Housekeeping vs. American Plan: Which Service Model Maximizes Profitability?
When operating a wilderness lodge, one of the most consequential business decisions you’ll make is which service model to offer your guests. The two primary options—Housekeeping Plans and American Plans—create fundamentally different guest experiences and operational structures that directly impact your bottom line.
This analysis examines the financial implications of each model and provides guidance on making the optimal choice for your property.
Understanding the Service Models
Housekeeping Plan
Under a Housekeeping Plan, guests rent a fully equipped cabin with kitchen facilities and are responsible for their own meals and daily cleaning. The lodge typically provides:
- Fully furnished accommodation with kitchen
- Initial cabin cleaning and setup
- Bed linens and towels
- Basic supplies (toilet paper, soap)
- Access to amenities (boats, docks, common areas)
Guests bring or purchase their own food and handle meal preparation.
American Plan
With an American Plan (sometimes called “Full Service” or “All-Inclusive”), the lodge provides accommodations plus all meals. This typically includes:
- Fully furnished accommodation
- Daily housekeeping service
- Three prepared meals per day
- Often guided services or organized activities
- All amenities and equipment
Many lodges offer a Modified American Plan (MAP), which includes breakfast and dinner but not lunch.
Hybrid Approaches
Our market analysis shows approximately 18% of wilderness lodges offer both options simultaneously, allowing guests to choose. This creates operational complexity but expands market reach.
Profitability Analysis
Our analysis of wilderness lodge financial statements reveals significant differences in revenue and operational costs between service models.
Revenue Comparison
Based on our spreadsheet data and industry research, here’s how the models compare on revenue metrics:
Service Model | Average Revenue Per Cabin | Typical Daily Rate Premium |
Housekeeping Plan | $17,000-$28,000 | Baseline |
American Plan | $24,000-$51,000 | +40-70% |
Hybrid Model | $22,000-$38,000 | Varies |
The American Plan commands substantially higher rates, with guests willing to pay a premium for the convenience and experience of prepared meals and additional services.
Cost Structure Differences
The higher revenue of American Plan properties comes with increased operational costs:
Expense Category | Housekeeping Plan | American Plan |
Food & Beverage | 0-5% of revenue | 20-30% of revenue |
Labor | 15-25% of revenue | 30-40% of revenue |
Utilities | 8-10% of revenue | 10-15% of revenue |
Maintenance | Similar | Similar |
Marketing | Similar | Similar |
American Plan operations require kitchen staff, servers, and more frequent housekeeping, resulting in higher labor costs. Food costs are a major expense factor not present in Housekeeping Plan operations.
Net Profit Comparison
Despite higher gross revenue, the net profitability comparison isn’t straightforward:
- Housekeeping Plan lodges: Typically achieve 30-40% net margins due to lower operational costs
- American Plan lodges: Often report 20-35% net margins due to higher operational complexity
- Hybrid Model operations: Usually fall between these ranges, with margins of 25-35%
However, the absolute dollar amount of profit may still be higher with American Plan properties due to substantially higher gross revenue, even with smaller margins.
Market Positioning Considerations
The choice between service models also affects your position in the marketplace:
Guest Demographics
Housekeeping Plan properties typically attract:
- Budget-conscious travelers
- Families seeking economical vacations
- Longer-stay guests
- Self-sufficient outdoor enthusiasts
- Repeat visitors familiar with the area
American Plan properties typically attract:
- Higher-income travelers
- Corporate/executive retreats
- First-time wilderness visitors
- International tourists
- Guests seeking a “luxury wilderness” experience
Seasonal Considerations
The service model decision has different implications based on your operational season:
- Short Season Operations (12-16 weeks): American Plan often maximizes revenue during limited operating windows
- Extended Season Operations: Housekeeping Plans can enable longer operating seasons with reduced shoulder-season staffing
Regional Factors
Our data shows regional preferences vary significantly:
- Ontario fishing lodges: 60% housekeeping, 25% American Plan, 15% hybrid
- British Columbia wilderness lodges: 40% housekeeping, 45% American Plan, 15% hybrid
- Quebec operations: Stronger preference for American Plan (nearly 70%)
Case Studies: Successful Transitions
Case Study 1: Northern Ontario Lodge
- Transitioned from Housekeeping to American Plan
- Revenue increased 65% within three years
- Net profit increased 48% despite higher costs
- Key success factor: Focusing on high-quality, locally-sourced food offerings
Case Study 2: Manitoba Wilderness Resort
- Switched from American Plan to Housekeeping Plan
- Revenue initially dropped 30% but recovered to 85% of previous level
- Net profit increased 22% due to drastically reduced staffing needs
- Key success factor: Converting dining hall to additional rental cabins
Making the Decision: Key Factors to Consider
When deciding which model is right for your lodge, consider these critical factors:
Property Assessment
- Kitchen Facilities: Do guest cabins have functional kitchens? Retrofitting can cost $10,000-$25,000 per cabin.
- Dining Facilities: Is there a central dining area/restaurant? Building one requires substantial investment.
- Staffing Accommodations: American Plan requires more staff living on-site.
- Access Limitations: Remote properties may face challenges with food delivery for American Plan operations.
Operational Capabilities
- Staffing Pool: Can you reliably recruit qualified kitchen staff and servers?
- Supply Chain: Do you have reliable vendors for quality food supplies?
- Management Experience: Managing food service operations requires specialized expertise.
Market Analysis
- Competition: What do nearby comparable properties offer?
- Target Customer: Which service model aligns with your ideal guest profile?
- Regulatory Environment: Food service regulations vary by province/location.
Transition Strategies
For owners considering a change in service model:
Housekeeping to American Plan
- Begin with weekend dining offerings to test systems
- Add Modified American Plan before full American Plan
- Invest in kitchen equipment and dining facilities before marketing the change
- Expect 2-3 seasons to fully transition customer base and operations
American Plan to Housekeeping
- Add kitchenettes to units before reducing meal service
- Consider a gradual phase-out of meal services
- Develop relationships with local food suppliers for guests
- Market the change by emphasizing lower rates and flexibility
Conclusion
The choice between Housekeeping and American Plan service models significantly impacts a wilderness lodge’s financial performance and market positioning. While American Plan operations typically generate higher gross revenue, their profitability depends on efficient management of food and labor costs.
Your decision should be based on a realistic assessment of your property’s physical capabilities, staffing resources, target market, and your own management strengths. Often, the most profitable approach is not simply choosing one model over the other, but rather optimizing the execution of the model that best fits your specific situation.
For wilderness lodge buyers, this analysis should be a crucial component of pre-purchase due diligence. For sellers, demonstrating strong financial performance within your chosen service model will maximize your property’s value.
This article has been prepared by Frontier Hospitality Advisor for general information only. Frontier Hospitality Advisor makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Frontier Hospitality Advisor excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this article and excludes all liability for loss and damages arising there from.
