Before joining Thor Industries Inc. as its director of campground relations last year, Shane Ott spent 23 years with Billings, Mont.-based Kampgrounds of America Inc. (KOA), working his way up to president and COO of the company.
But during an address to private park operators attending the ReV up in Reno convention and tradeshow in Sparks, Nev. last month, Ott said the multi-week, long-haul family vacations that many of us grew up with are a thing of the past.
And while recent increases in fuel costs certainly encourage families to camp closer to home, that’s not the only factor.
Most families, he said, no longer can afford time off work to take extended vacations of two weeks or more, as they had in years past. In most cases, both parents are working, and many find it difficult to leave work for more than a few days at a time. Their kids may also have sports practices and other extracurricular activities, which further complicate efforts to escape for a lengthy trip.
As a result, he said, people are taking shorter trips, and they’re camping closer to home. And while there will certainly always be some people who have the ability to take long-haul, multi-week RV and camping trips, Ott said the phenomenon of families taking shorter trips closer to home is “a macro trend that is here to stay.”
But while this may seem like an ominous development for private park operators, campground operators have found that they can broaden their guest base by investing in park model rental accommodations, which are perfect not only for people who don’t have a tent or RV, but for time-deprived families who want to have a quick and easy weekend getaway without having to worry about packing tents and sleeping bags, let alone setting up and taking down camp.
Rental accommodations are lucrative, often generating three times as much as a typical RV site. Park models are more lucrative than RV sites not only because they generate more income per night, but because they tend to be booked more often and have higher average occupancy rates than RV sites.
“To some extent,” Ott said, “campgrounds have insulated themselves from dependence on RVs by investing in park models.”
This is one reason why several Thor subsidiaries have partnered with the National Association of RV Parks and Campgrounds (ARVC) to provide campground operators with special pricing on rental accommodations, including park models manufactured by Breckenridge Division of Damon Corp. and CrossRoads RV as well as travel trailers manufactured by Airstream Inc. and Keystone RV Co.
During an interview with Woodall’s Campground Management, Ott said the park operators were directly involved in helping the Thor companies develop their respective rental products. CrossRoads RV, the latest to join the ARVC-Thor promotion, has several features, including:
- 5/8-inch pine plank tongue and groove interior paneling instead of ¼ inch paneling or gypsum board.
- No carpeting. Instead, the floors are covered with Beau Floor linoleum, which is easy to clean and more resistant to furniture scratching and cracking due to cold weather than other floor coverings.
- No curtains because the materials used in draperies can tear and hold odors. Instead, CrossRoads uses miniblinds, which can be easily cleaned and replaced as needed.
- Residential-style refrigerators. Guests prefer them over compact RV refrigerators because they hold more and work better. They can also be easily replaced as needed.
- Custom designed deck plans. CrossRoads has provided Lowe’s with architectural drawings for patio decks that it designed specifically for its rental units. So whenever park operators want to install a patio, they can simply contact Lowe’s, which will provide them with the deck plans as well as the lumber and other supplies they need.
Esther Osborne of Marble Quarry RV Park in Columbia, Calif., in California’s famed gold rush country, told WCM she has seen evidence of the trends Ott described at her park, which her father has owned and operated for 32 years. She said the park has invested in cabins in recent years to broaden its market base and the results have been significant. “It used to be more clubs and older people that came in here,” she said. “But now (with the rental accommodations), we’re getting a huge mix with a lot of families with children.”
In fact, Osborne was so impressed with the CrossRoads RV unit on display at the Cal-ARVC convention that she bought the unit, and hoped to have it ready for occupancy before Memorial Day weekend.
The convention was sponsored by the California Association of RV Parks and Campgrounds (CalARVC) and the associations of several neighboring states.
The campground business has been the most resilient sector of the travel and tourism business throughout the recession. But it’s not just because campgrounds offer the most affordable vacation option, according to The Daily Exchange, Waterloo, Ontario.
“Campgrounds increasingly offer rental accommodations, so they’re no longer solely dependent on tent campers and RV owners,” said Linda Profaizer, president and CEO of the National Association of RV Parks and Campgrounds (ARVC), adding that roughly a third of America’s campgrounds now offer park model rental accommodations.
But most campgrounds aren’t building their own rental accommodations from scratch. In most cases, they are ordering factory-built cabins and cottages, which are being delivered to their parks just in time for the camping season.
Many of them look like miniature log or cedar-sided cabins. But these 400-square-foot units are actually recreational park trailers or “park models,” and are technically classified as recreational vehicles.
“They’re completely turnkey,” said William Garpow, executive director of the Recreational Park Trailer Industry Association (RPTIA), which represents park model manufacturers. “All the campground owner has to do is hook each unit up to the utilities and they’re ready to rent.”
And, perhaps best of all, since “park models” are technically classified as recreational vehicles, they do not require building permits in most jurisdictions, so campgrounds can literally order them over the phone and have them delivered to their parks within a matter of weeks.
“Manufacturers construct these units in factories to conform with approximately 500 safety requirements contained in the National Safety Standard for recreational park trailers,” Garpow said.
Industry insiders see the campground industry’s increasing investments in park models and other rental accommodations as a shrewd business move, particularly given rising fuel costs and the dramatic decline in towable and motorized RV sales in recent years as a result of the recession.
“To a certain extent, the campground industry has insulated itself from the economic downturn by installing rental units,” Profaizer said.
Indeed, by providing rental accommodations, campgrounds are drawing not only tenters and RVers, but anyone who would normally stay in a hotel or motel while they travel.
“With park model cabin rentals, we can appeal to families who don’t have to worry about going out and purchasing an RV or having a tow vehicle or whatever the case may be. They can just get in their car and come to one of our parks,” said Rob Schutter, COO of Milford, Ohio-based Leisure Systems Inc., which franchises Jellystone Park Camp-Resorts.
Campgrounds have been gradually investing in park model cabins and other rental accommodations for many years. But the focus on rentals has intensified in recent years.
In fact, the competition for campground business has become so fierce that park model manufacturers are facing increasing competition from RV manufacturers, who are now marketing some of their own products as rental accommodations for campgrounds.
For more than 13 years, in fact, the Breckenridge Division of Damon Corp. in Nappanee, Ind., was the only Thor Industries Inc. subsidiary that produced rental accommodations for campgrounds. Now there are four Thor subsidiaries vying for a piece of the campground rental business, with Topeka, Ind.-based CrossRoads RV, Goshen, Ind.-based Keystone RV Co. and Jackson Center, Ohio-based Airstream Inc. each competing for a piece of the campground accommodations business along with Breckenridge.
Some of the major campground chains, for their part, are busy working out exclusive arrangements with leading park model manufacturers, which are building custom-designed rental units for their parks.
Phoenix, Ariz.-based Cavco Industries Inc., for example, is building units for Kampgrounds of America Inc. (KOA), while CrossRoads RV recently landed an agreement to build custom designed park models for Yogi Bear’s Jellystone Park Camp-Resorts. Another RV resort developer, Memphis, Tenn.-based RVC Outdoor Destinations, is working with Athens Park Homes in Athens, Texas, to furnish its resorts with park models.
But while some see the growing demand for rental units in campgrounds as a result of rising fuel costs and declining RV sales, it also reflects significant sociological changes taking place across the United States, Profaizer said.
“Families are increasingly time deprived and the dynamics of the summer vacation have changed,” she said. “People are camping closer to home because they don’t have as much time off to take extended trips across the country. Oftentimes, both parents are working and their kids are often involved in extracurricular activities, which limit their ability to travel.”
In addition, she said, many families are finding that it’s easier and more convenient to rent a cabin for a weekend getaway than to spend their limited free time packing, setting up and taking down tent camping equipment. For others, she said, having a cabin rental gives them an opportunity to experience camping in the great outdoors even if they don’t have an RV.
Schutter of Leisure Systems said campgrounds are also finding that park model rentals are particularly appealing to women, especially mothers. “In our particular system,” he said, “one of the major decision makers is Mom. And Mom finds all the comforts of home in these units. That’s a big selling point.”
Thomas Heneghan, CEO of Equity LifeStyle Properties Inc., also said park model accommodations have wide market appeal. “In today’s economy,” he said, “the park model extends the outstanding value and experience of the outdoor lifestyle to families who are either unfamiliar with tent camping or RVing or who prefer the conveniences offered by staying in a park model.” He added that park models “allow one to have all of the comforts and conveniences of home with the ability to have a change of scenery and reconnect with family.”
Park model manufacturers, for their part, find it behooves them to pay attention to campgrounds and their growing accommodations needs.
“Many of our manufacturers are literally racing to get these units in place in time for the summer camping season,” said Garpow of RPTIA, adding that the pre-summer rush can be a nail-biter for campgrounds, many of which have already booked the park models they have ordered for this summer.
Such is the case at West Glacier KOA in Glacier, Mont., which just received six park model cabins in late April. “We’re hooking them up to septic and electric utilities right now,” said park co-owner Theresa McClure, adding that five of the six units are already booked May 14, when the park opens for the summer camping season.
“It’s just crazy,” McClure said of consumer demand for park model cabins, which KOA markets as Kamping Lodges. “We could probably put in 12 and they’d all be booked.”
After enduring the biggest downturn in the history of the recreational park trailer business, several recreational park trailer manufacturers are reporting increased sales and renewed interest in their products, which are used by consumers as vacation cottages and by campgrounds as rental accommodations, according to a Recreational Park Trailer Industry Assocation (RPTIA) news release.
“It looks like spring is definitely going to be better than it was last year,” said Tim Howard, president and CEO of the Breckenridge Division of Damon Motor Coach, a Thor Industries Inc. company in Nappanee, Ind., that has long been one of the largest park model manufacturers in the country.
“In the past two months, we have seen a better market, a better demand for products, broadly, than we saw during the same period last year. This is an encouragement, certainly, because it was a long, painful ‘off’ season.”
Granted, Howard said his company’s backlog is still “not anywhere near what it would have been in normal times three years ago,” but it’s moving in the right direction.
“Several park trailer manufacturers are saying their orders are up at least 10% to 15% from where they were a year ago,” said RPTIA Executive Director William Garpow, whose association represents park trailer manufacturers. “Of course, park trailer shipments were down about 50% last year, so we’ve still got a long ways to go to get back where we were three years ago, but at least we’re heading in the right direction.”
Indeed, several Elkhart County, Ind., park trailer manufacturers say they are seeing a sustained increase in orders and inquiries this year, which they say bodes well for the future.
“Business is a little better than last year,” said Dave Burrows, national sales manager for Middlebury, Ind.-based Woodland Park. “It’s definitely not the 2006, 2007 or 2008 numbers. But consumer optimism and demand here over the last two months has started to increase, which is nice to see. Prior to that, dealers were extremely nervous and skittish about putting any product on their lots. Now they’re starting to see traffic coming in. My dealers are more optimistic this year than they were last year.”
“Sales are up nicely,” said Jim Foltz, general manager of Forest River Inc. in Elkhart.
Other companies say they are seeing even stronger business levels.
“So far this year, our business seems to be back to normal for us,” said Curt Yoder, vice president of Kropf Industries Inc. in Goshen, Ind. “There’s definitely much better activity and interest this year compared to last year. We’re running at full capacity now and we hope to continue that.”
Olin Wenrick, president and CEO of Elkhart-based Trophy Homes Inc. said his business is up, too, this year, but is still off about 50% from where it used to be. But Wenrick said he is optimistic about his business prospects this year. “We’re beginning the climb,” he said.
Other park trailer manufacturers across the country are similarly optimistic.
“Our park trailer business year-to-date is up over last year for January, February and March,” said Dick Grymonprez, vice president of marketing for Athens Park Homes in Athens, Texas. “We’re encouraged that it’s going to be a better year.”
Grymonprez added that the biggest impediment to improving park trailer sales is the same impediment facing every other industry in the country: limited bank financing.