Private Campgrounds Recession-Proof?
Combine a global economic recession with fears of pandemic disease, and it looks to be another dismal summer season for the travel industry. But for one sliver of the accommodations industry – the small business-dominated private campground business – things are looking up, according to BusinessWeek.
All the gloom and doom about job loss and the economy translates into “one more piece of good news for me,” says Rick Yeager, whose family owns Rose Point Park Campground in New Castle, Pa. He employs up to 10 people seasonally; annual revenues are about $350,000. Bad news is often good news for family campground owners, he says: “People are not going to go on a cruise, and a lot of them will look for a closer vacation that’s more secure. Sad to say, but September 11 was actually a boost for our business because people were afraid to fly or go to Disneyland.”
There are about 8,000 privately owned or operated campgrounds in the U.S. The industry is dominated by small-business and family-business owners, says Bob MacKinnon, a former Disney executive who started a campground consulting firm, MacKinnon Campground Consulting, after he retired. (He says another 8,000 campgrounds in the U.S. are owned and operated by national, state, and local agencies.) “There are mega-parks out there that have thousands of campsites, corporate players that own multiple campgrounds, and KOA, which is a franchisor with close to 500 parks nationwide,” MacKinnon says. “But over 50% of the industry is still individual owners who have small parks. Many are multi-generational family owners.”
Gene Zanger, one of the owners of Casa de Fruta Orchard Resort in Hollister, Calif., has four generations of family involved in running the RV park that started as a cherry stand in the late 1940s with a loan from A.P. Giannini, the founder of Bank of America. Today the operation is a must-see stop off the main inland route from Southern California to San Francisco and includes a restaurant, train, carousel, seven fruit stands, and a tasting room for Zanger Family Vineyards. “This summer we’re real hopeful that people are going to come out. Reservations are above last year for the season and we’ve recently been getting more phone calls,” Zanger says.
A big part of the reason, of course, is that the cost of a local camping vacation is far less than a trip that includes airplane tickets and hotel accommodations. A study by PKF Consulting and sponsored by the Recreation Vehicle Industry Assn. found that the average camping vacation would run 21% to 67% cheaper than a fly-drive-hotel vacation. “Historically, when there’s been downturns in the economy, our segment of the industry has done pretty well. We will remain fairly stable because we’re so value-oriented, even in times of recession,” says Mark Anderson, president of Camp Chautauqua in Stow, N.Y., and chairman of the National Association of RV Parks and Campgrounds (ARVC).
Even though gas prices and the credit crunch have pushed down sales of campers and trailers over the past two years, people who already own RVs continue to get as much use out of them as possible. Far-flung campgrounds suffered last summer because of record-high gas prices in most of the country, Anderson says, but most people camp within 200 miles of home, and the industry as a whole was not hurt too badly.
Campground owners spend much of the off-season upgrading and adding to their properties. Anderson says his family spent this spring supervising the installation of new road paving, higher-grade electrical outlets (even tent campers require electricity these days, he says) and remodeled restrooms. “We just switched a lot of our heating over to natural gas from propane and oil,” he adds.
Like many of the most successful campground owners, the Zanger family will incorporate more social activities this summer for their guests. Campers love old-fashioned options like hay rides, ice cream socials, nature hikes, and crafts classes, he says. In recent years many campground owners have also added more up-to-date amenities such as outdoor movies, cable television, yurts, cabins, and Wi-Fi.
But it may be the nostalgia factor that is the campgrounds’ main draw. “People come for the experience, not because they want to stay somewhere cheap. They want to make a campfire and be in a place where kids can run free and they don’t have to watch them every minute,” Yeager says. That feeling of safety within the boundaries of the private campground, where some families return year after year, may be especially attractive in a society where stress and fear often dominate.
“This reminds me of the north side of Pittsburgh in the ’30s and ’40s,” Yeager says one customer told him last summer. “It’s a throwback to where people grew up, when they knew their neighbors and everybody talked to everybody else.”