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In a dismal year for travel, outdoor recreation has shone as a rare bright spot. Camping has particularly seen a surge for safe domestic travel during the pandemic.
Some investors believe outdoor pursuits will continue to boom after the pandemic wanes because the segment’s booking, distribution, and management will shift online.
Hipcamp, a San Francisco-based startup making that bet, said on Thursday that it had acquired Youcamp, its counterpart in Moruya, Australia. The companies have offered a variety of outdoor options, ranging from simple tents that people pitch themselves to glamping services with hot showers.
The companies didn’t disclose the value of the deal. Youcamp was mostly boot-strapped. Its brand will fade, but most of the employees will stay.
Hipcamp has raised more than $40 million from backers such as Andreessen Horowitz, Benchmark, and O’Reilly AlphaTech Ventures. It’s considering further acquisitions.
“A big part of our vision has been to build a global community around people who want to get outside and appreciate nature,” said Hipcamp founder and CEO Alyssa Ravasio. “So, as we look forward to more international expansion, we’re open to all creative ideas.”
The startup was fortunate to have had significant fundraising before the pandemic. That money helped it weather the storm. The company gave campers who had to cancel the option to donate the value of their booking to the hosts. One in four did, Ravasio said.
The business has now recovered in areas where authorities have lifted travel restrictions.
“We’re sending our hosts more than three times as much money now than we were this time last year,” Ravasio said.
The acquisition of Youcamp brings Hipcamp’s total listings to 420,000 campsites in the U.S., Canada, and Australia.“We cover everything from blueberry farms on private land all the way up to campgrounds in national parks,” Ravasio said.
Hipcamp appears to stand out from its rivals in its assertiveness at trying to “create” more supply. It enables property owners to charge campers on their land.
“One out of two of our hosts are in farming or ranching,” Ravasio said. “We do a lot of personal outreach to landowners.”
Many hadn’t considered renting out their land before Hipcamp and Youcamp appeared.
“We explain how it’s an extra way to earn money off their land in a way that won’t compromise on their values around land stewardship and conservation,” Ravasio said. “We create an economic model where they get rewarded for taking care of their land. Some make tens of thousands of dollars in their first couple of months.”
The startup believes it’s only brought online a small percentage of the private land in the U.S. that would be appealing to travelers as campsites, and federal data on U.S. private land ownership hints at the market potential. It’s starting to talk to people who own tens or hundreds of properties in the U.S., with each property having significant acreage.
“Our core use case is someone who wasn’t doing this before Hipcamp,” Ravasio said. So that means Hipcamp has to offer tutorials and classes on what a good tent site looks like, one that’s maybe shaded and has a view.
Creating marketplaces is hard, though. A case in point: Turo, a marketplace for people to rent out their cars when they’re not using them, has raised more than $460 million but has yet to become a household name the way Airbnb has.
Hipcamp faces a two-pronged technical challenge. It has to get hosts to provide as many details as possible about their offerings, such as if there’s a hot spring or forest nearby. Then it has to make that information easy for travelers to grasp when they’re comparing listings.
The startup also needs to appeal to established, professional campground owners if it wants to become a truly one-stop shop in the eyes of consumers. One tool it offers to lure the professionals is its dynamic pricing engine, which aims to let hosts command top dollar for a campsite on a particular date depending on consumer demand signals.
Acquiring customers to book campsites can also be hard. Hipcamp said that word-of-mouth had driven its growth.
“We don’t do any paid digital advertising at all,” Ravasio said, referring to both before the pandemic and now.
But the company does use search engine optimization techniques to appear high in Google’s organic search results.
Most people plan camping trips in unstructured ways. Hipcamp is one of a few companies aiming to organize that effort online in a way as slick as booking any other type of travel.
In Europe, Pitchup, which works to match campers with campgrounds, holiday parks, or other outdoor activities, has sold more than 14 million nights since it launched online booking in 2010. It generated $4.5 million in revenue in 2018, the most recent year it revealed a figure, and it processed $40 million in gross transaction value last year. Its overnight reservations for September 2020 are up 163 percent from a year ago.
But Hipcamp remains the best-funded in its category.
“There’s no Expedia for campgrounds,” Ravasio said. “There’s a whole industry for professional campgrounds. There’s so much opportunity to partner with existing businesses.”
Ravasio’s theory about the online competition for outdoor recreation seems to be that whoever collects the most tents and yurts and other outdoor experiences, in the end, wins.
“People compare us to Airbnb, but that only captures one aspect of what we do,” Ravasio said. “It’s more something like Airbnb and Kayak merged, only focused on the outdoors.”