journal. I just want to know, how does a company that puts people in airstreams end up with that kind of media attention? Like, is this a result of a deliberate PR machine or is this just a product of being extremely photogenic on social media? - Yeah, I think that if you zoom out, look at the brand. We really work hard to make sure that every detail is aesthetically beautiful and reflects the beauty of the natural environments that we're in. So I think there's just something like that's naturally photogenic about the beautiful environments that we're in, whether it's the granite peaks of Sequoia National Park or just some of the beautiful desert landscapes you get at, like a Joshua Tree. And so I think when you have beautiful nature and you pair that with deliberate thoughtful design, I think you get something that's beautiful, it's easy to publish, it's easy to write about. And I think we work with some of the nations most recognized architects and designers when we design our properties, our indoors and our architectural clubhouses. And so we always make sure that our clubhouse doors open all the way and sort of provide a living room to let the outdoors in. And so when you look at the airstreams that architectural clubhouses with the background of nature, they're just beautiful. But I think like one other element I'll say that I think makes AutoCamp so publishable or sort of newsworthy is that the airstreams themselves to provide I think an Instagrammable moment in a way that most hotel rooms don't. Like if you think about like the last Marriott stay that you had, like you probably didn't take a picture of yourself, like a selfie of yourself standing outside your hotel room. But when you come to AutoCamp, I promise that your wife is gonna want to take, or you, are gonna want to take a picture of yourself and your family outside your airstream. It's just like such an Instagrammable moment, such a unique experience that like people want to take pictures of it. And those pictures become like fodder for their Instagram grid. And it just, it's an experience that people want to capture and remember. So I think well, we have an incredible PR team. I think that it's just, it's really easy to get travel writers to want to come and stay at these properties. I think it's a great story about getting outdoors, getting out of the city, disconnecting. It's just like, it's easy for people to understand and connect with. Particularly people who don't like to go into the outdoors don't like to camp. I think that's like what's magical about AutoCamp or not for campers. We're actually for non-campers. And so we often, often see that in most relationships, you find opposites attract when spouse is more interested in getting outside than the other ones, more indoorsy. So to speak. And so we're for the indoorsy people that want like a really comfortable experience. They just want like the bite size dose of the outdoors in a really comfortable package. And so I think for a lot of people, that's why AutoCamp's so interesting. Like you can be not outdoors inclined and have just an incredible experience. And so there's a lot to write about. A lot of cognitive dissidents with like the AutoCamp experience. It's indoor, it's indoorsy friendly and outdoorsy friendly. It's designed forward. But you know, there's not much design needed when you're in these beautiful places. So there's just like a lot of like contrasts. And I think that's what makes AutoCamp so interesting. Hey guys, if you're getting value out of this conversation, do me a favor and take 30 seconds right now and leave me a review on Apple Podcast or Spotify. It literally takes half a minute, but it makes a huge difference in helping other hotel investors find the show. Okay, now back to the episode. AutoCamp's Instagram, it's pretty polished. I mean, I think you've got close to 400,000 followers. I mean, it's clearly driving bookings. But I wanna take a little turn here because I gotta share something with you that I think kind of caught me off guard and I wanna get your take on this. When scrolling through your page, I couldn't help but notice there were a couple of the most watched Instagram reels. Like I went and I filtered by view counts and a couple of reels popped up and I couldn't help but notice that these were reels that feature queer people. This could be a little controversial. I'm actually all for it. But I bring this up because I couldn't help but think, wow, hey, from a marketing perspective, that's a pretty bold call, especially for a brand who I would assume, you know, the core customer might skew a little more conservative. I'd like you to walk me through the thinking behind that. Like was this a value statement? Was this a marketing bet? Maybe a little bit of both. - Yeah, so I think one of our core values at AutoCamp is that everyone is welcome around the campfire and that goes for people, all sexual persuasions. It goes for people of all colors, all races. And I think you might not know the history behind the outdoors and national parks, but for a long time, believe it or not, in the US, not all people were welcome in national parks when the national parks were established, especially during segregation in the 50s. It was very scary to be a black person or a person of color in the national parks. And so one of our core values and one of our stated missions is to help make the outdoors more welcoming to everyone. And so beyond just people of color, there's a lot of people that historically have not been welcomed in the outdoor context. And so I think when I think about that statement, it's a bold one that all people are welcome around the campfire. What we're saying is that the most conservative person is welcome around our campfire and the most liberal person. They both welcome around our campfire. They both have an equal voice in the conversation. When I talked earlier about that experience of being around the circle, like telling stories with people, when you come to an AutoCamp property, you sit around your common campfires, you might see a retiree when they're 80s, sitting across from a tattoo-sleeved young Jen Xer. And so you see a broad range of people at an AutoCamp. We celebrate all these diverse backgrounds, and that's part of what makes our company so great. I think we employ people from a lot of different backgrounds, different persuasions, because we think everybody has a voice. And so we even try to bring that forward in the art that we put up in the walls that our property's showing people of all different color shapes, sizes, et cetera. And so with respect to the specifics on the LGBT community, I think there's been a lot of interest in AutoCamp from the LGBT community, because we're a very welcoming, we're a welcoming non-judgmental company that try to welcome all of our guests with the same empathy and hospitality. We welcome everybody, but we're certainly not focused on the LGBT community as a certain segment for us. It's just part of our overall user base, which is diverse, and we welcome all people. - I want to shift gears here a little bit. I want to talk about this, Hilton breakthrough. So, I think this is important, because I don't know if people fully recognize or appreciate how big of a deal this actually was. Maybe you can shed some light on this experience, but from what I understand, you were one of the first outdoor or experiential lodging companies to form a partnership with a major hospitality brand like Hilton. How did an eight or nine property company, hospitality brand like AutoCamp end up on Hilton's radar, and walk me through how that conversation even started, and ultimately developed into that partnership. - Well, as we've discussed, the AutoCamp experience is very unique, it's experiential, but it's also institutional, I think, for folks who have stated Airbnb's or you operate Airbnb's, you know that the Airbnb experience can vary dramatically from one to the next. You can have a really incredible experience, and you can have a different kind of experience sometimes. I think what makes AutoCamp so unique is that it's experiential and it's consistent and institutional, and as a result, we certainly caught the tension of some of the major C-corp's, Hilton, Marriott, IHG, and Hyatt, and I think there was a strong interest from them and wanting to be able to compete with Airbnb experiences. Airbnb is now the largest hotel company in the world, and so how can a C-corp, like Marriott or Hilton, compete with that experience that is unique to Airbnb, and so I think they're looking at AutoCamp and saying, "Hey, this truly is a unique and special experience. It would be tough for Hilton to recreate the brand AutoCamp." And so, but they says, "How can we partner with a group that's already doing it in a high-quality institutional way? How can we give our, in the case of Hilton, who's our partner, our 200 million Hilton Honors members, a really unique experience?" And so, we got a call from the Hilton team. The same time, we actually got a call from the Marriott team, and they said, "We want to talk to you. We want to come stay at some of your properties." And, Kristen has said, "Actually, came out to visit Kristen said as the CEO of Hilton. Actually, came out to stay at some of our properties, and got to meet his C-suite team and fly around with them to visit some of our properties." And we really hit it off. We felt there was good chemistry. We felt like exposing 200 million Hilton Honors members to AutoCamp would be a great thing for AutoCamp and for our occupancy and demand. And Hilton really felt that we were the best in class operator of outdoor lodging and that we were the group to partner with them. And so, yeah, we were the first group to partner with a major C-Corp, but we really led the way because that-- After we announced our partnership with Hilton, hired an ounce of partnership with one of our competitors within six months, and then within six months of that, Marriott announced that they were standing up their outdoor lodging portfolio, which they call, I think Marriott outdoors or Bon Voy outdoors. So we really led the way with that, and our partnership with Hilton has been incredible in terms of the amount of not just earned PR, we've received from that partnership, but Hilton's been a great partner in investing in really unique opportunities for us from Paris Hilton endorsing Auto Camp on podcasts and in some of her appearances, visits to Auto Camp to a TV commercial that Hilton made for us, advertising the unique ways to stay at our properties. It's really been an incredible partnership and just the incremental increase in guests and demand from Hilton has been substantial. I think Hilton recently shared that our bookings through Hilton.com are up 30% year over year, so that has a substantial impact on our business, and they're, again, it couldn't underscore how great a partner they've been in doing what they said they do, which is increased the incremental revenue to our properties and we're really proud of the affiliation with Hilton. - Yeah, can I ask about that? I mean, I'm sure that there's some details you can't share, but I gotta ask, what exactly is the partnership? Like you list your properties through in their internal booking engine, they presumably charge a commission for that. Do they have any ownership interest in Auto Camp or is it simply like you're a soft brand in which you pay them a marketing commission? - Yeah, well, I can't get into the particular commercial details of the partnership, but what I can say is that in virtue of being partners, Hilton loyalty members get to use their points to book in Auto Camp stays. They earn points when they stay at an Auto Camp property and we pay Hilton for some of that traffic and some of the commercial business that they deliver are funnels. So they market Auto Camp on their website. We treat the Hilton Honors guests really special when they come to our properties with added perks and amenities when they come and visit. And as a result, more and more eyeballs are on Auto Camp brand and you could look at it as commercial partnership with them that again helps Auto Camp meet more guests and helps. Hilton's honors members have access to a really unique way to stay that they wouldn't otherwise have. And it's a big benefit to them being able to earn and redeem points at a place like Auto Camp, which is very different than the rest of Hilton's portfolio offering. You know, in terms, I can say that Hilton is not an investor in Auto Camp, but they, like I said, they're a terrific commercial partner of ours. - I wanna zoom out here for a second because I wanna talk about how this thing started like the genesis of Auto Camp. Maybe we can go back to the beginning and kind of tell the story. This was back in 2012, I believe, when you bought a small RV park in Santa Barbara. What was the original idea? It wasn't a hotel brand, right? It was affordable housing if I'm not mistaken. What were you trying to do back then? And then how did it ultimately turn into Auto Camp? - My company was focused on developing both student housing and true capital A affordable housing. So affordable housing is housing that's built at kind of a, it's built to be rented at a restricted price point. So we were developing brick and mortar affordable housing and as part of that strategy, we also purchased a mobile home park and the mobile home park had 50 or so mobile home spaces. And when we purchased it, there were five vacant spaces. And my idea was to find some manufactured housing that was well designed and would be a great place for nurses, firefighters, teachers to rent for a long term affordable housing. And as I looked into the different manufactured options, I found a picture of an air stream and I said, "Huh, wouldn't this be an interesting sort of design forward statement if we had air stream affordable housing in this case, the mobile home park was in Santa Barbara?" And so I found a listing on Craigslist for five old air streams. They were in the high desert. I went to go look at them. They were in really, really rough shape. I mean, look like they've been cooking crack in one of them and another one was just like. In such rough condition, I said, "I'll take them." And we hauled them back to Santa Barbara and partnered with an architect who specialized in air stream renovations. And we put these air streams in the front of the mobile home park so you could see them from the street. We polished the exterior, we renovated the inside. One of them had a cloth foot tub in it. Another one had a rain shower. They're just, they're really interesting specimens. And as we renovated the air streams on the property, and as we did that, we also gave the property a bit of a facelift to just with landscaping and new hardscape. Getting them ready, of course, for long term tenants. But as we were doing that, the neighborhood around this mobile home park took notice and we'd have neighbors stopping by and ask what we were doing. And yeah, this is in 2011, 2012. And we have one neighbor say, "Hey, I love air streams and my father-in-law loves them too." And he's actually coming to stay next week. Is there any way he could stay in an air stream rather than the extra room in our house? And we said, "No, no, this is really for affordable housing. It's not meant for short-term rental." And that neighbor said, "Well, what if we paid you $300 a night?" And I said, "Then absolutely stay in one of these air streams for $300 a night because the affordable rents in that mobile home park were $400, $500 for the entire month." So in one night, or starting two nights, one weekend, we're gonna get more income than we were getting for one of those spaces for the entire month. So this is like early in the Airbnb story, like people hadn't even really heard of Airbnb yet in 2012. In short-term rentals were a thing, but they weren't really a thing. And we had other inquiries for short-term rental of our streams after this and it started to become sort of a local thing. And we started renting them on a short-term basis rather than our original plan, which was to rent them in a long term. What that ultimately allowed us to do was ensure that the other affordable spaces, the other 45 spaces, were kept at true affordable rates. And we put people to work who lived in those other spaces, the mobile home community, to work in our hotel or short-term rental operation. They were welcoming guests, they were taking reservations, they were doing landscape maintenance, they were fixing one of the air streams when something broke and inevitably they did because these were old, old air streams and like any old classic car, there's a lot of things that break. So we needed the help of the team that was there living on site in the rest of the mobile home park community to help us run the operation. So after we set up a website, it started offering these short-term stays. We got a lot of natural interest from the press. There's an article on Sunset Magazine about the five air streams, vintage air streams and Santa Barbara that you could rent. There was an article in the Los Angeles Times that they were one of the SF Chronicle. And then it was on. We started to have real demand to stay at our five units and for three or four years, we enjoyed this little business within a business which was kind of short-term rental business inside the Santa Barbara RV park or Santa Barbara Auto Camp, which was the historical name of this property, Santa Barbara Auto Camp. We've been operating as a campground, mobile home park since the 30s as a place for kind of visitors to Santa Barbara to stay in and this was sort of the next chapter of that. I was slow to recognize the business opportunity that Auto Camp presented because I was content at the time to just have our five units but at some point, I said, wow, this is incredible. Now five units are generating more revenue than the other 45 spaces in this mobile home park. We should probably look at expanding this business. And so right there is sort of a core lesson. Sometimes you really have to look and listen and see, you might have one business idea or one business model in mind, but there might be an opportunity to pivot. And so that was the moment where I had an intern who is our sort of marketing intern, who's a UCSB student at the time. I said, I'm gonna pay you to go drive around California and find the next Auto Camp property, one that we can build from scratch with everything we've learned about the five units that we've got inside paid our intern to go drive around and find the next Auto Camp, which became our Sonoma Russian River property, which he found in Gernville on the Russian River. This property cost the second Auto Camp property cost us $500,000 and became kind of the model property for our institutional rollout of the next eight properties. - Well, I love that from relatively a humble start that this thing has ballooned into this national phenomenon. It's incredible, sometimes, like you don't have the whole map worked out exactly how you're gonna get to the destination, but in hindsight, it does kind of seem almost in with respect, like pretty obvious, right? Like now having hindsight, it's relatively from an outsider's perspective, a simple product, a simple business model. You've got nice air streams, you've got good linens, you've got the fire pit, you've got the common areas. I'd like to understand, I guess, what's stopping someone with capital from maybe copying this business model? Is there any kind of barrier to entry or any sort of competitive mode that your company has that can kind of separate it from the competition? - Absolutely, and it starts with our team. We've been able to attract some of the best talent in the hospitality industry, and I say that broadly, I'd say both the hospitality industry and the outdoor industry, because we've got such a unique and such a lovable product. So our COO and head of operations was the COO of another major outdoor brand. He's also an executive at all of the, both Hilton, Marriott and IHG. Also has just incredible experience in hotel operations. So there's just one example, but our chief of marketing brand and commercial was with Starwood and launched the W. Brands. We've got alumni from the four seasons hotels. We've got head-agreed with a variety of outdoor brands, including an experiential brands, including Great Wolf Lodge, K.O.A., Campgrounds of America, R.E.I. So we tried to get the best of the best from the hotel industry, the best of the best from the outdoor industry, and our team is just absolutely first class. I think that's hard to replicate. It's hard to get great people like that. They have pedigrees like they do, experiences like they do, unless you built a really great brand and have a lot of momentum. Well, you also need a lot of money. It's hard to cut you off, but I'm a listener here and I'm thinking, "Well, I'm going to start my own air-stream company right now. I just have to take a minute to reinforce where you just described when you're referencing people with years of industry experience and some of the top brands. There are skill sets that are learned and the nuances of offering and experience that not anyone can do. These are learned skills and you went out and you bought the best of the best. I bring this up because look at my own experience in building a company. It's natural to gravitate towards hiring more affordable options and you've taken a different approach in hiring the best of the best is not cheap. We can get into the amount of capital that you've raised, but I had to put a spotlight on that because my question was centered around how do you distinguish yourselves from others and your answer was, "Well, it's our team." We hired the best who have the experience and the skills to offer to create a product that is world-class. I didn't want that moment to pass without recognizing that there's a real distinction between anyone doing this and the way that you've done it with a world-class team. I appreciate that, but it's not all about the money you pay them. I think a lot of our team members were attracted to auto-camp, not because we could pay more than anyone else and we can't. Trust me, we can't pay our team as much as they would or are going to work at the four seasons or going to work for Mary-Other Hilton. But they are attracted to us because of our culture and the type of company that we are and what our mission is and that's what people on our team say when you ask them why they work for us. I guarantee it's not because we pay the most. We can pay people in different currencies like stock because our company is really growing and there's a big opportunity there. But trust me, it's not the money that people will say when you ask them why they work here. But I think to your initial question about our competitive mode, you reference, like, couldn't somebody else just buy airstreams and cabins and start a business? They can't. But what we do have our mode is a unique partnership we have with airstream that prohibits other would want to be copycats from buying airstreams. I mean, sure you could go buy them on Craigslist like I did when we started because there's certainly a secondary market for airstreams. But what makes I think our product unique now airstream produces our units and their factory to our specs and it's really a wonderful product that we have. And if you wanted to go buy airstreams from the factory at scale, you wouldn't be able to because of our exclusive with airstream. They are an investor in AutoCamp. So when AutoCamp grows, we buy more airstreams from them and we're the best marketing platform for airstream that you could have, you know, really lifting the brand up. So airstream is a competitive mode for us. We've got the first mover advantage and that we've been doing this now for more than 10 years. So we've got over a million stays and we've got, you know, an unbelievable repeat guest program. We're going to be parlaying that into a loyalty program here in the next year. So something that we're working on, just really formalizing recognition and perks for guests who've stayed with us at multiple locations, you know, for multiple, multiple occasions over the over the last 10 years. It's really exciting to hear from those guests. And that's again, a really important competitive mode where you've got people staying over and over again. Every time we open a new property being first to book at new locations, it really shows you how much of an experience we've built into our product. Well, you touched earlier about the current market and how maybe less international travel is putting a little air underneath their wings here, but there's skeptics out there. There's people that are not fully bought into this category of hospitality. I mean, some people would say that alter lodging was just a pandemic phase that people got tired of being cooped up in their apartments and then camping spiked and then, you know, as demand normalizes that this is a particular segment that might start to fade or drop off. I mean, what do you say to that? Can you defend your business model? Why is this not a trend? Or why is this here for the long haul? Well, I think that fundamentally the outdoors is here to stay. The National Parks, the best American invention. And I think it's important for people to get out and visit them. And I think it's not a want. It's a need that people have to spend time in the outdoors to feel whole, to relieve stress. So, no, I don't think it's a trend. I think that camping and outdoor experiences are just a fundamental part of the human experience that experience it being around a campfire. Yes, the pandemic brought a lot of attention to that basic human need when people were cooped up indoors in their homes, especially in places like California or quarantine, like was in Hawaii during that time. People really realized that they needed to be outdoors and our demand did spike during the pandemic because people weren't allowed to stay in hotels and so our product provided a sort of safe alternative to get outdoors without sharing hallways or HVAC with other people. And so in the years since the pandemic, our demand has continued to increase and we're looking at least 10 to 15% year-over-year growth in the last 12 months. So in addition to the new guests that our Hilton partnership has brought in, Gandhar, just our marketing engine and Pete Gas, we continue to see substantial year-over-year growth. In a lot of our markets where RevPar has only grown or maybe has grown negatively, we continue to really uppace the growth. I think it's just because in the years since the pandemic, when the pendulum sort of swung the other way, people couldn't fly on airplanes during the pandemic. So when the world opened up, kind of 22, 2023, people got an airplanes again. They visited a lot of international destinations and for some of the reasons I talked about earlier in our conversation, I think the last 12 or 24 months people are like, "I haven't been to the national parks in a while. It's been a while since I've taken a drive to your trip with my family and so we're really seeing a tremendous amount of demand in the last 12 or 18 months." I think that the amount of capital that you've raised is testament to that people are placing bets, not just on auto-camp, but in the industry as a whole, we've seen the other brands that you've referenced, Marriott and Hayam, for example, that are developing similar brands. Maybe can you share, like, to date, how much capital has auto-camp raised? Both from institutional investors and private capital, like, how much money have you guys raised? I was a start by saying, like, from the beginning, we tried to grow auto-camp in a really sustainable way and we didn't want growth or capital to impact the guest experience and sort of the core brand. So we've been really, really deliberate not to dilute that as we've grown and as we go through our next phase of growth. That's really number one on my list of priorities, making sure the brand stays great. The guest experience stays great. In terms of capital, it is very expensive to buy a land, develop it into a hotel. Even though our hotel looks different, in a different format than the traditional hotel, it's expensive. The land is expensive. The infrastructure is expensive. And in some cases, we're building our sewer utility systems, water utility systems, digging your own wells, creating advanced wastewater treatment systems, bringing in solar and photo electricity, to generate electricity, connecting to the grid, bringing in Wi-Fi to our properties. It's all expensive, especially in some of the remote destinations we're in. So building the properties themselves and buying them, we own all of them in real estate in our prop code, which is set. We have a prop code and a brand code and an op code, so sort of three different companies that also, you don't lease any property. We don't lease any property. We own all of our properties today. And so it's very capital intensive. And we learned early on that we can only bootstrap the company so far when we are going to be purchasing land and purchasing accommodations and developing these. So I think to date, we've probably raised in terms of debt and equity into the real estate segment to the business. About around $300 million, $250 to $300 million on with the properties that we own and are scaled out in terms of the brand. I'd say we've raised a considerable amount of growth capital that's funding our ongoing operations and our institutional platform roll out with some of them. And a that I describe that we're doing the brand code doesn't need the same amount of capital that the real estate does. The brand code earns ongoing fees for the brands and historically the management of the properties. And it employs much fewer people than are employed on the properties which operate the business and it are employees of the properties. So yeah, we've raised capital from some incredible partners both on the friends and family side and on the more institutional side. So one of our investors is called Whitman Peterson and they've been sort of a 9010 equity investor on the real estate to date. They've been terrific and then we've worked with GaWl Capital. Can I unpack that 9010? So they own 90 and then you guys retain 10% is that correct? On the real estate. Yeah, so through their investment vehicles they own 90% of the real estate, we own 10% of real estate through our friends and family co-invest. with them and then this the properties perform and hit certain hurdles. We have the opportunities sort of have outsized financial ownership or outsize or financial or an outside financial proceeds. If the properties are successful financially. Okay. So you've got you reference the prop code, the op code. There might have been one other code brand code the brand code. Okay. I know that right now if investors retail investors, so individuals would like to have an ownership stake in auto camp, that is possible. They can actually invest in smaller increments than perhaps what a traditional real estate syndication would require $50,000 on up. What's the minimum investment that someone can make right now? And also what are they actually investing into? Which part of those three different parts of your company do they actually gain ownership to? Yeah. So as our community has grown over the last 10 years, I think we've had over a million, a million guests. We frequently had questions from our guests saying, hey, we love this brand. How can we be, how can we invest in it? And for a long time, we didn't have a solution for them. You had to be an accredited investor. You had to be an institutional investor, deploying major capital, or to be able to invest. And then the opportunity to partner with deal maker, who's our broker dealer in the capital arrays that you're referencing, it gave us the opportunity to raise money from our community through what's called a CF capital raise. It's an SEC regulated registered investment. It's called a SEC CF. And our guests or fans of the brand can invest as little as $1,000 to become owners, investors in the brand co, which is AutoCamp, which owns all the intellectual property in licensing rights for the AutoCamp brand. So we are licensing fees and royalties, eventually we'll will franchise the brand as we look at the M&A opportunities if we acquire other brands that'll all be held in that brand co. So it's this asset light vehicle that promotes the brand, operates the website for where the bookings occur and earns these fees. So it's this really unique opportunity now that anyone, whether you're accredited or not, all retail investors can can invest and be part of the story. And I really think if you're an investor in something you're more vested in its success and growth. And so we've already seen where guests have made an investment. Past guests have said like I had an amazing experience. I got married at one of the AutoCamp properties. I wanted to be part of the story. I wanted to be part of the growth story. And it's really moving to have all these guests put their money where their mouth is. Not just be repeat guests, not just be brand advocates, but now be owners of the brand. It just, I think is the next evolution in the economy. And when you love a brand, identify it early as an up and comeer, being able to go and invest in it. We're not a public company in the true sense for, we're listed on an exchange. But through this SEC reg CF, we sort of been able to do what's really effectively a mini IPO, giving our guests and promoters the opportunity to be invested. Yeah, well, when I learned about the fact that you're offering retail investors to invest in relatively small increments, my first question was like, why the heck would you do that? I mean, it's just so much easier to go get big lump sum checks from institutional capital. You've kind of answered that. You feel that this is like the next iteration of the way that people take ownership. They have pride in ownership. They want to be part of something. That's not just a financial purpose, that's meaningful for them. So I get that. But also, if I'm going to stoop investor, I want to know how I get my money back. And so for someone that invest in the brand co, as you said, as an investor, what is the exit strategy? Are there dependent on auto camp to be acquired? Or are you guys intending eventually to do an IPO? Yeah, there's real risk in any investment, especially when you're talking about startup or early stage company investing. So there's real risks and those risks. And I'll be found in the documents we've published with the SEC. You can see those on our website. It's a form C that we've filed with the SEC. So investment doesn't come with that risk. Yeah, that said, we have a real ambition to continue growing the company. We talked about our goal to grow the company to 100 properties in the next 10 years. And we see a variety of exits. I think most notably, maybe most obviously, we've partnered with Hilton. The other C corpse like Hilton, I say C corpse, I'm talking about the major hotel flags, Hilton, Marriott, Intercontinental Hotel Group, a core, a high it. All those companies are interested in giving their guests experiences. And I'd say there's a likely future where there's an opportunity to buy auto camp one day where we have enough scale where it's interesting enough for one of those companies to acquire us. And so as I look out to the next kind of next 10 years, I definitely see that as one of our potential exits. If we can scale large enough, there's also a potential to have a real IPO that's in the form of a reach, whether that's in form, kind of a our merger style IPO with other groups who are in our space. And those types of transactions I'm describing will have more liquidity than an investment in the company does today because we're a private company today. But beyond that, I think if you build a valuable company that has very high consumer sediment, our guests love auto camp and that's reflected in the really high net promoter score that we have. And you build a profitable company, then you're going to have interested suitors when it comes time to monetize it, recapitalize it or buy it. And we certainly wouldn't be asking people to invest if we didn't see a meaningful, a very real path towards an exit, a reasonable amount of time. And so yeah, definitely that while we can't promise any outcome or that you'll even make money investing in auto camp, I sure, I sure believe in hope that we will be able to please our investors and reward them for taking the risk on us and deliver really outsized returns as we as we continue growing the company and scaling. I think we're in the early innings of our scaling. We've in the US alone, we've identified well over 100 opportunities. And if you add international opportunities to that, you potentially have thousands of opportunities to grow, expand the brand. So we really think we're in the early innings of our growth and have a very open ocean for which to deliver value to our shareholders. Yeah, I mean, the takeaway for listeners that are kind of listening to what you're saying is, look, you've set up the real estate company and the property management company and then you've got the brand company and you've got different exits. Now, you don't have as much ownership in the real estate. Most of that is, I guess, control, well, I guess belongs, the lion's share belongs to the capital contributor, the investor for that. But if you're thinking about setting up your own personal brand now or your own business, I should say, it's wise to set up the brand as a separate entity from the real estate for the purpose that you could then divest of each aspect individually. We're kind of looking at that right now. Like, what's the value of housing hostels? Well, we have a brand. We have locations, multiple locations. But the real estate, we could hold on, and that could be a legacy property that passes down to our family indefinitely and someone else could operate the brand and the operations. And those things can be divested individually and I just, I want to bring this home to someone listening to this and how it might relate to them and what they're building now because I know a lot of the listeners have really awesome brands, maybe not nationally recognized like yours is and maybe it's not to the same scale. But I think the takeaway is understanding the different off ramps of what you're building at the time that you're doing so and being strategic and figuring out, well, okay, what is my exit down the road? I do want to just as we kind of land this thing here and wrap this up. I want to just ask personally about your life as a CEO. I mean, when I think about the amount of responsibility and the workload, it's a lot. And I'm just wondering like to put simply like, do you actually enjoy being a CEO? Like if so, like what's the best part? Maybe that no one sees that you enjoy or like maybe on the flip side of that, maybe what's something that you don't love about being a CEO. Shots a light on that experience. So yeah, to your point, I think for people who are just getting into hotel investing and thinking about starting their own brand or hotel operation or purchasing real estate to do that, I think the most capital intensive way to buy or the most capital intensive part is the real estate part, right? And then the brand is actually sort of free once you've developed it because it's the brand is really just sort of an idea and a set of guidelines and logo and the way of doing things, but it can have tremendous value. So brands cost less but have more value real estate costs more and has somewhat inherent value and it's more insulated, I guess, from losing value. So maybe less risk with real estate, more capital, more risk with brand, but less capital. And I think it's really wise. So the former CEO of Kimpton Hotels, which is a really great success story, told me early on after I after I stocked him and got him to take a meeting with me and said really what you really want to be looking at creating a brand co management co and real estate co early on, it's much harder to break those out later than it is to start with them separate. So it's easy to combine them at a point in time if there's ever a reason to combine them and roll them in, but it's really hard if you start the company with a combined entity. And so it takes a lot more legal work and accounting to keep everything separate, but I think it's good practice to do that. If you think you've got a great brand, keep that brand co separate. So being the Being a CEO, so I'm a unique CEO and that I'm a founder CEO, I think that I've got 1,000 creative ideas in the given day and only one good idea, maybe a day or maybe one good idea a month. So it helps me to have a really great operating team that can tell me when I've got a great idea and when I don't, they can help operationalize the good ones in a way that's repeatable and kind of in line with our SOPs and standardization processes. And so on any given day, I could be doing a lot of different things. It's really a disciplinary job. I could be working on growth, working with a partner like REI, working with a partner like Rivian on a marketing event that we're going to be doing. I could be dealing with a high profile guest on a property and making sure they're properly taking care of. And on that same day, it could be giving design feedback on a new property we're looking at developing and trying to optimize for design and cost efficiency. So definitely working a lot with a lot of different parts of the brain. So I like being the CEO. I love our brand. I think we got an amazing culture. I think we got an amazing, amazing product. But it's stressful. It takes a lot and you know it from being in the hospitality industry. There's a lot of exciting opportunities that keep you up at night. There's a lot of potential for any part of the system, even a well-weld machine to break down when you least expect it. We're operating 24 hour businesses that don't sleep. We've got people on the properties all hours in rural areas that you know, when you have a power outage at a site and lose contact with a property, you need to have a backup. We have satellite backups that a lot of our properties so we can reach our properties in our guests when we-- we've had wildfires near our properties. We've had hurricanes at our properties. So a lot of that stuff pops up when you least expect it and can't keep you up at night as a CEO. Luckily, we've never lost a property in a wildfire or had any major calamities at a property. There's never been any loss of life at a property. But certainly those things happen when people are at your property. When you've got hundreds or thousands of people staying at your property, properties on any given night, things happen. People have heart attacks. And so that's just reality being in hospitality. It's a complex business with a lot of moving parts and a lot of potential for things to go awry. So that's why we've got great institutional standard operating procedures, really great team that I talked about, and a lot of planning for when things do they're wrong. We've got emergency preparedness plans and we go through those on a annual and semi-annual basis to make sure we can evacuate a property if there's a natural disaster. And we can do so in a way that's professional. It makes our guests feel well taken care of and know that our team has a plan for them. So yeah, I'll also know it's stressful at times. - Yeah, Neil, thank you for coming on the show. I appreciate you sharing the AutoCamp story. If our listeners have an interest in becoming an owner to some degree in investing in AutoCamp, how can they do so? - If you're inspired by the story and it would be humbled to have your listeners look at becoming investors in AutoCamp platform, you can visit our website, it's autocamp.com and up at the top bar there's an option for investors to get more information about the investment. You just click on that invest now link and you can learn all about what it takes to become an investor. That's a pretty easy checkout process. What's the you decide? And if investing isn't right for you right now, we would be grateful to have your listeners who maybe haven't heard of us or have heard of us but haven't stayed, come visit us. Maybe we can even offer a special code for your guests to get a discount on their first day, which we can provide and you can list in the text of the broadcast. - Yeah, so share the code, we'll put it in the show notes and you've heard of listeners at the place. I mean, they're awesome, I'm sold, I'm a fan. I love having you on, I love your story. I wish you the best of luck. I am Michael Russell, he is Neil DiPala and we are signing off on another episode of the Hotel Investor Playbook. We will catch you again next week, a loha. (upbeat music) (upbeat music)