The Hospitality Startup That Wants to Make a Business Out of Luxury Pop-Up Hotels

When Peter Mack was working as vice president of product design and innovation in 2014 for Tough Mudder, the notoriously challenging obstacle course/mud run, he had an epiphany in the middle of one of the races.

The former Starwood Hotels & Resorts veteran of 10 years realized that because these mud runs often take place in rural, remote locations, many participants had to stay in less-than-ideal lodgings: Ones that were often far from the course, and overly expensive because the hotels knew they could charge more when the Tough Mudder was in town.

“We do all of our registration in tents,” Mack said. “We do all of our medical in tents. Why can’t we do a hotel right here in tents and make it a much better experience on property?”

That realization led to Mack’s departure from Tough Mudder in 2014 and since then, he’s been working to develop Collective Retreats, specializing in mobile accommodations.

Mack, the co-founder and CEO, initially self-funded the company and opened its first location in Vail, Colorado on the side of a mountain. The first property involved a set-up of four luxury tents and Mack served as the inaugural general manager.

In the glamping vein, the tents aren’t your average tents, either. They come with 1,500-thread-count sheets, chandeliers, coffee service, an en-suite bathroom, and housekeeping services. There’s Wi-Fi, but no TVs, and there’s an on-site restaurant and the ability to book in-tent spa experiences.

“We have the reliability of a five-star hotel, but the local, authentic, indigenous nature of what you’d find from something more like Airbnb,” Mack said.

Makarand Mody, assistant professor of hospitality marketing at the Boston University School of Hospitality Administration, said he thinks this combination of attributes has the potential for staying power.

“They’ve taken the idea of glamping and added their own touches to it to try and tap into what the modern traveler is seeking out in terms of a travel experience — the various dimensions of the travel experience such as novelty/surprise, localness, community, escapism, aesthetics, and entertainment,” Mody  said. “I feel like the concept probably is and will continue to have some initial traction. However, it’s keeping up the momentum in terms of the scalability of the concept both from a supply and demand perspective that is going to be a challenge.”

Following Vail, Collective Retreats expanded to Yellowstone (technically in Big Sky, Montana) as well, and now the camps accommodate anywhere from 10 to 20 tents. The company is also planning to expand its locations to California’s Sonoma, New York’s Hudson Valley, and Texas Hill Country.

Nightly rates average around $500. Mack said the company will eventually expand to include treehouses and even Airstream trailers.

“My goal is, if we do a good job, five years from now we’ll have a retreat in Central Park, in the Metropolitan Museum,” Mack said. “We’ll be in all these places where people otherwise can’t stay and that their stay becomes part of the experience instead of ‘I stay here and I do stuff there.'”

A New Hospitality Business Model?

Mack said what makes Collective Retreats different is that it’s upending the traditional hotel business model of being asset-light. While hotel-management companies like Marriott and Hilton also take an “asset-light” approach to their businesses, meaning they try not to own the actual hotels they manage, Collective Retreats is also doing that, in a way.

The company doesn’t own the property or land that where its tents reside, but it does own the tents, which give it a flexible portfolio of accommodations to offer to guests. Instead, the company strikes deals with land or property owners to be able to place its tents, and it’s using the money it’s raising to invest in the guest experience.

Collective Retreats  isn’t the only hospitality company entering the glamping arena, however. Some rustic resorts have been offering glamping options for many years. Marriott also recently announced it would enable its loyalty members to book “safari tents” outfitted to resemble eight of its own lifestyle brands during the second weekend of the popular Coachella festival next month. It’s an event-specific installation, but similar to Collective Retreats’ model for mobile accommodations.

A rendering of the Autograph Collection-styled safari tent that Marriott will have at Coachella for SPG and Marriott Rewards members to book. / Marriott International

Travel Veterans as Investors

Some of Collective Retreats’ still-modest funding comes some fairly prominent investors, including Sam Shank, founder and CEO of Hotel Tonight; Evan Frank, co-founder and CEO of onefinestay; and Brad Gerstner, founder and CEO of Altimeter Capital. Collective Retreats raised $560,000 and was trying to attract $2.5 million in funding, according to an April 2016 Securities and Exchange Commission filing. A Collective Retreats spokesperson said the company has since achieved its $2.5-million goal.

“I’ve known Peter [Mack] and his co-founder Cristina [DeVito] for the past few years,” Frank said. “They are both great entrepreneurs and operators. So when I heard they were getting together to start a company, I knew I wanted to be supportive however I could. In terms of the product — I’ve had great experiences ‘glamping’ while on holiday, and its a category ready to explode. Collective Retreats is well positioned to own it.”

Shank said, “Collective Retreats is plugging into the growing interest in outdoor and one-of-a-kind luxury experiences at the same time that it provides a very compelling value proposition to property owners. The ability to equally serve two distinct audiences while creating a singularly unique product offering is something that resonated with me immediately. There is nothing else quite like it and it’s inherently scalable.”

As far as Collective Retreats’ distribution model goes, Mack said he wants to keep everything direct as much as possible, relying on strong word of mouth, and he thinks his company can maintain that distribution model in the future.

“If you think about where the OTAs [online travel agencies] come from, it was originally distressed inventory. We can move our inventory around … we can increase and decrease room counts pretty quickly. We don’t have a need to fill distressed rooms. That helps us maintain proprietary booking channels.”

Mody, however, thinks Mack should be paying more attention to a variety of distribution channels. “Yes, while [this is] an experience as opposed to just a room, and thus traditional OTAs may not be the way forward, platforms that facilitate curated, luxury, memorable experiences may be something for the company to explore beyond word of mouth and direct booking. Realistically, word of mouth is fine if you want to remain a certain size, but not necessarily a viable strategy for growth. So, if this is truly going to be marketed as an experience, then platforms that facilitate such experiences should also perhaps be a channel going forward.”

Frank, however, thinks word of mouth can drive the company’s growth. “Collective Retreats has a product that communicates itself well online, and will benefit from guests’ organic social media content and word of mouth. They also place great care in communicating with the customer from the discovery phase through to the stay and beyond,” he said.

“While the company does not own land, there are assets it has to invest in in terms of the tents and everything that goes in them,” Mody added. “Moreover, there is an investment in setting up a new location and the operating costs to keep it going, so that still means ‘heads in beds.’ So while distressed inventory may not be an issue, just one room unsold is $500 not going to the top line.”

The ability for Collective Retreats to not only grow but to also retain loyal guests will also be something the company will have to pay close attention to.

“I think scale is a challenge, in that yes, while this is a ‘cool’ experience that I want to brag about, would I want to do this repeatedly?, Mody said. “A novel experience, which is a factor that supports the concept’s success, is, by definition, just that — novel. Once you experience something you want to move onto the next thing, and that’s where the scale and network of the traditional hospitality brands is unmatchable. In that sense, while growth may be faster in the initial stages, sustained growth of the customer base (owing to customer attrition) may be a challenge [for Collective Retreats]. They might plateau after a reasonable point instead of continuing to grow, and that may be a business reality, unlike what it is for the traditional hotel industry and providers like Airbnb, the other important accommodation-focused sectors of the hospitality industry.”

A New Kind of Loyalty Program?

In an effort to get repeat business, Collective Retreats is also launching its own loyalty program, but trying to personalize it in a way that’s a bit different from a traditional hotel or travel loyalty program.

Instead of encouraging guests to earn and redeem points, Collective Retreats’ program is designed to offer recognition, the ability to collect actual goods like personalized merchandise (a bandana, for example), and to receive rewards in the form of special experiences.

Guests aren’t known by their membership number but by their own personalized “travelers’ mark” — an emblem that includes symbols that represent their traveler type, which is determined after they answer a short questionnaire about their personality and travel preferences.

“People aren’t numbers,” said Mack. “We’ve built our whole platform around this combination of really recognizing people for what they want and who they are and giving back to them for that … every time we speak to them we’ll use that mark of theirs. When you show up on property, your door, your menus will have that mark on there. Each retreat has its own symbol mark, too.”

“I love [the loyalty program],” said Frank. “A hands-on, human-touch business like Collective Retreats needs its own approach to loyalty. Collective is going to have a cult following as they continue to scale,  including from me. I can’t wait to rack up my traveler’s marks.”

“Personalization is definitely the name of the game as an important aspect of the guest experience,” said Mody. “Large brands are using data-driven marketing to personalize and build loyalty, but as this Skift article by Colin Nagy showed, personalizing the simple aspects of travel in the guest experience can be just as impactful. Allowing travelers to create their own symbols, as part of the Collective’s loyalty efforts, leverages the bragging rights that the experience allows guests. Its a simple yet effective personal touch, beyond just earning points.”

Mack, during his tenure at Starwood, also worked on the Starwood Preferred Guest (SPG) program and said that experience helped him design the program for Collective Retreats.

“I think what SPG did 10, 15 years ago was special, because points were worth so much more,” Mack said. “It was the next iteration of earn and redeem. But from all the focus group information I’ve seen and from all the research we’ve done, people don’t crave those things anymore. They want experiences.”

Can This Succeed?

Will Collective Retreats’ approach to providing a new twist on hospitality succeed? The jury’s still out but whether that happens depends on a number of variables, including demand for “glamping,” a distribution strategy that doesn’t rely on third-party sellers, and the ability to scale to a point where there’s a real incentive for guests to want to be a part of a loyalty program.

While the world’s largest hotel companies are tackling challenges related to direct bookings and are fighting over guest loyalty, they’ll hardly notice a startup like Collective Retreats. Still, Collective Retreats has some tough work ahead in terms of building up a loyal base of customers and getting enough word of mouth to power its bookings.

“Being in the luxury end of the market naturally limits you to a certain percentage of the travel population, which, while admittedly growing, may not be sufficiently large to build a loyal, growing customer base,” said Mody.

But if the rising demand for “transformational travel” — a travel experience that renders the traveler changed after his or her trip — especially in the luxury sphere continues, it’s possible Mack’s bet on luxury tents could pay off.

“Is the concept of Collective Retreats differentiated enough from glamping to warrant a kind of traction that glamping has not achieved?,” asked Mody. “I don’t think of glamping every time I feel like doing something different at the luxury end of the travel space. In that sense, Collective Retreats runs the danger or coming across as being more of the same.”

“The trend around glamping isn’t a fad,” said Mack. “It’s people wanting to really connect with the local area, the local people, and because we’re doing things like tents and other mobile accommodations like that, we’re really able to take advantage of places where you can’t put a traditional hotel.”

Frank said, “I know from my experience at onefinestay that there’s a huge desire for alternative accommodation in the high-end segment. Collective Retreats addresses the craving for back-to-nature, rugged experiences without sacrificing luxury. It bridges a gap between the austere traveler and the adventurous traveler who is not quite ready to give up a warm shower and working toilet.”

As Collective Retreats proceeds, Mody said it should also pay close attention to how it’s marketing itself. “I think the language that the company uses in its marketing will have to be carefully crafted around the dimensions of the experience economy that work for it, not what they think works for it,” he said. “It’s easy to get carried away with experiential buzzwords but sticking close to what the product really is, is important.”