Financial summary and brief description of a Wyoming dude ranch.
The Business A real working ranch for greenhorn guests, complete with a log-cabin lodge, a saloon, a horse barn, sleeping cabins, a rec hall, and a tack shop -- all on 44 deeded acres at the foot of Grand Teton National Park. Approximately 70% of revenues come from food and lodging (the ideal capacity is about 50 guests), 21% from snowmobiling trips, and the rest from fishing and hunting expeditions. Dude ranches in general have been averaging Memorial Day-to-Labor Day occupancy rates of 80% to 85%, but this one does 100% -- testimony to the current owner's knack for playing the cowboy role that visitors keep returning for.
Outlook "Soft" adventure travel (whereby you get the rustic stuff during the day but a bed and a shower at night) has grown 8% to 10% annually over the past 10 years -- or about one and a half times as fast as travel sales overall. And the locale for this business is particularly hot: insiders say, some with regret, that the area is headed in the direction of Aspen and Vail. There are lots of competing ranches nearby, but most are no larger than this one, and operators are continually referring customers to one another. The current owner estimates that overflow from his ranch accounted for 70% of another ranch's business one summer.
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Price Rationale The price reflects an earnings multiple of 8.7, but industry experts say sales, not profits (which are malleable beyond recognition in a business that provides bed and board for its operators), is the factor that counts. This ranch, they say, is not out of line at 2.7 times 1991 revenues -- especially given the cachet of its location. Keep in mind, though, that the real return on investment here is lifestyle, not retained earnings. Unless the land appreciates (a lot) before you sell it, your reward will be a job you presumably love.
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Pros The sublime countryside. Healthy sales. And the opportunity to be one of the few people on earth who can justifiably use the word dude during a typical day's work.
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Cons The days are long. Sales may plummet if your personal interpretation of Ben Cartwright doesn't draw visitors the way the current owner's does. And horses, while nice to ride, are hell to clean up after. -- Christopher Caggiano
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Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Tarantino Co., Loveland, Colo., 800-489-8601.