Ranchonomics – the economics of running a guest ranch

BY Jody Dahl | Thu 26 Apr, 2012

Dude ranch vacations can be expensive: Fact. Whether you choose a rustic working ranch vacation or an all-frills luxury dude ranch vacation, one thing you can’t escape is the cost. But have you often wondered where all that money goes? How is a ranch’s revenue spent and what do guests get in return? That is something Peter de Cabooter, manager of The Hideout Guest Ranch in Wyoming, USA, is frequently asked by guests. Here in a guest blog for Top50 Ranches, he enlightens us on the economics – or as Peter calls it, the ‘Ranchonomics’ – of guest ranching…

The Hideout Guest Ranch in Wyoming USA

The guest ranching industry is a mixture of ranch, hospitality and entertainment, equestrian, outdoors, hotel, restaurant and farming business. Guest ranches operate mostly seasonally and are usually located in logistically challenging places, bringing up issues such as access to the wider population, staff, upkeep of assets (eg wildlife damage to fences), building maintenance, feeding of livestock (four months’ during winter) and more.

At the same time, in the eyes of the US government we are not considered a ranch and, the guest ranch industry being a rather small business segment in the big economic picture, we do not enjoy subsidies that operational ranches and farms do. If expenses go up, the weather goes bad, or we experience competition from international and global markets, there is no government institution, union or $288 Billion US Farm Bill to help or subsidize us. We are not part of a big hotel chain that can absorb losses, nor do we enjoy smaller taxes on our property the way operational ranches do.

The North American Dude Ranch Association, to which some of us belong, along with the Wyoming Dude Ranch Association, are non-profit organizations and do not subsidize us. We pay a fee and these organizations do an outstanding job maximizing the small contribution we pay. As you can imagine, we do not have access to influential big lobby networks, industry unions or farm organizations. Instead, we ourselves have to maintain and manage assets, people and horses year-round, for a season that provides income during six months of the year at best – indeed, many guest ranches only operate three months of the year. This means we guest ranchers are real independent entrepreneurs juggling a lot of different skills to offer guests memorable dude ranch vacations.

That said, the non-hospitality side of a guest ranch does enjoy some of the aforementioned subsidies. However, most guest ranches are separate entities from the operational ranch, even if owned by the same ranchers. As a result, some guest ranches are undercapitalized and run on a shoestring to make ends meet. And, unlike any other business in the same situation who could take shortcuts on such things like safety, quality, staff and maintenance, all of these issues have a direct effect on guests’ experience on their dude ranch vacations.

What about The Hideout Guest Ranch?
The Hideout Guest Ranch operation is limited to 25 guests and is managed as a business entirely independently from the ranching and farming side of the outfit. However, we do share the 250,000 acres and help with cattle work for the ranch with our guests. We take pride in always improving guests’ dude ranch vacation experience, and are well capitalized to make sure we can constantly upgrade our assets and horses, hire the best equestrian seasonal people and keep key staff year-round.

Ranch horses
Having horses does not automatically mean you have a horse program that will satisfy people who know, or would like to know, about horses. It takes time and money to maintain a good string of guest ranch horses. The Hideout hires a full-time trainer who has started over 1,500 young, unbroken horses and who is also our head wrangler. He and the team work with all our horses to fine-tune them, even out of guest season – if they didn’t, there would surely be some issues when the season started up again.

Horses at The Hideout Ranch, Wyoming USA

All of the horses we own at The Hideout are well fed and cared for. Once or twice a year an equine vet vaccinates them, flushes their teeth and carries out a general check-up. Sometimes we lease additional horses, but prior to introducing them to the guest string we ride each one of them and, when they are delivered to The Hideout, we put them in quarantine, vaccinate and have the vet check them out completely, and feed them well.

Trucks and trailers
For The Hideout to operate, we need a sizable fleet of well-maintained trucks and trailers to drive up the canyon every day in order to find and move the cows in the mountains. We have never seen a 250,000 acre working cattle ranch where you ride out from the valley at 4,200 feet to elevations of 10,000-plus feet to go find the animals, work a full day and come down the mountains again. If we did this, we would not have many guests enjoying cattle work, nor would our horses last long! The roads we travel with our vehicles are very abrasive to tires and mechanics, so all our vehicles are on a closely monitored safety and preventative maintenance program.

The kitchen

Ranch food kitchens at The Hideout Ranch Wyoming

Because guests need feeding! We prepare most ranch meals from scratch with fresh ingredients of the highest quality. We serve full, warm breakfasts and our chefs are always culinary schooled.

Our staff
The guest ranch certainly couldn’t operate without them. We hire based on “The Hideout Code of Conduct of The 3 Cs” – Character, Conduct and Competence. Although one can train for competence, the other 2 Cs are inherent qualities. This means we do not hire just anybody, and our selection and training process is extensive compared to some guest ranches. They may not necessarily be cowboys, but all our staff are well-rounded horse people trained in our culture.

Private property, grounds and buildings
This makes up an incredible 90% of our expenses, meaning 90% of what guests pay goes toward maintaining our cabins, buildings and grounds. We take pride in a clean and nice-looking outfit, and because we own quite a bit of our land, there are always taxes to be paid and maintenance to be done.

So where, you might ask, does the other 10% go? While most of the time we ride on private property, during the summer and autumn months we also ride on our public lands. Close to 50% of the land in the State of Wyoming is owned by the government, and we are privileged to operate on The National Forest and Bureau of Land Management (BLM) lands under our Recreational Leases. Around 10% of the total guest ranch package income to The Hideout during the months of July through October is generated on National Forest Service lands. This 10% is taken from the total hours guests stay at The Hideout, from the moment they arrive to the moment they leave. Our Recreational Lease fee, which is a tax to the government, is also calculated as a percentage.

For more information on dude ranch vacations at The Hideout Ranch, visit Top50Ranches.com

TAGS: dude ranch vacations, working ranches usa, the hideout guest ranch, top50 ranches, guest ranch economics, wyoming guest ranches, tax on ranches

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