Tatarstan businesses aimed at glamping development

What is glamping?

Formally, this type of business and recreation refers to natural and ecological tourism, which Tatarstan has been trying to actively develop in recent years. The project is supervised by the assistant to the president of the republic, Natalia Fishman-Bekmambetova, together with whom Rustam Minnikhanov visited the first glamping Best Glamp Lesnaya Polyana from the Russian company of the same name. The cost of booking is around 6,000-9,000 rubles, and judging by discounts of up to 30-35%, Lesnaya Polyana is very interested in customers. This is due to that such business is still new for Tatarstan, as well as for Russia as a whole.

This is not surprising, since for the first time the very concept of “glamping” appeared in the UK not so long ago, in 2005. Although the very concept of such recreation was used in Scotland in the 16th century, “when the outing of kings and earls to nature, luxurious tents were put up, which were filled with household items from the palace”. In the 1920s, this type of recreation was used by wealthy hunters from Great Britain and North America on safari in Africa (with a safari tent installed on a platform). Modern glamping began to ctively develop only 10 years ago.

Glamping is growing by 100% annually in Russia

The president and his assistant walked around the territory of Zelenodolsk glamping from the reception and the “blacksmith's house” to the “tree house” and “the geodesic dome”. Then they gathered in one of the tents for a meeting with entrepreneurs to discuss business problems: there are no regulations, there is little land, the roads are bad, environmentalists do not allow access to reservoirs, professional investors do not give money.

The meeting was organised by the newly created department Directorate for the Development of Natural Territories and Ecotourism of the foundation Institute for Urban Development of the Republic of Tatarstan under the leadership of Oksana Sargina, the former business partner of Zhanna Kira, who now heads the Glamping Association of Russia and her company Dikiy Dom. According to the latter, her company has already implemented 20 projects and is trying to implement another one in New York.

“Now there are only 150 glamping sites in Russia, which is not enough, but, unlike the global growth of this type of business at 12%, in Russia it is growing by 100% annually, although glamping is only 6 years old. It is interesting because the construction of such a campsite takes 3-4 weeks. Therefore, we expect that in 2022 there will be another 100-150 new glampings.”

60% of funds for domestic tourism in support of glamping

As Zhanna Kira noted, Rosturizm is also financially interested in the development of the new business, which allocates up to 1-2 billion rubles for domestic tourism, of which 60% is for glamping. The interest from the business community is also high. According to Kira, this business can theoretically be easily entered and quickly recouped (the payback is four times faster than that of a regular hotel). According to her calculations, the cost of 21 million rubles required to invest in glamping of 20 modular houses can be recouped in 16 months. The cost of houses depends rather on the territory, the more unique it is — the higher the price for booking will be.

Zhanna Kira noted that it is not necessary to compare Tatarstan with Baikal, Karelia or Krasnodar Krai — there are many successful places, but “you are very strong in service and hospitality”, which she recommends to focus on. Ideally, she believes, it is worth making a cluster of glamping from, for example, four locations. The business itself brings good investments to the region. According to her calculations, entrepreneurs will spend 1,2 billion rubles on buying or renting land this year, 600 million rubles on design and construction, 4,5 billion rubles on infrastructure, 800 million rubles on supply, and 5,5 billion rubles on services.

Starting the development with existing tourist clusters

Oksana Sargina, the head of the department Directorate of the Development of Natural Areas and Ecotourism of the fund Institute of Urban Development of Tatarstan, stated that definitely and in Tatarstan there will be created a regional branch of the Association Glamping of the Russian Federation. But she also mentioned the key problems facing the business and the region. First, the garbage (and what to do with it). Second, the lack of basic infrastructure in remote areas. Third, the accessibility of movement to glamping and the lack of high-quality roads. Besides, despite the words of Zhanna Kira about easy entry into the business, in practice it is not so easy to do this — because of bureaucracy. It may take 1,5-2,5 years from the idea to the launch in Tatarstan. And at some stages, the startup may even be interrupted — if the businessman loses the auction. Sargina proposed to create a catalog of free lands of the Republic of Tatarstan and a register of abandoned recreation centres, which are proposed to be given to businesses for renovation.

“There are already the best places, communications and roads are there, these bases have not yet lost popularity. I also propose to develop those projects [as clusters] where Tatarstan already allocated funds — Kamskoe Ustye, Blue Lakes, Rybnaya Sloboda. In May, we will try to take on the support of those entrepreneurs who are already financially ready to start. And to reduce to six months the administrative path for launching a new glamping.”

“We can't make a road for every object!”

Tatarstan President Rustam Minnikhanov suggested taking a catalog of the Forest Fund and assessing in advance where the project “will take off, and where it will not” — since an entrepreneur may not understand this, build a glamping and go bankrupt.

“It is necessary to identify places that are guaranteed to provide benefits to the business. If there is a catalog, then we can think of an optimal mechanism for supporting glamping through our investment council, and we can quickly issue these projects. Second, the guys are just starting out, there is no experience yet — so they immediately need a catalog of best practices so that you they collect glampings like a lego. Third, it is necessary to immediately think about what solutions can be made for the supply of electricity, water, and sewerage and work out the “garbage topic”. The roads also need to be looked at. We can't make a road for every object!” the head of Tatarstan warned. “If only there will be a complex of objects to stand on one location — then it is possible. We also have a programme for garden associations — we lay roads and energy. If we choose specific locations, we can take on complex infrastructure solutions.”

Land issue should be resolved through the investment council

Sergey Timonin, the manager of the tent camping Storm and the owner of the company Green Holidays, complained about the difficulty of obtaining a land plot on the example of his attempt to find land for a tent family camping in the Pestrechinsky district:

“We are faced with the impossibility of developing new territories in fact. In 2019, we agreed on our project with the head of the Pestrechinsky district and found a great place. They dissociated the land plot, organized everything. They were registered in cadastre -150,000 rubles and six months spent. We tendered the land — and the big players immediately showed up there, and we lost the tender. But even if they won — it would be illegal, you can not conduct recreational activities on agricultural land!”

In response, the president of Tatarstan proposed to solve such issues not in a single way, but in a complex way: select 20-50 plots, publicly announce them, after which each entrepreneur prepares a programme, shows resources and then the Investment Council of the Republic of Tatarstan register it.

“Whether it is agricultural land or not — it is a question of the Government of Tatarstan. [You had problems], because everything was in private, and today it can be systematically solved," assured Minnikhanov.

“In the rain, guests cannot ride in, not to mention the service”

Timonin also proposed to make amendments to the Forest Code of the Republic of Tatarstan, in particular, to the point 2 — the categories of objects that can be given to entrepreneurs not through the tendering procedure — to include ecotourism and recreation objects. Minnikhanov immediately contacted Deputy of the State Council of the Republic of Tatarstan, chairman of the Committee on Ecology, Nature Management, Agro-industrial and Food Policy Azat Khamayev via video broadcast and asked him to resolve this issue. Azat Kiyamovich promised assistance.

Ilnar Khamidullin, co-founder of glamping Urman Camp, “the first year-round camping in the Russian Federation”, in turn, complained about the bad roads. The project itself is already working, nine safari tents, a spring nearby, there are cedar banyas with a panoramic window. Thirty five million rubles have already been invested in the project:

“But dirt roads… In the rain, guests cannot ride in, not to mention the service. All beautiful locations are located at a distance. We propose to include the construction of roads in the Tatarstan programme for businesses that have already invested their funds.

“Why not? If they themselves dragged the network there for 2,5 million rubles. But we need to see if there are any crazy things there?" the president of the Republic of Tatarstan reacted.

What environmentalists incite the supervisory authorities to glampings

Similarly, he expressed concerns about the treatment of reservoirs by the business itself, especially since the ministry of ecology of the Republic of Tatarstan has no free money for cleaning reservoirs. The main thing is to preserve the appearance of the purified reservoir, “and not to interfere with metal or concrete — it would be wrong”. The environmental issue is one of the most painful, founder of Zelenodolsk glamping Ilshat Gazizov admitted. According to him, in order to compete with Altai or Karelia, his company decided to build creative architectural houses, in particular tree houses. But this immediately excited environmentalists and activists — would entrepreneurs spoil the trees:

“Have you seen the glass cube on the tree today? We guarantee that we have taken everything into account, and the world experience, too. The designers will preserve all natural factors. But we do not have regulations or laws, and it is difficult for us to negotiate with environmentalists. We have to meet with the supervisory authorities, which the activists incite against us. We also want to build a glass house on the water. And we don't know what we're going to face. We need regulations.”

Glampings will be supported by a subsidised rate

Finally, the traditional question of state support was raised by the director of the same glamping, Rustam Ayupov, and his co-founder. He said that his company has already opened up to a hundred facilities across the country, in Kazan, Krasnodar, Irkutsk, among others. However, given that the market is young — it is not popular with professional investors. There are no very profitable projects that would attract the attention of investors.

“When we entered to the Zelenodolsk project, we planned to scale it, and open three facilities in Tatarstan at once. But we need funding. We wanted to attract a loan from banks, but then we will actually work on paying interest. And professional investors look at construction or production — these areas because they have already proven their effectiveness, and they have state support, which again attracts attention to them," Ayupov explained the stalemate.

He suggested that the authorities of Tatarstan somehow help with subsidising the interest rate on loans. On which, Minister of Economy Midkhat Shagiakhmetov, at the suggestion of President of Tatarstan Rustam Minnikhanov, gave the nod. Natalia Fishman-Bekmambetova clarified: business would like to subsidise the rate of 5 million a year for 5-7 years.

Authorities will help solve the problems, but there will be no state programme

How profitable is the business? Ilnar Khamidullin, co-founder of Urman Camp glamping, has only one company (in the public domain) Devyataya Peredacha PLC, which in 2019 showed zero turnover and minus 1 ruble loss. Sergey Timonin has four companies, two of them are tourist companies. And Green Holidays, I must say, can boast of success: revenue from 2016 to 2019 tripled, amounting to 47,2 million rubles, profit doubled in 2019, amounting to 5,2 million rubles. Another company for children's camping in 2019 just launched, showing immediately a turnover of 9 million rubles, and a profit of 700,000 rubles. Best Glamp, taking into account their launch, of course, has no financial indicators yet. Zhanna Kira herself, having launched with Wild House in 2019, taking into account a loan of 10,8 million rubles, managed to receive revenue of 14,7 million rubles and a profit of 1,1 million rubles. The indicators are generally quite good — especially if you do not forget about the payback period of 16 months.

Anyway, summing up the results of the meeting, Rustam Minnikhanov proposed to create an interdepartmental commission that would determine the working conditions of the new type of business and its support.

“I think we'll find solutions. If necessary, we will go to the federal level, to the ministry of construction of the Republic of Tatarstan, especially since the team of Irek Fayzullin is now making a lot of changes. We will try to change what we can at our level, and we will have to change some of them at the federal level.”

The president of Tatarstan has so far essentially refused Natalia Fishman-Bekmambetova to prepare a separate state programme for the development of this type of ecotourism for 5 years. According to him, a programme should be launched when people can already work. Otherwise, it will be useless — if the authorities with the business “do not solve every point” before that. Minnikhanov also did not like the remark that the nature of Tatarstan somehow loses to Altai, Karelia or the Krasnodar Krai.

“Krasnodar, Altai — it is necessary to get there first, but here — nearby and no worse. It seems that the people will go somewhere far away. We have the Volga, Kama, Vyatka, and Blue Lakes. A million of Kazan residents can drive away from home on Saturday or Sunday and have a 50 per cent rest," he said confidently.

The president promised to come to Zelenodolsk glamping in 3 months and look at its work, saying that this business “may not be a marginal product, but it will be in demand as bread in any situation”. The main thing, according to him, is to develop the good service.