Cabin Resort Feasibility Study Outside Townsend, Tennessee: 11 A-Frames on an SBA 504 Loan

Demand in Blount County is growing in dollars even while Smokies park visits fall, because spending is shifting toward overnight and fly-in visitors who need beds. That is the right tailwind for cabins. But Townsend's rental market tops out around 53% occupancy on the most generous data source, it is sharply seasonal, and 75 new resort cabins break ground five minutes from the Cades Cove entrance this autumn. At a $117 RevPAR, between the two vendors' market averages, the resort earns $211,956 of net operating income. That covers a standard 20%-equity 504 structure only 0.84 times. Sized to 1.25x, the market supports about $1.97 million of debt, and the sponsor carries about 46% of the cost.

Two-bedroom units are the largest single class in Townsend, at 34.2% of listings, so the subject competes in the most crowded size and also the most liquid one [12]. Seasonality is pronounced: AirROI's peak month is October at 60.7% occupancy and a $298 ADR, and its trough is January and February at 25.2% and $234 [12].

The vendors disagree on supply direction (down 24.8% against up 46.3%), on occupancy (53% against 38.5%) and on revenue per listing. They nearly agree on rate. RevPAR is the steadier comparison, and it brackets the market at $102 to $129. The study underwrites $117, between the two averages and below AirROI's top quartile of $133. A new A-frame with a private hot tub can plausibly earn top-quartile RevPAR. That is an operating judgment, not market data, so the loan is not sized on it.

Operating expenses in the study case include payroll of $152,237 for a resident manager, housekeeping and maintenance with a 20% burden; booking channels and card processing at 9% of lodging; utilities of $30,000 for hot tubs and HVAC; insurance of $30,000; property tax of $15,480 on about $3.0 million of appraised value at the 40% commercial ratio and Blount County's 2026 rate of $1.29 per $100 [22]; repairs and hot tub service at 4.5% of lodging; and a 3% replacement reserve. Lodging and sales taxes are passed through to guests and excluded: 14.75% outside Townsend city limits (5% county occupancy tax, 7% state and 2.75% local sales tax). Townsend's new 3% city occupancy tax, collected from May 1, 2026, applies only inside city limits [23].

1. A paid custom comparable set from AirDNA or Key Data: two-bedroom cabins with hot tubs within 10 miles, by month. That will settle which vendor's occupancy applies to this product.
2. A lease-up stress test against the 75 resort cabins opening in summer 2027.
3. Written zoning verification from Blount County Planning for 11 cabins on the parcel under the vacation rental cabin standards (Zoning Resolution Section 7.11) and any density cap in force [25].
4. A soil and site evaluation for about 3,300 gallons per day. Tennessee rules size systems at 150 gallons per bedroom per day, treat anything above 750 gallons per day as a large system needing site-specific review, and cap each field at 3,000 gallons per day, so two fields are expected [26].
5. An appraisal with a sales comparison and cap-rate study, and the CDC's determination of SBA rural status for the debenture fee waiver.
6. Executed cabin bids at or below $150 per sq ft, and a funded reserve sized to the January and February trough.