During August, the park trade media carried two articles about two companies attending a camping and RVing show in China. Bow Stern, a marketing communications company based in Tallahassee, FL, and the Kidd Group, also coincidentally in Tallahassee, both made presentations about the US RV park industry at what appears to be the same RV show. Both companies reported strong interest among Chinese investors interested in investing in the US RV park market.
While it might mean some good business and consulting fees for companies pitching the US RV park business to Chinese investors, it’s important to keep one thing in mind – interest among Chinese investors in the US market doesn’t make any fundamental changes to the US RV market for either the parks or the RV industry.
The economics of a park business, the feasibility of success of any project in the US is not at all determined by where the money comes from or how much the developers invest in the project. Perhaps Chinese or other investors may accept a higher level of risk and may be willing to roll the dice and bet that they can change the market or ride out a lengthy period until the market changes. And maybe these investors can bring new park products to the market that RVers and others looking for great outdoor experiences will find attractive, but the bottom line is still the same: if you build it, will they come? And can you build it at a price that makes financial and economic sense?
Maybe Chinese investors will offer exit strategies for large multiple park owners who would like to sell their properties in a package. And maybe some group of Chinese investors will attempt to acquire a large number of US parks to compete with the current big operators. And maybe one or several Chinese investors will put their toes in the US park market by investing in a new, large US park development (maybe like the one proposed for Cape Coral, FL and the subject of a number of trade releases). And maybe they will be willing to pay premiums to gain a foothold in the US industry.
These are all maybe’s. Frankly, I’m not expecting much in the way of Chinese investment in the US park market and if some investment does materialize, I don’t see it having significant impact on the building of new parks and the sale of existing ones. In the end, I think the industry’s too small to excite many Chinese investors with tens or hundreds of millions or more of capital to deploy.
I only hope that if Chinese or any other international investors come to the US market, they come with a background in hospitality and lodging, outdoor recreation and guest services. The last thing the park industry needs are park owners who are not grounded in these skills and areas of competence and who think money can buy success. While operating parks is not the equivalent of practicing brain surgery or nuclear physics, it does have its own unique features and expertise that determine success.
I’ve heard and read about and even met some Chinese businessmen who see great opportunities for the development of an RV and camping industry in China and no doubt a great opportunity exists there. Why else would the RV Industry Association open an office in Beijing. There may be great opportunities to joint venture and work with Chinese businessmen to build RVs in China and to build campgrounds there. I’ve heard that the Chinese planning calls for the establishing of some 5000 campgrounds in China in the next some number of years. Maybe some Chinese investors will try to use the US park market as a laboratory for learning before going back home to China to jump into the business there.