Last month, Gatlinburg-based Cabins For YOU closed on its cash purchase of Chalet Village for an undisclosed sum. With the acquisition of Chalet Village’s 70 rentals, Cabins for YOU now manages approximately 450 vacation rental properties in Sevier County, Tennessee. The purchase also included the office location on Ski Mountain, Chalet Village’s laundry facility, and the company’s fleet of company vehicles.
Founded in 1972, Chalet Village Properties is reportedly the oldest vacation rental management company in Gatlinburg and was established by a development group that moved into the area, building roads, dividing the mountain into lots, and selling these lots to people looking to build cabins.
According to Cabins for YOU founder, Greg Plimpton, “At the time, Gatlinburg was the city to visit because it was right at the edge of the national park. In fact, the mountain that Chalet Village sits on is bordered by the national park on three sides.”
“The most recent owners purchased Chalet Village property management in 1982,” Plimpton continued. “They knew early on that—because of tourism— the village would be better suited for overnight rentals, and they expanded the company as such. When they started, there were no cell phones, internet, or even photographs of the properties. They were making reservations over the phone through verbal descriptions and keeping records of upcoming reservations on a whiteboard in the office. At the time, people were not necessarily coming for the accommodations: They were coming for the downtown area and the national park. Amenities that are now expected (hot tubs, pool tables, TVs in bedrooms) were considered a luxury.”
Plimpton added, “You may be familiar with the wildfire we had back in the winter of 2016. The heart of the fire was in Chalet Village on that mountain. There were 550 homes destroyed in the village alone, and over 300 have been rebuilt since then. While there is a lot of history with older properties in the area, there is also a lot of new development, which is interesting because when the previous owners purchased, they purchased during a development boom; and here we are purchasing the in same area during another boom (for different and more unfortunate reasons, but a boom nonetheless).”
Additional Q&A with Greg Plimpton, owner and founder, Cabins For YOU
Q: What additional benefits did you receive with the asset purchases of the office and laundry facilities?
GP: The Chalet Village office we purchased is an iconic building on Ski Mountain in Gatlinburg. It’s in a high traffic location that opens the opportunity for more walk-in business, which we haven’t done a lot of but are open to. Most of our business has been remote. There’s a convenience in our guests not being required to check-in anywhere physically, but there’s also an inconvenience for the guests that wanted to see someone in person. We believe it’s a small percentage but prior to this purchase, it wasn’t really possible. Our offices were all geared towards operations.
In addition, our main laundry facility is around half an hour from the new Gatlinburg location. The new office has a smaller laundry facility included, which will help our cleaning staff service our Gatlinburg cabins faster. A roundtrip visit from Gatlinburg to the main laundry facility and back would easily take an hour or more without the new location. And this isn’t limited to linens, of course. We have in-cabin collateral and inventory that we’ll be able to keep at this facility to save on travel and response time.
Q: What attributes did you see in Chalet Village that made it an attractive acquisition opportunity?
GP: Chalet Village is a reputable company that has been in the area since the 1970s. Like us, it was family-owned. Their properties were in a notorious, central location in Gatlinburg on the edge of the national park, and there’s a lot of history and loyalty to Chalet Village (the area) and Chalet Village (the management company).
Why did we decide to acquire in general? We’re always chasing growth.
Q: We are seeing strong signs that the future of consolidation in the vacation rental industry is going to be found in geo-adjacent acquisitions. Do you have any insight on the value of buying neighbors vs acquiring companies across the country?
GP: Absolutely. In fact, the previous owner of Chalet Village would never sell to a more “corporate” company that wasn’t family-owned. It was important to them that they transfer from their family to another family.
Furthermore, there is a lot of value in having an established presence in the market you’re acquiring in. We’ve been in the Smoky Mountain market since 2001, so we have decades of performance data, experience, testimonials, and knowledge that we are able to bring to the table. One of the biggest concerns we had with the acquisition is how the cabin owners would respond. Change can be upsetting, especially when unanticipated, and even more so in the middle of a pandemic. We have a robust business development and owner relations team that was prepared to handle the tough conversations and answer the hard questions.
That said, we do have plans to explore other markets and continue to grow. We know a challenge we’ll have in those markets is the argument that we’re new to the area, but my belief is that our extensive knowledge of the vacation rental industry in general—and our efforts to stay cutting-edge and push the envelope—will serve us in those moments.
Q: With what you’ve learned, what would future criteria be for another acquisition?
GP: We’ve found this transition to be easy based on the size of the company, and the fact that we already had human capital in the market served us well. So while the price is always a factor, the others would be the size of the company, the human capital in the company, and the values/reputation of the company.
Chalet Village’s vacation rental homes are currently available to rent on the Cabins For YOU website.