Campground Business Myths

Myth #1: You have to find a campground that is open all year to be able to earn a living.

Fact: Some of the best campgrounds we have sold have been seasonal campgrounds (campgrounds open less than year round).

The majority of the campgrounds and RV parks that are sold around the country are priced by the income they generate. The reason we say the majority of campgrounds sold is because some campground properties are sold for "alternate use" (the property is not being sold to operate as a campground business). If you want to get into the campground business you need to buy that business based on the income it generates. Your down payment ability will determine how much you can spend on a campground business and how much income that campground will generate. In reality if you are buying a campground business, based on its income and the down payment you have available; it doesn't matter how long the campground is open. The income should determine how much the campground sells for. A typical campground or RV Park in North America will generate from 70% to 80% of its income over a 12-week period. Northern tier campgrounds make the majority of their income from June through August.

Southern tier campgrounds will generate most of their income from January through March. The main difference between a Northern tier seasonal campground and a Southern tier campground is, besides the obvious amount of time you are open, the type of camper they cater to.

Northern campgrounds cater to short term campers (campers that stay for less than a week), Southern campgrounds make most of their income off of long term campers (campers that stay for a month or more).

Short-term campers are going to generate a much higher per camper night** income than long-term campers do. They pay a much higher rate for their site ($25-$35 per night) and they buy more from your store. Long term campers generally will pay $250-$450 per month for their site ($8-$15 per night) and they tend to buy little, if anything, from your store. To make a long story short; you can generate as much or more income on a seasonal campground in a much shorter period of time from half the camper nights.

Myth #2: Adding sites will always generate additional income (Does the campground have room to expand?)

One of the first questions a prospective campground buyer asks us is: Does the campground have additional acreage or room to expand?

Fact: Most of the time the answer is yes, there is room to expand, but is there really a need to expand. Sites themselves do not generate income, occupancy generates income. If you look at most campgrounds, the number of sites they have is not the problem. Occupancy percentage is the problem. Camping revenue increases are normally a function of increased occupancy and pricing increases. If you look at the potential camper nights that can be generated by as few as 50 sites it will surprise you. Even a seasonal campground that is open from April 15 to October 15, a period of 183 days, has the potential of generating 9,150 camper nights if it achieves 100% occupancy during the 183 days it is open. At 50% occupancy for the same 183 days it would generate 4,575 camper nights.

Lets assume that you are going to project a 50% occupancy rate, 4,575 camper nights over your 183-day season. Lets also assume that you are going to produce 70% of that occupancy in a 90-day period of time, June through August.

You would have to generate 3,203 camper nights in 90 days to achieve 70% of your total projected camper nights. The 50 sites would have to be occupied 71% of the time over that 90 days to generate 3,203 camper nights. The other 93 days that you are open would only need to generate 1,372 camper nights or 30% occupancy to achieve the 4,575 camper nights you projected. You can see that even with as few as 50 sites you can still generate a respectable number of camper nights.

Concentrate on ways to increase your occupancy before you begin adding sites. You may want to upgrade existing sites to full service sites, add 50 amp sites or you may even want to add some "Super Sites" (highly improved RV sites that provide numerous amenities) or camping cabins if you feel there is enough demand. Even if you go into overflow a few times a year it still may not be cost effective to add more sites.

Myth #3: Monthly and seasonal campers are the easiest and best customers.

Monthly and seasonal campers defined:
* Monthly campers typically fall into a few categories. Many are full time RV'ers, Snowbirds (northern tier RV'ers that travel south to warmer climates during the winter), workers following their specialized jobs (certain types of construction: roads, refineries, gas and oil drilling, etc.), and even a few seeking temporary housing. They may stay on a campground for a month, a few months or even a year. For most monthlies, camping is not as much a recreation as it is a way of life.
* Seasonals are campers that rent a site for an extended period of time (usually from Memorial Day to Labor Day). They use their RV as a weekend retreat and probably take their vacation there.

The myth that monthly and seasonal campers are the easiest and best customers is easily disputed. As stated earlier, most of the monthlies are not camping for recreation. They are looking for monthly rates that are normally very reduced from what the same site would rent for on a short-term overnight basis. They usually do not purchase things from the campground store and sometimes things can get out of hand (number of people living in an RV, accumulated junk, cars, equipment, etc.) unless the campground has very defined rules and regulations for monthlies. A campground's short-term overnight business may even suffer if it is occupied by too many monthlies or seasonals. Seasonals expect to pay even less for their sites than most monthlies are willing to pay. They can become organized and even militant. We have witnessed seasonal campers that organize and threaten to leave the campground if the owner raises rates even though the owner's increase may be justified by higher operating expenses.

Myth #4: Destination campgrounds are the only campgrounds that make money.

Again, we need to define the term destination campground. We feel that there are really two distinct definitions of a destination campground:
* The first definition is a campground that is the ultimate destination for the camper, the reason the camper goes there is because of the amenities, programs and entertainment that the campground provides.
* The second definition is a campground that is located next to a major regional or national tourist destination, the reason the camper is on the campground is because of the campground's proximity to that attraction.

There are major differences in the two different types of destination campgrounds.
* The first destination campground will typically require more amenities, more staff and more reasons for the camper to choose that particular campground. Planned activities, entertainment, and recreational opportunities are the major reasons the campers are on this type of campground.
* The second type of destination campground can typically operate with fewer staff, fewer amenities and fewer planned activities. The reason that campers are on this type of campground is the regional or national attraction.

Now that we have the definitions out of the way we can address the myth. There are many wonderful, profitable campgrounds that fall into one of the two definitions of destination campgrounds. However there are just as many wonderful, profitable campgrounds that are not destination campgrounds. Many of them are campgrounds that are located along high traffic highways that are in route to and from a major regional or national tourist attraction. These campgrounds typically can be operated with minimal outside help, can be profitable with fewer amenities and they cater primarily to overnight, short term campers (campers that make you more money).
Quite often this type of campground can actually give the buyers a better return on their investment because they typically are not priced at a premium. Unfortunately many buyers overlook campgrounds that are not considered destination campgrounds. If a buyer it truly sincere about getting into the campground business they should not overlook any campground opportunity that meets their financial needs ability.

Campground Buying Tips

Food Service

According to a recent National Association of RV Parks and Campgrounds Association (ARVC) survey approximately 36% of the campgrounds in the US provide some form of food service. More importantly 33% of those having food service expected to expand their food service vs. 2% of those surveyed that indicated they were planning to cut back.

Recommendation: If you do not have some type of food service you are missing an opportunity to generate additional income and provide a needed service to your campers. Limited/fixed menu food service is typically the simplest and the most profitable. For example: blueberry pancake breakfasts, and early afternoon hot dog BBQ's both cost pennies to execute and give you the opportunity to increase your income. A few other examples: ice cream socials, BBQ chicken, fresh baked cinnamon rolls, popped popcorn, and lattes or coffee.

Web Site

If you do not have an internet presence you are loosing an important part of your customer base. The most current ARVC survey indicated that the internet is gaining popularity as a preferred way for campers to find, contact and make campground reservations.

Don't Forget: Make sure your website is designed to position you as high as possible in the search engines. If your website does not come up early in a search your website will not perform the function it was intended, which is to ATTRACT NEW BUSINESS.

On your website include links to state associations, chamber of commerce, and local visitor centers. In return, request a reciprocal link - feed each other business.

Exceptional Service

Today customers EXPECT good service. Unfortunately they do not remember it. They remember poor service (they make sure to tell their fellow campers) and they remember exceptional service (they usually tell their fellow campers). According to a recent ARVC survey returning campers and personal referrals were the #1 and #2 ways for a campground to increase their business.

Recommendation: Campground owners need to do something that their campers will perceive as exceptional service. For example, a campground in Louisiana had a golf cart set up with a coffee urn, sugar, sweetener and creamer. He would drive it through the campground each morning while the campers were getting ready to leave. Along with him he had a two-way radio that he used to call the office to find out who was in a particular camp site. Once he was provided with that name he would address that camper by name and ask them if they would care for some coffee.

Camping Cabins

If you do not have camping cabins you are overlooking a segment of the camping market that is growing. Cabin campers can drive fuel efficient vehicles and are less likely to be impacted by higher gasoline prices. Cabin campers are typically good customers for your store.

KOA has expanded the camping cabin market. Some KOA campgrounds have 100 plus cabins on their campgrounds. Montana KOA's one-room Kabin rates range from $30 - $77.

Remember: Curb appeal sells cabin occupancy. Don't expect campers to pay you $30+ a night to stay in a "cabin" that looks like a garden shed.