Editor’s Note: The following is an article authored by Jeff Crider for Woodall’s Campground Management magazine.
With more than one fourth of his 200 campsites set aside for cabins and park models, one would think the Jellystone Park Camp-Resort in Cave City, Ky., would have enough rental accommodations.
But not if you ask park owner Bill Pott, who hopes to install seven more park model cabins by late June. “Basically, every time we add park model cabins, they fill up,” said Pott, who has owned and operated the park for eight seasons.
Unlike RV and tent sites, park model cabins attract people who typically stay in hotels and wouldn’t otherwise find their way into a campground, Pott said. They also appeal to experienced campers who want a different experience. “Some people are tenters who don’t like the heat or rain,” he said. “Others are looking for a different experience from a hotel.”
Woodall’s Campground Management (WCM) found 10 Jellystone Parks that are adding park models this year, despite the sluggish economy, including Jellystones in Mill Run, Pa.; Canyon Lake, Texas; Eureka, Mo.; Madison, Maine; and Gloucester, Va.
“We started out with six (park models) in 2009. We added six this winter and we’re adding three more (this year),” said Amber Zachary, who manages the Jellystone Park Camp-Resort in Horn Lake, Miss., which serves the Memphis, Tenn., market. The motive, she maintains, is “because occupancy has steadily increased.”
Other park operators are reaching similar conclusions after seeing how park models broaden their business base and bring in new campers. Last year, campgrounds affiliated with Kampgrounds of America (KOA) supplemented their RV and tent sites with 317 luxury park model cabins, which they market as Kamping Lodges. That’s on top of 200 park models that KOA campgrounds purchased in 2009.
So what’s KOA’s conclusion?
More Inventory Needed
“We need more cabins,” said Mike Atkinson, KOA’s director of lodging, adding that at least 75 KOAs have added Lodges to their parks this year alone.
What’s more, KOA’s lodge occupancies are running 20% or more ahead of last year’s figures, Atkinson told WCM. “This means we’re getting new people, people who might not otherwise come to a campground,” he said.
Unaffiliated parks are also getting into the act, including Big Sur Campground and Cabins in Big Sur, Calif., Smuggler’s Den Campground in Southwest Harbor, Maine, Hill Country RV Resort in New Braunfels, Texas, and Red Apple Campground in Kennebunkport, Maine, which is co-owned and operated by David L. Berg, chairman of the National Association of RV Parks and Campgrounds (ARVC).
Kristen Verhlust, who manages Hi Pines Campground in Eagle River, Wis., said her park installed its first park model this spring. “We just put it on our website three weeks ago and we have nine bookings already,” she said.
All of this, of course, is good news for the nation’s park model cabin manufacturers, most of who experienced setbacks during the Great Recession. “The campground industry is our strongest market right now,” said Bill Garpow, executive director of the Recreational Park Trailer Industry Association (RPTIA), the Newnan, Ga.-based trade association that represents park model manufacturers.
The other segment of the park model business is sustained by consumers who purchase the units for use as weekend retreats or vacation cottages and have them set up on campsites that they lease or purchase in campgrounds, RV parks and resorts. But while consumer purchases of park models have been severely constrained by the lack of available financing, some manufacturers are noticing improving sales of these units, which are being fueled by cash transactions.
Business “Has Really Picked Up for Athens Park Homes
“Our business has really picked up,” said Dick Grymonprez, vice president of marketing for Athens Park Homes in Athens, Texas. “The last 30 days it’s gone gangbusters. Most of the business is in our part of the country,” he said, adding that he has seen an increase in the number of consumers writing checks for their units.
Phoenix, Ariz.-based Cavco Industries Inc., for its part, saw no increase in sales of park models to snowbirds last winter as many of the company’s Canadian buyers have been waiting to see if their dollar would post further increases in value against the American dollar. But Cavco Vice President Tim Gage said he’s seen an increase in fall orders from snowbirds as well as an increase in customized units.
Cavco’s production of park model cabins for use as campground rentals has also increased above last year’s figures, he said.
Joe Follman, executive marketing director for Ocala, Fla.-based Chariot Eagle, said his company’s business levels are generally about the same as last year’s figures, but he is seeing a backlog starting to build for the company’s fall snowbird business.
Chariot Eagle is also seeing growing demand from campgrounds up north that are wanting to install park model rental units in the fall, he said.
Even relatively small manufacturers, such as Haleyville, Ala.-based Stone Canyon Lodges, are seeing a pickup in sales activity. “Business has been exceptional this year,” said company owner Larry Smith, adding that he is seeing strong park model demand both from campgrounds and consumers. “People are renting them out more and more for lake houses,” he said.
Andy Davis, senior sales manager for Pinnacle Park Homes in Ochlocknee, Ga., said his company is seeing improving sales conditions as well, although financing remains tight.
“We’re still ahead of where we were,” he said. “Everything is going really well.”
And while more than half of consumers are paying cash for their units, campgrounds are finding financing for single as well as multiple rental units, he said.
While the limited availability of financing continues to constrain the growth of the recreational park model business, several of the industry’s Elkhart County, Ind.-based manufacturers say their year-to-date sales are ahead of last year’s figures and most are confident that the worst of the recession is behind them.
“We’re clearly up off the bottom,” said Tim Howard, president and CEO of the Breckenridge Division of Damon Corp., a Thor company in Nappanee. “Our business is up 15% from last year.”
Curt Yoder, vice president of Kropf Industries Inc. in Goshen, said his company’s business has been good despite tight financing.
“Our business has been quite good. We’ve been going full bore all year,” he said, adding that he is also seeing strong demand from Canada, which is driven in part by the strengthening Canadian dollar. “Our Canadian business has been good, but they’re still fighting some of the same issues we are with the lack of available financing.”
Forest River: Business Is Clearly Better than ‘10
Over at Forest River Inc., Jim Foltz, general manager of the Berkshire Hathaway division’s park trailer division, is seeing strong sales this year. “It’s much better than last year,” he said. “I look for it to stay steady this year.”
Likewise, Dave Burroughs, national sales manager for Woodland Park Inc. in Middlebury, said his business has been “decent” this year. “It has definitely not come back to the levels of 2006, 2007 or 2008, but it’s starting to come around,” he said. “Retail traffic is starting to pick up. We still have a lot of hurdles to jump over before people are going to spend their money as freely as they did in previous years, but I do believe there is some optimism out there.”
Burroughs added that Woodland Park and other Elkhart County manufacturers are getting ready to introduce their 2012 models, many of which will debut at the Pennsylvania RV & Camping Show, Sept. 12-18 in Hershey, Pa., as well as through individual open houses before the units are shown at the National RV Trade Show in Louisville later this year.
Dutch Park Homes in Goshen, Ind,. is already ramping up production of its 2012 models in preparation for upcoming shows. “We’ve increased production twice in the past three weeks and would like to increase it again,” said Sales Manager Larry Weaver, adding that the company plans to introduce three new models and overhaul a fourth.
Other Elkhart County park model manufacturers aren’t convinced the worst of the recession is behind us, particularly with gas prices exceeding $4 a gallon. “If it costs $30 more per week to fill a tank, that’s $120 per month that a customer no longer has in disposable income,” said John Soard, general manager of Fairmont Park Trailers in Nappanee.
Still, Soard expects his company’s sales to be at least on par with last year’s figures.
And Tyler Steele, vice president of Canterbury RV in Goshen, Inc., also expects his 2011 sales to match last year’s figures, even though financing remains tight. “Retail financing continues to be an issue,” he said. “The low end product is selling better than the mid-range, while the high end products are usually cash deals.”