Category Archives: 2012 InSites Archives

State parks, fuel economy and other issues for the RV industry

As 2012 winds down and the winter holidays approach, I want to wish all of the park industry people a very Merry Christmas, Happy Chanukah and a wonderfully happy New Year. It’s been a tough year in many places and a very good year in others – the one thing that is consistent in most of our lives is inconsistency from one year to the next. I know I join with everyone in the hope and prayer that 2013 will be more consistently peaceful, healthful and prosperous then years we’ve experienced in recent times and that everyone enjoys a year of health, happiness and success.

What are the State Parks Thinking?

If you follow the daily campground and RV industry email newsletters that hit our email boxes daily, you can’t help but sense that the state park systems around the country are gearing up to expand their services to RVers and campers and move more and more in to the heretofore space reserved for private commercial RV parks and campgrounds. Despite budget crunches almost everywhere, it seems that state parks are trying to ride the wave of increased interest in camping by upgrading their campgrounds and seeking to build revenue to support the parks.

I recently had occasion to work on a project that involves the upgrading of an existing state park campground. The state is providing $1 million to upgrade a 50 site campground located in a state park about 50 miles from mid-sized city. The park already has a swimming pool, picnic areas, athletic fields, mountain biking and hiking trails and other typical park amenities and recreation.

The campground offers 50 sites of varying sizes and can accommodate RVs of almost any size. The park has 2 ADA accessible sites and all sites have 30 amp electric and water hookups and about half the sites have sewer hookups as well. There are two bath houses and one covered pavilion with a very attractive large fire pit. The park charges just $20 a night. The day I visited the park midweek in October, about half the sites were occupied. The two very spacious and very well appointed ADA sites were both occupied by folks from Florida who were spending two weeks at the park before heading back home to Florida.

I am still trying to figure out the rational for a state to spend $1 million to upgrade 50 campsites so they can accommodate the largest motorhomes at just $20 a night. And then fill the place up with out of state visitors taking advantage of the state’s generosity? I can’t understand the reasoning here. I don’t know of any commercial park that would spend upwards of $20,000 a site to upgrade existing sites and then charge $20/night for the sites. Not sure how that math works out for a private park owner or for the taxpayers in this particular state.

I did a little checking around and found that RV camping at state parks in the surrounding states ranged from a low of $23 to a high of $38.50 – and here’s this state offering overnight RV camping in fully developed sites at just $20.

Who Verifies RV Fuel Economy Claims?

A recent Winnabago announcement reports on its new fuel efficient RVs: “The combination of the powerful six-cylinder turbo-diesel engine with Winnebago Industries’ build quality and floorplan selection make these products a ‘can’t miss’ at this year’s California RV Show,” said Winnebago Industries’ Vice President of Sales and Product Management Scott Degnan. “Winnebago Industries produces more motor homes on the economical Sprinter chassis than the rest of the industry combined, with consumers reporting between 15-20 mpg.”

In the auto industry, the Environmental Protection Agency oversees auto industry compliance with posting of fuel efficiency data and compliance with the corporate average fuel economy standards. Fuel efficiency is posted on a window sticker on every new vehicle. Many Americans count on accurate fuel efficiency reporting in making purchase decisions.

The time is either rapidly approaching or is already here for the RV industry to develop a third party verification system to support the energy efficiency claims of manufacturers in a manner similar to the data posted on the sales stickers of autos. Either the industry should act on its own to provide consumers with reliable efficiency information, or face the likelihood that the federal government could step in as they have with the auto industry.

Changes in RV Preferences Hit the RV Market

In recent months there’s been some below the radar reports on a very important change becoming evident in consumer RV preferences. The number of class A and class C motorhomes has declined dramatically in recent years and the impact on the park industry may be quite significant.

The ratio of towable sales to motorhome sales for the last decade of the 20th century was about 2.2 towable sales for each motorhome sale. It was this balance that led to many campgrounds undertaking to enlarge RV sites to accommodate the increased sales of larger motorhomes and to many new sites being built far larger than previously considered necessary.

For the first five years of the 21st century (2000 to 2004) the ratio of towable sales to motorhome sales ranged from 3.8 to 4.4 towables sold for each motorhome sale.

From 2005 to 2009, the ration began to widen from a low of 5.5 towables sold to each motorhome sold in 2005, to 12.7 towables sold for each motorhome sale in 2009!

For 2010 and 2011, as sales of RVs generally picked up, the ratio dropped a bit to 9.4 and 9.9 towable sales for each motorhome sale. The estimate for 2012 sales is 9.4 trailers for each motorhome sale.

Will motorhome sales rebound? Is this a new normal?

My sense is that the baby boomers who were driving motorhome sales prior to the recession, have re-evaluated their options for retirement and for consumption of luxury goods and motorhome purchases are not as possible or desirable as they were in earlier years.

On the other end of the age spectrum, younger families and empty nesters have become more cautious and realistic about their needs and capabilities. The recession has, in my view, caused significant re-evaluation of priorities and the need to protect against future economic possibilities. Smaller and less expensive is better, energy efficiency is important to control costs, and in many cases, renting is far better than owning expensive toys.

The park industry should carefully consider and watch the purchase trends regarding towables and motorhomes. Class A only resorts may be very vulnerable in the coming years as the existing stock of class As declines. As current class A owners and class A only site owners age out, where will the replacements come from? Will more towables lead to more seasonal camping? Will towable buyers move up to motorhome ownership as they age?

Interesting trends call for careful monitoring, research and adjustments in the coming years.

One Other Thought….

From a park industry executive as quoted in a recent newspaper article:

“We felt and still feel there is an opportunity to disrupt an industry that has not changed in 50 years.”

The article goes on to say that the executive noted that there wasn’t a hospitality company that oversaw many of these sites and that most were owned by people looking for passive real estate investments.

What’s your perspective on this? Do you agree with this assessment? Has the park industry been stagnant for 50 years? Have you seen changes in the industry over that time? Are many of the sites owned by people looking for passive real estate investments? What does it take to be successful in the park business?

Please share your thoughts……david@davidgorinassociates.com. I’d enjoy hearing from you and exchanging views.

Happy New Year!

David Gorin is the former president of ARVC and is currently the President of Best Parks in America and the principal of the leading industry consulting company, David Gorin Associates LLC. He can be reached by email at david@davidgorinassociates.com or at 703 448 6863.

Who says campground management isn’t fun?

In case you missed this, a British company has introduced a new computer game called Camping Manager 2012. According to a recent release, the game provides the opportunity to build and manage your own vacation paradise. Keep your guests happy and you could earn a fortune! Choose your camp site and begin with the construction of your first tents and caravans.

Camping Manager 2012 by Excalibur PublishingCamping Manager 2012 by Excalibur Publishing

Managing a campground reduced to a video game? I don’t know about you, but I’m conflicted about this. On the one hand, having a game about park management is flattering, kind of like the Robin Williams movie, RV, was flattering in a kind of backhanded way.  On the other hand, reducing what you do to a video game seems a bit demeaning.

I guess it’s better to be flattered than to feel demeaned. Let’s go play!

Surcharge Trends and Low-Cost Camping

A recent hospitality industry newsletter announced that “Hotels on track to take in nearly $2 billion in surcharges.” Surcharges = ancillary income in hotel speak. And I thought campground owners were good at developing ancillary income.

From the consumer point of view, the bad news is that the ancillary service fees continue to rise, increasing 5.4% in 2012.

The bad news from the hotel point of view and good news for guests, is that the hotels appear to be running out of things to charge for, at least for now.

The list of things that parks can charge for is pretty long. Are parks going to run out of new ancillary income sources?

On the hotel side, a recent study done by the American Hotel & Lodging Association (AH&LA) shows t hat 23% now charge for in-room Internet access, compared to 19 percent in 2010. And during the same period, the number of hotels charging a fee to use fitness facilities climbed from 21 to 25 percent.

And here’s an interesting finding from the study: fewer hotels are charging for pets or assessing resort fees.

The study indicates that more and more hotels are allowing pets without charge. Most RV parks and campgrounds are not even allowing pets in rental accommodations. If the hotels allow pets for free in guest rooms, it would seem that some in the park industry are likely to follow suit. As more and more parks move into the rental unit business, they are likely to become more and more “hotel-like” in their practices.

Resort fees? Haven’t seen too much of that yet among independent parks, but I do know that some large chains are assessing resort fees and becoming more all-inclusive in providing recreation and other services previously offered a la carte.

Here’s something that should sound familiar: “Not surprisingly, perhaps, guests find fees for Internet access among the most infuriating. Expectations over Internet access are being set by other industries,” said Jessica McGregor, senior account manager at J.D. Power and Associates. “You go to a coffee shop or restaurant and, oftentimes, the Wi-Fi is free. Paying for it at a hotel goes against what people have come to expect.”

And they’re none too happy about it. According to J.D. Power and Associates latest survey on hotel guest satisfaction, released in July, guests who received complimentary Internet access reported an average score of 764 (on a 1,000-point scale) versus 688 for those who were charged a fee.

Sure be interesting to see how guests in the park industry factor internet into their satisfaction ratings.

Great parallels between the park business and the hotel business. The park industry needs to pay more attention and take the lessons learned in the hotel industry to heart.

RV Newsletter Calls for More Inexpensive Camping

The editor of one of the most widely read weekly RV consumer newsletters recently wrote an editorial in which he challenged the park industry to find “a creative business person (needs) to come along with a plan for an extensive network of low-cost, no-frills, self-check-in campgrounds, and then run with it.”

Here’s my response to this particular editor who is really a thoughtful, responsible and very experienced writer and RVer.

Here are a few challenges that even the most creative entrepreneur would face in trying to establish the kind of network you envision.

  • 1. Nothing beats free. No matter how low overnight camping prices go, free is still a better deal. How do you compete when your competition is offering your services for free? Motel 6 (the example that you used to illustrate inexpensive, frill-free accommodations) has no free competition. No one offers free motel rooms at any level of amenities. As you well know, Flying J, Wal-Mart, highway rest areas, and parking lots of all kinds are the overnight home of choice for many RVers on the road. They’re free. How many RVers would gladly pay $15 or $20 for a night when they can camp for free down the road?
  • 2. No matter how we count the numbers, RVers and RVing comprise a very small universe when compared to the hotel and lodging industry. Maybe there are 10 million licensed RVs out there across the US. On any given night throughout the year, how many do you think are on the road looking for inexpensive overnight places to stay? It is highly improbable that there are sufficient numbers of RVs traveling each day to support any kind of extensive national network of inexpensive parks. The scale just isn’t there. You need prospects and potential customers to make a business work and the numbers just don’t work when you’re talking about RVs on the road. You can only fish where and when there are fish to be caught. How many RVers are there out there in January, February and March along the northern tier of the US? How many are there in mid-summer in south Texas, Florida and Arizona? We are talking about a very small market with very definite seasonal preferences.     Just to put the RV industry into a larger perspective, in 2011, there were 5.5 million cars and light trucks sold in the US. The same year, there were 252,000 RVs sold. Trip Advisor lists over 53,000 hotels. Compare that to about 8500 private commercial campgrounds. And according to Wikipedia, there are about 300 million cars in the US – compared with an estimate of maybe 10 million RVs. The RV and park industries are small change and the numbers just do not justify or point to a segment of parks that could be priced at less then what is currently offered.
  • 3. The regulatory costs of operating a small hospitality based business have to be amortized over a business of significant size and revenue in order to make any sense. Operating permits, licenses, personnel costs, health requirements, insurance, taxes, and other non-productive and non-revenue producing expenses add up and have to be covered regardless of the fees charged.
  • 4. What constitutes inexpensive? I checked the Indianapolis area to see what Motel 6 offers. The Motel 6 website showed 14 motels within 50 miles of downtown Indianapolis. They ranged in price from a low of $39.99 to $54.99. Assuming an RV park could be priced at 50% of the cost of a Motel 6, that would put the competitive camping price in this area at between $20 and $27. Is that inexpensive enough? Is that the price range you had in mind? I do believe in most parts of the country during most if not all of the year, parks are available in this price range, especially for those traveling with one of the many discount cards available. Could this price point compete with free?     There are campgrounds at all prices ranging from federal, state and county campgrounds to private sector campgrounds. Like any other product sold to consumers in the US, campgrounds come in all shapes, sizes, amenities, facilities and prices – ranging from free to the upper ranges.     I’m not sure you’re going to see a national network offering camping at anywhere below half of what a reasonably good motel would charge. Unless of course, Wal-Mart decides to move into the market in a more formal way.

Chinese Investment in US Parks

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.

New RVIA Destination Camping Committee Takes Shape

As a long time member of the Recreational Vehical Industry Association (RVIA), I was pleased to sit in on the first meeting of RVIA’s Destination Camping Committee.  Following the meeting, I volunteered to serve on the committee and I’m pleased  about being accepted as member of new, joining KOA’s Mike Atkinson who was the sole campground representative on the committee.

The committee will be meeting in October to review the results of the first survey being conducted to get an idea of how big the destination camping market might be.  Being conducted by Precision Research, an Arizona-based firm that has done previous work for RVIA, they are surveying 400 RVers and 400 non-RVers to try to get a sense of the market.  While this survey is very limited in scope, it’s a start and may provide at least some base of information about how consumers view destination camping.

At the first meeting of the committee, there was, if I recall, considerable discussion about terminology – the difference between destination camping and seasonal camping.   As far as I know, in the park industry these terms are basically interchangeable.  Park owners know what the terms mean – Rvers or campers who put an RV of one kind or another on a campsite for an extended period and either stay for an extended period or return frequently to use the  unit.

There is a different but similar term – “destination campgrounds” –  those campgrounds that are destinations in and of themselves because vacationers set out specifically to visit a particular park or campground.  Destination campgrounds are typically parks for leisure travelers and vacationers, as opposed to destination camping where the accommodation is fixed and the consumer returns repeatedly to the same location.

One thing the new committee will need to address is how destination camping and destination camping units are regulated.  Unlike traditional RVs, fixed units that aren’t obviously mobile, are most likely to be subject to local regulation and there is little uniformity among jurisdictions.  Type of unit, type of hook-ups, taxation, code compliance, length of stays, utility issues, etc. are all generally regulated on the town, county or perhaps state levels.  It is the local regulation that is often the challenge for the park owner wishing to add, maintain or expand destination or seasonal camping.

I look forward to participating in this new committee.  As the world’s changed over the last 5 years or so, destination camping has taken on a new meaning for the future.  Is the trend for real?  Is it sustainable?  Is it a reaction to recent economic and energy issues?  What future form will destination camping units take?  What happens to the RV park industry if RV sites are converted to seasonal or destination camping?  Are parks moving toward the hospitality industry rather then the RV industry?

If any readers have any comments or suggestions about this subject for this new committee, please leave a comment below and I’ll be happy to convey your views.

Shifts in the School Start Date Debate

Over the years, whenever the discussion of pre-Labor Day school openings came up, the response of the park industry and others in the tourism business who were opposed to these mid-August openings was that when there are educational benefits to summer openings, the tourism and attractions industry would have to reconsider its opposition.

Now what seems to be developing is this:  while extending the school year is difficult because of teacher contracts in just about every state, starting the school year earlier allows students and teachers more time to prepare for standardized tests that usually take place before December.  Starting school around August 15 adds two to three weeks of instructional time before the testing later in the fall.  Educators and parents feel that their students need the additional time to be properly prepared for the tests.

This change to earlier opening dates is going to be harder and harder to challenge in the future.  With parents and educators on the same side of the table, it’s not going to be easy to adhere to the post-Labor Day opening schedule.

In Virginia, during the 2012 legislative session, the VA house and senate debated a local option school opening bill.  The bills were defeated and the post-Labor Day school opening date is still the law throughout Virginia.  I wonder how much longer the tourism and attractions industry will be able to persuade legislators on this issue.

So, more and more schools are moving to mid-August openings to gain the extra instructional time and schools are closing earlier so that the total number of class days remains unchanged in almost every case.

Can the park industry adapt to this changing pattern? Should parks begin to start their peak season activities and pricing in early June or maybe starting with Memorial Day? Should shoulder or off-peak now begin on August 15th? What do you think? Should the park industry continue to fight this battle? How can the industry adapt to a more universal August school opening date?

“Glamping” Has Arrived.

One of the current buzz words in vogue these days is glamping – camping with a touch of glamour, or over the top tents with four poster beds, fancy linens, fine furniture, tent service and so forth all in a dressed up platform tent in a beautiful outdoor environment.

Recently in a small article on words and language in the.

Where do you find glamping accommodations?  In a glampsite of course.  And at night where do you make your evening s’mores?  Around the glampfire, where else?

Now here are my new terms…are glampsites found in glampgrounds?  We camp…do we glamp?  Is your camp store now your glamp store?   And are camping cabins now glamping cabins?

And what’s the difference – other than price – of a luxury RV or camp site and a glamp site?

Time for A Change of Pace

It’s been more than 10 years of writing Inside the Beltway for Woodal’s Campground Management and primarily reporting on what’s going on that impacts the park industry “inside the Beltway”, the insiders term for what goes on in Washington DC and the federal government (the Beltway’s that circular highway that surrounds the nation’s capital). Being inside the Beltway denotes “insider” knowledge of what goes on in government. Being inside the Beltway also denotes a cynical if not sinister view of what’s happening in our government and country.

It’s time for a change as I spend less and less time inside the Beltway, and more and more time in the real world outside of DC. So with this column I bring my era of reporting on Washington and its impacts on the park industry to an end and it’s with a great deal of pleasure that I embark on a new direction – offering in-sites, observations, comment and commentary on the business side of the RV park, campground, outdoor hospitality, recreation and tourism industries.

This change of direction coincides with the new ownership of Campground Management. Since its beginning, Campground Management has been published monthly by Woodall Publications and the monthly tabloid was known as Woodall’s Campground Management. Woodall’s is to be congratulated on publishing this monthly and providing an information service to the park industry for many, many years.

It is fitting now, with the demise of the Woodall Campground Directories and merging of Woodall’s into Good Sam Enterprises, that the ownership of the monthly newspaper transition into the hands of another company � G & G Media, led by longtime RV industry journalist Sherman Goldenberg. Sherman has a long and admired history with the RV and park industry having served as the editor of RB Business magazine for many years and having been the publisher of Campground Management for the last few years.

As Sherman and his colleagues assume ownership of Campground Management, the information available to park owners and operators through a publication exclusively serving the park industry interests, is for the first time, coming from an independent journalistic voice. Yes, some advertisers may try on occasion to exert some measure of influence on publications where they place their advertising, but no longer will Campground Management editorial be controlled and influenced by the brands, subsidiaries and business interests of the former Affinity Group and the current Good Sam Enterprises. No longer will the primary purpose of Woodalls Campground Management be to promote Affinity or Good Sam products or services and to put the Woodall name in front of every park owner and operator every month as a way of enhancing that brand’s image and as a way of greasing the advertising sales process that powered Woodall’s – ad sales in the Woodall Campground Directory.

Aside from Sherman’s monthly publisher’s column in RV Business, an occasional editorial by Greg Gerber or a guest writer in Gerber’s RV Daily Report, and perhaps an infrequent letter to the editor that appeared in Campground Management, the content of the daily and monthly industry information channels – WCM’s daily email news briefs, the RV Daily Report, RV Business Daily email service, the weekly Industry E-News and the ARVC Voice – are primarily filled with new releases issued by various sources or association information and promotions. There’s little if any analysis of what’s being reported, little comment on the information being shared, and little independent editorial voice to discuss industry issues, concerns and to raise questions that might need to be answered to help understand what is really going on in the park industry.

I hope in the coming months to provide analysis and comment, add an independent voice and ask the questions that I believe many in the industry would like to see asked and answered.

As I launch this new column, it is important to embrace full disclosure as an important part of being an objective voice in this publication. In each and every issue, there will be at the end of each column, or in the column when appropriate, a statement of disclosure so that readers can be comfortable that the editorial content is offered fairly and openly. After 25+ years associated with the park industry, I have no axe to grind and I hope I have a reputation for openness and fairness.

As the months go by through the rest of 2012 and into 2013, I hope this column is of interest to the readers and look forward to engaging in email, phone and when practical, personal conversation with you. Please feel free to communicate your thoughts, ideas, comments, and criticisms so that we can together have robust discussion of the many issues of interest to the folks in the park business.

Industry Meeting Changes Coming?

The annual RV Industry Association trade show held for years in Louisville right after Thanksgiving is under considerable pressure from Elkart, IN area manufacturers who several years ago launched Open House programs at RV factories in Elkhart. As the Open House program has expanded and dealer attendance has grown, RVIA is experiencing some decline in the number of attendees at the Louisville show.

And with the Open Houses taking place in September around the time of the annual RV Dealers Association convention in Las Vegas, that association is also facing some pressure on its meeting attendance.

Add to this the recent incorporation and welcome back of park trailer manufacturers into the RVIA family, it’s likely that the National Association of RV Parks & Campgrounds (ARVC) may lose some park model exhibitors to the RVIA show now that the welcome mat is out for them in Louisville.

RViA has been exploring a possible move to a new location and a new time, probably in September or October. That move and date change has been put on hold and RVIA has recently announced it will remain in Louisville at least through 2014.

Discussions have been reported between RVIA and RVDA about a joint meeting and I would expect that it will inevitably happen in the next 3-5 years at the latest. It’s just sound common sense in today’s economic environment not to take advantage of the efficiencies of such a joint meeting.

Surprisingly, the reports of an RVIA – RVDA coordinated meeting has been silent on the possibility of adding the third industry leg to the meeting mix. There’s been no mention that I’ve seen or heard about adding the park industry to this mix.

As RVIA and RVDA experience some turmoil and likely changes in their meeting schedules, ARVC is also experiencing similar issues. Having held the annual ARVC convention in direct competition with the RVIA Louisville show for some years, ARVC is committed to one more year (2012) in Las Vegas on the same dates as the Louisville show, but is then planning a convention and show in Knoxville earlier in November 2013.

So is it out of the question to have an all-industry working group explore the feasibility and desirability of an all-industry event bringing manufacturers, dealers and accommodators together in one city during one period? Imagine an industry-wide annual celebration. Imagine a joint meeting of the boards of the associations. Imagine seminars with the top minds sharing ideas for continued industry growth and prosperity? Sure, putting this together would be complex and might have to entail some give and take on everybody�s part, but the excitement generated and the spirit and cooperation could propel each industry segment to greater expansion.

Watch Out for the Feds! They May Be Coming at You!

It’s been reported in recent months but it’s worth repeating this industry alert: There are real efforts underway in the US Forest Service to experiment with new campground models including private investment in campground upgrades and operation, seasonal campsites on public lands, RV and other recreational equipment storage, and longer term concession or operating permits. Recent meetings between US Forest Service and Department of Agriculture senior executives and private sector interests included representatives from the largest campground operating companies, large concession companies, ARVC and other related associations.

It is clearly time for the park industry to revisit the fair competition issues that have hovered over the park industry for a generation and prepare for what could be a significant change in public policy that may bring about a change in the competitive balance between public and private interests.

SIDE BAR

In the Spirit of Full Disclosure…who is David Gorin and why is he writing for Campground Management?

Just to put all the cards on the table in this inaugural column, here are my disclosures.

From 1987 to 2001, I was the President & CEO of ARVC and during those years played a key role in every association initiative from the changing of the name to ARVC (from the Natl Assn of Campground Owners), to the growth of the CPO program, to the expansion of Go Camping America to an online consumer directory, and to the founding and operation of the School of RV Park & Campground Management. I encouraged the ARVC Board to create the ARVC Foundation and I wrote the initial IRS non-profit application to create the Foundation. And I was instrumental in writing many of the association’s policies including its statements of Government Competition. I left ARVC of my own accord at the end of 2001 to pursue other interests in the park business and in other ventures.

From 2002 until the end of 2010, together with partner Aubrey King, we represented ARVC’s interests in Washington to the Executive and legislative branches of government. In 2011, ARVC dropped our services in favor of a Washington-based law and lobbying firm.

Since 2002, I’ve operated David Gorin & Associates, a consulting firm that now exclusively serves investors, developers, owners and others with an interest in the RV park and campground business. I’ve worked with over 150 clients during this period.

In 2004, I created Best Parks in America and I’m the President of that national brand and marketing association for highly-rated RV parks. Best Parks is an association of parks. I own the intellectual property for Best Parks in America and other brands that may be commercialized in the coming months and years.

In 2007, together with a partner, we acquired an older Florida RV park, demolished it and re-developed the park into the showcase property it is today. I was the managing partner from 2007 to 2010.

Best Parks in America is a Supplier Member of ARVC. David Gorin Associates was a Supplier Member from 2001 until 2010 when the recession caused a decline in consulting. David Gorin Associates has been a member of RVIA since 2002 and continues to hold that membership.

Since 2002, David Gorin Associates has provided management services to the Virginia Campground Association.

I can be reached at david@davidgorinassociates.com and at 703 448.6863. Let’s talk.

Farewell to RPTIA & Hat Off to Bill Garpow

On July 1, 2012, the Recreational Park Trailer Industry Association (RPTIA) ceased to exist, having officially closed its door and cuddled back in to the offices of the RV Industry Association from which it was evicted some number of years ago – an eviction about as unceremonious as was its welcome back into the “official” RV family.

For the park industry, the park trailer never ceased to be an RV. For RVIA, that was not the case.

Years ago (maybe 20 or so), RVIA was concerned that a relationship with RPTIA was going to taint the purity of the RV and somehow effect RVIA’s ability to protect and defend the RV as a camping unit. At about the same time, KOA and the rest of the industry was working hard to establish the cabin – bare bones but a cabin nonetheless – as a legitimate camping unit. And to maintain the park trailer or park model as a legitimate RV camping unit.

I remember numerous hours spent encouraging legislators on the state and local level to define camping as something other than where you slept at night. It was a total outdoor environment and there were any number of accommodations options including tents, RVs of all kinds including park trailers, and cabins that were suitable for enjoying campgrounds. Industry friends at RVIA didn’t quite see it that way, either fearful of losing special privileges for RV ownership or of losing RV sites to other alternative camping options. And then in a series of meetings in Elkhart and I recall one in Toronto, emerged RPTIA with its new Executive Director Bill Garpow, a former Executive Director at the FL RV Trade Association and a Vice President at the RV Industry Association. From the campground industry perspective, the emergence of RPTIA and Bill Garpow started a new era in the park industry.

As Bill heads off into retirement and RPTIA folds its tent and merges into RVIA, it’s fully appropriate for the park industry to stand up and loudly applaud Bill’s terrific work in leading RPTIA and to thank Bill and his colleagues at RPTIA for their outstanding leadership and dedication to making the park trailer, park model, cottage, cabin or whatever you choose to call it a main line camping unit, popular with park owners, dealers and most importantly the thousands of guests who are introduced to RV parks and campgrounds through a park trailer rental as a great way to enjoy the outdoors with family and friends. And of course, the popularity of these units among families, retirees and empty nesters has created new market segment in the park industry. One only has to look at the increase in “destination” or seasonal camping to fully appreciate the role the park trailer plays in the 21st century park industry.

Bill, you deserve a great big thank you from the park industry. So here it is, at least from yours truly – thanks very, very much for all you’ve done and the very important contributions you’ve made working tirelessly on behalf of your manufacturer members, park owners across the country, state campground associations and executive directors who you supported without hesitation whenever your expertise was needed, and the guests who today have the park model as an affordable way to enjoy their outdoor recreation experiences.

Thanks, Bill, and best wishes for a wonderful future and a happy and healthy retirement. Stop by when you’re in the area. And anytime you and your wife would like to spend some time at a Best Parks in America resort, give me a call so we can recognize your contributions to the park industry.

(If I were a manufacturer, I’d name a unit after you – the Garpow, a park model with a long life expectancy, a passion for camping and exceptional design for guests to enjoy while on vacation or in retirement.)

One last comment on this change from RPTIA to RVIA. Welcome to Matt Wald, the new executive director for park trailers at RVIA. Matt’s been with RVIA for a number of years, and the industry can relax that the future of the unit is in good hands. We wish Matt great success in leading this important industry segment and filling the big shoes left by Bill.

State Parks Going Private?

After a number of years of budget anguish across the country as tax revenues fell during the recession, as many citizens began calling for tax reductions and cuts in government spending and as jurisdiction after jurisdiction has tried to set fees for park use to bolster revenues to maintain the parks, what appears to be the first state to actually try privatizing not only campgrounds and stores, but the entire operation of a park appears to be America’s pacesetting state – California. No surprise here. With a huge budget and ballooning deficits, a forceful and experienced governor, and a population that is simply not happy to see its cherished parks closed, California is accepting responses to an RFP offering long term operating contracts in return for capital investment to upgrade and maintain the parks. And from what I hear and read, we’re talking fairly complete independence from public meddling for the winning company. The key will be customer satisfaction that will determine the company’s ability to keep and continue to operate the parks.

At the same time that CA is looking at this progressive move towards improving the parks and providing new and expanded recreation opportunities, the US Forest Service, spurred on by the American Recreation Coalition (ARC), is now considering a number of pilot projects that will involve concession companies and would potentially enable campers and RVers to enjoy seasonal camping in campgrounds in the US Forests, leave their RVs in storage at their favorite forest, and would enable the concession operators to add new amenities and recreational activities traditionally found only in commercial campgrounds.

Budgets, taxes, job and economic realities and a sympathetic administration in Washington are all now coming together in what may be a turning point for the park industry and what could spur great growth in the number of parks and campgrounds and potentially create a new competitive reality.

RV park and campground industry beware…although there could be a new sheriff in town soon the doors of privatization and free market competition appear to be swinging in a different direction. If that happens, there will be a significant change in the competitive balance between public and private sector parks and campgrounds.

Disability Advocates Protest AH&LA’s D.C. Offices

A small but significant note. On June 19, about 200 people protested outside the American Hotel and Lodging Association’s Washington, D.C. offices June 19. They were angered at the association’s efforts to delay installing permanent pool lifts at hotels across the nation. AH&LA countered they are trying to avoid legal liability. Not an argument that’s likely to calm down the disability community that’s heard that argument frequently over the years. No one likes to be accused of creating liability for some one else – especially an individual who’s disability might be a result of an illness over which they have no control, aging over which they have no control, or due to military service.

Once again, my plea to the park industry: to the extent that being fully compliant with the ADA does not present an undue hardship or cause unreasonable financial hardship on the business, each and every RV park and campground should be as close to 100% accessible as possible. There’s a large market of new guests out there waiting to find a welcome mat out so they and their families can enjoy the opportunities of outdoor recreation and experiences.

Good Sam Now a Membership Network?

Seems to me that the Good Sam Club is now in the membership park business. The new incentive program being offered to park owners who sell Good Sam memberships is moving that group very close – not exactly but close – to the business model of making the parks membership parks a la Coast to Coast. Here’s how it works: buy your GS membership here, pay me and I keep your first year’s dues, and then go use your membership at other Good Sam Parks. At the end of the year, renew your membership directly with GS and I (the original seller) don’t receive any residual income from enrolling you in the first place.

Your campground is now in the business of selling (renting) RV sites, cabins and memberships. Why stop at just Good Sam memberships? How about selling AAA memberships? Maybe a Coast to Coast membership? How about a new business model marketing various memberships of value to RVers and campers on your park website? Maybe in a small office on the campground? Maybe at fairs and festivals. Or in your booth at an RV show?

My only caution on this model is to never forget why you are in business and who your customers are. It’s easy to get distracted and easy for front desk personnel to forget the primary purpose of their contact with the guest.

In my years in the business, I don’t think I can recall a really successful business model where park personnel were selling or marketing products or services for a third party.

There’s good revenue to be made is selling memberships. Just be sure where that fits into your parks’ business plan.

Correction & Apology

Last month I wrote a brief comment on a consultant who was wearing a shirt with the Signature Resorts logo and criticized the individual for suggesting that investing $20 million in a class A only RV resort in Florida was a sound business model. I based some of my comment on my assumption that the individual was associated with Signature Resort in Naples, FL.

I’ve since learned that the logo and name Signature Resorts is the company name of the individual wearing the shirt and he’s not related to the Naples resort.

While I still believe the Cape Coral class A only park being promoted is a serious mistake, to be clear it is not at all associated with the Signature Resorts in Naples and Michigan nor is the consultant in question.

One Last Comment on One Unusual Story

An Orlando-based property management company with a focus on managing self storage facilities, recently added an RV resort management contract to its portfolio in Central Florida. The company will be managing the Floridian RV Resort in Saint Cloud, Fla. Floridian RV Resort is a 650 space RV and 130 space mobile home park community that was established in the seventies, and has been attracting a customer mix of winter birds and semi-permanent residents ever since.

The principal and head of business development for the management company is quoted: “We have been successfully managing self storage properties for over 15 years. Expanding our property management services to RV Parks was a natural progression. Both commercial property types require focused property management with attention to minimizing expenses and providing excellent customer service at an affordable price point. Our strengths come in to play in setting high occupancy goals and in providing extensive training to our managers to enable them to attract and retain customers on an ongoing basis. The transparency of our methods is what is most appreciated by our clients the property owners.”

Does that strike anyone other than me as strange? Managing a self-storage facility is the same as managing an RV park? Customer service at a self-storage facility is the same as customer service at a hospitality business?

A word to ARVC: consider offering the Outdoor Hospitality Education Program to the self-storage business. This could be a whole new market – imagine the National School of RV Park, Campground & Self-Storage Management.

What are they thinking…

While not generally the subject of this column, I can’t resist these comments.

A recent report in the RV Daily Report and in the Woodall CGM daily described a proposed 71 acre $20 million high end class A RV resort to be developed around a lake in Cape Coral, FL. In the full article linked to these reports, there’s a video of a gentleman wearing a Signature Resort shirt talking about how class A motorhomes start at $150,000 and go up to $2 million or more � the target audience for this proposed resort.

The irony of the Signature shirt on the video is that the two existing Signature Resorts, one in Naples,FL and one in Michigan, were built by Monaco Coach Company in the 2007 to 2008 period. Monaco had more than $20 million in the Naples resort and probably close to a similar amount in Michigan. Monaco and both resorts wound up in bankruptcy. Monaco was sold off to Navistar and both RV resorts were sold at auction for, I believe, about $8 million each. Today both are struggling as class A motorcoach resorts. And you don’t have to look to far around Florida to find other class A only resorts in similar situations. Check out Florida Grande in Webster and Golden Palms in Ft. Myers, for example.

I surely don’t have all the answers to all the questions associated with RV resort development, but I just can’t figure out what these developers in Cape Coral are thinking and how they’ve assessed the need and the market. I wish all involved good luck in this project.

Recreation Trails Winning, Scenic Byways in Trouble

As efforts in Congress to pass a surface transportation bill continues, here’s an update on where a couple of important issues related to outdoor recreation and travel stand:

Recreational trails: The House committee and the Senate committee are in rough agreement on setting aside $85 million per year for the Recreational Trails Program. The office of Sen. Amy Klobuchar (D-Minn.), the lead advocate for the program in the Senate, said the senator “has secured the continuation of the Recreational Trails Program as part of a larger Surface Transportation bill.”

Scenic byways: The House committee bill would eliminate the program. The House committee would also eliminate funding for the America’s Byways Resource Center. That may not matter because the Obama administration is already closing the center down. The Senate bill would allow the scenic byways program to compete for money from either a Transportation Mobility Program or from transportation enhancements.

The park industry has strongly supported the Scenic Byways program and in fact, ARVC was at the table and played a key role in the creation of the program in the late 1980s.

Enhancements: The House committee bill would remove the existing $900 million per year set-aside for transportation enhancements, but would allow the program to compete with other program for money from state highway transportation offices. The Senate bill would maintain guaranteed spending for the program at or about $900 million for fiscal 2013 and 2014.

In the past, transportation enhancement funding provided funds to states and the feds for welcome center enhancements, rest areas, Rails to Trails programs and other ancillary transportation programs.

Military To Get Fed Land Passes

The Obama administration May 19 announced it has established an annual pass for all active duty military personnel to all federal recreation sites. The America the Beautiful National Parks and Federal Recreation Lands Annual Pass will provide free entrance to National Park Service, Fish and Wildlife Service, Bureau of Reclamation, Bureau of Land Management, Forest Service and Army Corps sites that charge entrance or standard amenity fees.

Pool Lifts, ADA and People with Disabilities Around the World

The hospitality industries have been engaged in attempting to introduce some rationality in the ADA requirements for pool lifts in pools that serve the public. It appears that at least as of this writing, the enforcement on the lift requirement has been delayed until at least January 31, 2013 and that the regulations appear likely to be modified to allow both a grandfathering of portable pool lifts purchased prior to the original March 2012 compliance deadline as well as allowing the use of portable lifts under certain circumstances.

While this battle has been front and center in the park industry, there’s another effort to end discrimination and second class treatment of the disabled around the world.

The U.S. International Council on Disabilities has been leading the effort to get the Convention on the Rights of Persons with Disabilities ratified in America.

The treaty upholds the American values of nondiscrimination, as well as equal access for all people with disabilities in every area of life. The Convention for the Rights of Persons with Disabilities will help to protect Americans with Disabilities who travel and work in other nations from discrimination, including disabled American veterans, while assisting to ensure that every American enjoys the same rights outside of America as they do while they are at home.

Ratification of the Convention treaty is supported by more than 150 national and local organizations including Veterans Service Organizations who have joined the disability community in supporting the treaty. These Veterans Service Organizations include the American Legion, Veterans of Foreign Wars, the Wounded Warrior Project, and Disabled American Veterans.

This whole ADA and disability discussion has brought to mind several things that park operators might want to keep in mind in the future.

In 2010, 14,708,000 Americans (or about one in 12, roughly 8%), civilian men and women, aged 21-64 had a disability covered by the Americans with Disabilities Act.

According to the RV Industry Association, about 8% of US households have an RV.

Every new RV park, every new amenity added to an existing park, every amenity or facility rehabilitated or renovated should be done in a way that will enable the park to fully serve the 8% of those with disabilities. The market is about as large as the number of RVs on the road.

Significant tax credits and deductions are available to help businesses of all sizes offset any costs of ADA compliance.

Happy July 4th To All

It’s a small sample, but I’ve talked to about a dozen RV parks since Monday, Memorial Day. Today’s Wednesday, May 30 and everyone I’ve talked to was extremely positive about Memorial Day business. Even parks in Florida! With that in mind, here’s to a successful summer season to all.