Whenever I do a project I always challenge myself to use just what I have on hand to the greatest expent possible. The few things I bought for this project were glue stick refills and a bit of catnip spray to try and attract claws to the sides when done.
I started out with two plastic crates, that weren't exactly the same size, and cut holes out to make doorways. This part was a bit tricky since the plastic was the cheap kind and was inclined to snap in weird ways. (Safety goggles would have come in handy.) I then used thick cardboard to make doorways/wall stabilizers/pokey-bit covers. Packing tape was use to hold them in place.
From here I used an old mattress cover, that had also spent time as a moving blanket, to sew box liners and lids. The liners were large enough that the tops made lips over the edges.
(As you can tell, the future homeowner was displeased that it was taking so long.)
The next step was to take some remnant upholstery fabric in a color I wasn't fond of (thus allowing me to use it up since you weren't going to see it much anyway) and made more liners and lids. I then cut the opening flaps and secured with hot glue. This was followed by securely tying the two sections together.
An upholstery remnant, that matched the room it would be in, capped the top and was secured with hot glue. I had an area rug that fell into the "this might come in handy later" category that I was able to pull into the project. I wrapped the rug around the frame, making sure that the sections with the edging lined up with the top and back. It was secured with even more hot glue and the openings were cut. (At which point the future homeowner returned to make sure his fat butt could fit through the doorway.)
A bit more of the top upholstery fabric was used to secure the carpet and inner sections together, and a bit of paint was used to fancy it up a bit. I only had red, blue, black, and white paint, but I like purple so it fit the theme. There's another tree on the other side whose branches intertwine with the one you see. Since the top is made of three layers of thick fabric, it makes for a comfy hammock that is likely to not stretch out too much.