Cloudland at McLemore hotel
Duane Horton, who has long led in the development of the Cloudland at McLemore resort on Lookout Mountain, on Friday said the property has suffered early losses, but he believe it is on track for “stabilization” in several years.
Despite a projected $8 million loss in 2026 and low hotel occupancy, he maintains that initial losses were built in to the project timeline.
The Curio by Hilton hotel, built at a scenic bluff south of the Trenton-LaFayette Highway, is the feature of the property along with two award-winning golf courses, including the recently completed The Keep.
Mr. Horton, a Chattanooga developer, said, “Like most destination hotels – particularly those creating an entirely new market – Cloudland at McLemore is progressing through a fully anticipated ramp-up period. Early underwriting forecasted a multi-year path to stabilization, while some projections suggested three years, it is more realistic to expect a four-to-five-year path. We ultimately project we will outperform the original long-term forecast.
“2026 represents only Cloudland’s second full year of operations, and operating losses during this phase were anticipated. These losses are expected and do not indicate operational instability. From the earliest planning stages – well before the bond issuance – Cloudland was intentionally structured with financial flexibility to support operations through the ramp-up period until stabilization and profitability are achieved.
“The projected $8 million loss in 2026 reflects timing within the ramp-up period rather than underlying performance and was contemplated in advance, with financial structures in place to address it if it occurred. Examples include pre-funded reserves and preauthorized rights to defer certain expenses, such as the ground lease payment. This structure enables Cloudland to maintain operational strength, guest experience, and brand integrity without compromise during its early years.
“Reported occupancy of approximately 44 percent in 2025 should be viewed in the context of market creation rather than peer comparison. Cloudland is not entering an established hospitality market – it is helping define one. Stabilized occupancy for the property is expected to be in the low- to mid-60 percent range, with a long-term target in the mid-60s once the destination matures. The 2025 current occupancy puts us over two-thirds of our future target in the first full operating year.
“Group sales play a significant role in Cloudland’s business model, and the YOY indicators show strong growth in this segment of our business. Year-over-year group sales are materially higher than the same period last year, advance bookings are increasing and repeat group business is already becoming a meaningful contributor. These trends are consistent with a property moving steadily toward stabilization.
“Recent national recognition of The Keep has materially accelerated awareness and demand. The Keep has received multiple top-tier accolades, including Best New Golf Course in the Country recognition and a Top-25 Resort Course debut, placing McLemore among the most highly ranked public-access golf destinations in the United States. These honors significantly expand the property’s visibility and are expected to drive continued growth in both leisure and group demand- particularly as peak golf season approaches.
“Importantly, many of these accolades were not known at the time earlier forecasts were prepared, and current performance indicators suggest momentum exceeding prior expectations.
“Over the past three to four years, more than $300 million has been invested across McLemore. The near-term focus is to fully stabilize and optimize the performance of these assets and allow them to operate at their intended potential. Longer-term opportunities for McLemore remain substantial, but the priority today is disciplined execution, stabilization, and maximizing the value of what has already been built.
“Cloudland’s trajectory is consistent with intentional destination development: early investment, measured ramp-up, growing awareness, and long-term value creation.”
Cloudland at McLemore hotel