Summit Hotel Properties backs Austin glamping startup
REIT snags 90 percent stake in Fredericksburg campground, with chance to invest in future developments
Summit Hotel Properties is betting that the future of luxury hospitality isn’t a beachside resort or ski chalet, but a treehouse.
The $818 million real estate investment trust acquired a 90 percent stake in Onera Fredericksburg, a high-end “glamping” resort in the Texas Hill Country. The REIT paid $5.2 million for the stake and a 90 percent share of a 6.4-acre adjacent parcel, where it plans to expand the resort, according to financial disclosure filings.
The resort includes 11 individual “treehouses,” but that’s a misnomer — the treehouses resemble your backyard box-in-the-branches about as much as a lion resembles a house cat. The treehouses are modern, standalone apartments with amenities like private pools and floor-to-ceiling windows. Gone are good old room numbers — each treehouse has a name, like “Monarch” or “Spyglass.”
The experience doesn’t come cheap: A two-night weekend stay in mid-December would cost between $1,500 and $2,300, according to Onera’s booking page. The company is aiming for the highest end of the “glamping” market, according to founder Jon Cole.
Onera began as a “side hustle” during the pandemic, Cole said. As people sought travel opportunities that were safer — outdoors, isolated from other travelers — their horizons expanded. People who normally wouldn’t stay outside of the Ritz began “glamping,” travel that combines luxury amenities with the more pandemic-friendly environs of a campsite.
“You couldn’t even see them in sandals, but they all discovered upstate New York during Covid,” Cole said.
Fredericksburg plays a similar role to Austin as the Catskills do for New York City. The town, once the centerpiece of a failed effort to establish a German colony in Texas, sits at the center of Texas Wine Country, with dozens of vineyards a short drive from the Onera site. In recent years, the Hill Country has seen an influx of wealthy buyers seeking second homes and retirement compounds.
Cole says Onera is planning 10 properties similar to the Fredericksburg resort. It has broken ground on a second site in Wimberley, another Hill Country idyll not far from Austin. While Cole declined to name the other markets into which he hopes to expand, he said they are similar “destinations that have been found out during Covid.”
As part of the deal, Summit will have the chance to take 90 percent stakes in the future developments. A recent report from CBRE found that luxury hotel assets like Onera’s are uniquely poised within hospitality as a hedge against inflation.
Of course, success is anything but a guarantee, particularly for a hospitality startup at a time that has proven difficult for startups and hospitality businesses, and a $5.2 million investment is a rounding error for a REIT the size of Summit. But it is still a major investment for an early-stage company that claims to have a new formula for tapping the high-end market in a post-pandemic world.