Industry Insites – December 2014

Random Thoughts on the Business…….

The Latest HUD Park Model Issue

Sure hope the industry is looking at exactly what happened here. After a number of years of quiet, what suddenly prompted HUD to revise the method of measuring the size of a park model. I know they claim they haven’t changed anything, but for practical purposes measuring a park model to include the porch is a change in the process.

In Washington, nothing happens without a reason. Who is behind the October memo from Pamela Danner, the new HUD official overseeing manufactured housing? Somehow, I doubt that she woke up one morning and decided to screw the RV industry and the parks. More likely, someone put a document in front of her to get the ball rolling, followed by a visit from someone with a particular interest and then it just happened. Sure would be nice to know what the industry is up against because the same forces are most likely to be on the scene if and when congressional legislation becomes likely. My guess is that the new Congress in January is not going to be spending much time worrying about the RV industry and if the issue is at all controversial in the House or Senate, passage is going to be quite difficult if not impossible. So, who’s behind this?

Perhaps we should start by looking at Ms. Danner. Her long legal and government service career has many intersections with the manufactured housing industry.

What is the RV Park & Campground Business?

I’m pleased that the Pennsylvania Campground Owners Association invited me to present a seminar this Tuesday on Trends in the Park Industry. I’ve done a similar seminar at various meetings in recent years and always find it interesting to use the opportunity to track the relevant changes in the park industry.

As I prepared for the PA seminar, I decided to take a look at the various business lines that park operators are engaged in every day.

Here’s a quick rundown of the lines of business that come to mind: Camping……Outdoor Recreation…..Hospitality……..Entertainment……..Travel…….Amusement Park……Attractions……… Lodging……..RVing……..Tourism……..Sports. And you can probably think of many others.

In thinking about this question, I’ve concluded that a campground or RV park is really an amusement park. Yes, a different business model than we normally associate with that business, but an amusement park none the less.

A campground has activities and events intended to amuse and entertain the audience. The park has food services at varying levels ranging from park-wide meal events (pancake breakfasts, holiday themed meals) to snack bars, ice cream parlors and restaurants of various service levels. A park has a wide variety of amenities and facilities designed to amuse and entertain such as swimming pools and water-related features ranging from large water parks to water slides, splash pads and lazy rivers, hay wagon rides, various styled bikes from three wheelers to water bikes, laser tag, zip lines, holiday parades, basketball courts and soccer fields, themed events like Water Wars, Christmas in July and murder mystery weekends. Most campgrounds operate on a seasonal basis with some special shoulder season events. Stores that sell souvenirs, t-shirts, hats and special fun cups and other unique items are found in m ost campgrounds. Most parks offer a single price that includes all of the facilities and amenities while other parks offer an admission fee (camping fee) plus an extra fee for the amusements and entertainment. And special park discounts at certain times of the year encourage visits for different markets.

Now the amusement park. Try re-reading the above paragraph and substitute amusement park for campground or park. Pretty much the same thing, right?

When you have a chance, go visit an amusement park in your area. Guaranteed you’ll come home with some new ideas on how to please your guests.

Praise for Suppliers

Every now and then on Facebook or Linked in or in some other venue, there’s a supplier posting or talking about how they find campground owners to be among the nicest, most down to earth and hospitable people to be found in every industry. They praise park owners openness and willingness to help others, even their competitors.

Rarely if ever have I seen a Facebook or Linked in post or other comment from a campground owner praising the services of a supplier to their business who plays a role behind the scenes in their success. So, here I go.

Suppliers I met in the park industry, especially those I’ve known for 25 years or more are among the nicest folks I’ve known or worked with in any venue. Their desire to provide the best products and services and competitive prices is unsurpassed in any industry.

As campers have many choices of where to camp, so too do campground owners have many choices when it comes to where to purchase the essential needs of running their business. Many campground industry suppliers have been around serving the industry for many, many years while others are new to the industry, having been drawn to it by the great positive publicity the camping and outdoor recreation and RVing has received in recent years.

The suppliers I’ve known for many years are great folks who, like campground owners, rely heavily on good reviews and repeat business (sound familiar?).

When you can and when you feel its deserved, why not write a comment or review of a supplier experience you’ve had and post it on Facebook or on Linked In. Or visit Yelp or other review sites and share your positive experiences.

Go Suppliers!!!!

The KISS Principal

Time to remind everyone of the KISS principal – keep it simple, stupid!.

Check out your website – is it intuitive, simple and quick to respond to commands, available for Ipads, smart phones and any and all other media, clean and not too cutesy, is any music appropriate and at a reasonable volume?

Arrival and check in process is often fraught with delays and time consuming processes. Is it easy, quick and simple for your guests to arrive?

You get the idea. Take the time to review all of your policies, practices and so forth and see if you can KISS them to make it easier for you, your staff and your guests.

And a word to associations out there – national, regional, state and local campground associations. Want to gain new members? Want to retain current ones? Want to increase involvement and attendance? All programs and activities should be reviewed for KISS compliance.

Small business that comprise the majority of the campground and RV park business don’t have time or the inclination to engage in complex, confusing or lengthy steps to take advantage of the values of the membership. The longer it takes to take an action, the less likely it is that the action will be taken. And the less actions taken by members, the greater the likelihood that they will explore whether or not the membership is worthwhile.

Nine times out of ten, measuring your business processes against KISS will lead to business improvements. Try it.

Industry Insites – November 2014

43 Years…..Moving On

On September 30, 2014, I turned over the management of the Virginia Campground Association to Derek Dick, a former ARVC staffer now living in Virginia. With that, I concluded 43 years in the association management world. Over those years, I’ve been associated with the American Jewish Congress, the American National Metric Council, the Solar Energy Industries Association, the National Association of RV Parks & Campgrounds and finally the Virginia Campground Association.

Association management has been a fulfilling career but its time to turn my full time attention to consulting work in the RV park and campground industry as the industry steps up its growth and development into a modern 21st century hospitality and recreation business. And it’s time to pursue some new ventures and advocacy in the business.

Advocacy

In the August issue of Campground Management and also in RV Business, I wrote a column suggesting that it is time for the terrific Go RVing promotion program to expand its horizons into Go RVing……and Camping promotion.

I feel strongly that the time has come for the three legs of the RV industry stool – the manufacturers, dealers and accommodations – to re-establish the close relationship that created the Go Camping America program in the 1980’s and was the foundation for the eventual emergence of the Go RVing program. While it’s clear that RVs have multiple uses depending on the desires of the owners of the rigs, it’s equally clear that the dominant use of an RV is camping in one form and one place or another.

RV parks are popping up in many places. NASCAR and other racing venues are moving to formalize camping in RV areas that were previously informal parking areas for tailgating. The same is happening around major universities where RV tailgating is a major event combined with college football. And golf resorts, ski resorts, amusement parks are increasingly recognizing the growing popularity of RVing and the need to provide campgrounds or RV parks (the terminology is not really important). Federal, state and local parks are sprucing up their camping areas to serve the growing RV market.

It’s kind of like the old days in Las Vegas when hotel rates and food costs were incidental and the profits were all from gambling. Many entertainment and sports venues provided for RVs but either didn’t charge or charged very little. Now, there’s an awakening that there’s money to be made in RV parks – why give away what can become a profitable revenue source.

The Go RVing program has over the years focused on the many uses of an RV – taking the kids to soccer games and tournaments, tailgating, “pursuing passions” of all kinds, getting “away”, and so on. But most of these uses include nights out in campgrounds and RV parks.

Go RVing has the mechanism in place to raise additional funding to expand the Go RVing program to include camping. It’s up to the leaders of Go RVing and, more importantly, to the leaders of ARVC and the park industry, to get together and figure out how to expand the program to include camping. Demonstrating to potential RVers the many diverse campgrounds available for their enjoyment and use should certainly contribute to a better understanding of the joys of RVing and help increase RV sales while supporting the growth of the park industry.

It was somewhat disappointing to note that the column proposing this expansion of Go RVing received not a single comment or response – pro or con – from readers. As the campground industry would be the major beneficiary of the expansion, I expected that there would be some response from that end of the industry.

As a long time member of both ARVC and RVIA for many years, I would encourage the leaders of those organizations, chief executives and elected leaders to let the industries they represent know where they stand on this proposal to expand Go RVing. If it’s a lousy idea, say so and tell us why. If the idea is positive, say so as well.

At least from the park industry perspective, expansion of the promotion program should be something with broad support. The silence is deafening.

RV Site Ownership

Back in the early part of this century, RV condominium site ownership was growing rapidly in many parts of the country. As the real estate market pushed land and home prices skyward, many park owners in key locations were selling out to developers who had plans for a higher and better use of the land. RVers, especially in Florida, became concerned that their winter RV parks would be sold out from under them and they would have to relocate elsewhere. The popular thinking was that RV sites in desirable areas would become fewer and fewer and RVers would be forced to settle for second rate locations.

And thus was born the RV condominium park where an RVer could buy a site, become an owner of the campground and assure its continuation for years to come.

The own your own site business flourished in many areas from 2001 to the real estate implosion and the recession of 2007 to 2009. RV condo site sales dropped dramatically – in fact almost disappeared. Developers were forced to drop prices significantly and while that helped in some cases, for the most part RVers like the rest of the country, were not in a spending mood. If the price was down 50% today, why not wait until it goes down 75%?

As the recession has eased, site sales have edged a bit in certain areas where price declines have put the sites in the range of affordability for more RVers. But it is now appearing that except in some very special circumstances where the location of the park is too good to pass up, the price declines have not been sufficient to show RVers that it is less expensive to own then to rent.

And as the building boom in Florida and elsewhere has not come back to the fever pitch of the period before the recession, few RVers are worried about their favorite RV park disappearing to make room for re-development. And the view of RV site ownership as an investment with strong upside

The keys to a successful RV site sales program are several. First and foremost, as noted above if the lot price is set at a point where owning is as good or better than renting. For a broad segment of RV owners, this is most important in a successful sales program. Second, the location has to so strong that it has a wide appeal to RVers of all types and where pricing to secure the location is reasonable and within reach of a large market segment. Third, the development has to be so exceptional in terms of location, limited number of sites, amenities, aesthetics, service and high end appeal that it will capture the attention of the small cadre of RV owners for whom price is no object.

The RV condominium business is likely to continue to come back as RV sales continue to expand. In certain areas, RV site supply may fall behind site demand and the condo market could heat up again. In this case, owning sites in a quality park with high demand for rentals could prove to be a solid investment over time.

Keep a careful eye on this market segment as converting an RV park to an ownership resort is a good exit strategy in the right circumstances.