Leveraging its newly formed partnership with Heartland Recreational Vehicles LLC, Breckenridge will be introducing the all-new LakeView destination trailer during this week’s Elkhart County RV Open House.
According to a press release, the LakeView caters to a growing market of consumers looking for a destination trailer that can be pulled to a seasonal site or lakefront property. The line will be produced from a dedicated facility in Indiana’s Elkhart County that allows Breckenridge to build units year-round.
“We are very excited about this new product,” said Bob Phillips, Breckenridge general manager. “Breckenridge has always placed a major emphasis on the park model sector, but the market is changing. We want to be one of the first RV manufacturers that is truly committed to the destination trailer business.”
The LakeView features a comfortable, residential-style interior highlighted by panoramic windows to maximize scenic settings. Phillips noted that in addition to several “set-apart” amenities, the LakeView would be sharply priced compared to the competition.
“Unlike other manufacturers, we will not operate in the travel trailer and fifth-wheel markets so we can focus on our two core segments – park models and destination trailers,” he said. “I believe our dealers will find that very refreshing. By providing them with a very fair territory and year-round delivery of product, I am confident dealers will see this type of partnership as an opportunity to grow their business.”
Breckenridge, founded in 1991, has strong brand recognition with consumers as a forerunner in the park model and destination trailer industries.
“Breckenridge has an unbelievable name in Elkhart County,” said Chris Hermon, president of Breckenridge. “And in talking with dealers, I realized what a great reputation the company has across the country.”
He added, “It’s all about people and Breckenridge has put together a tremendous team. I expect Breckenridge and its LakeView product to hit the ground running.”
Breckenridge will be displaying at the Open House as part of Thor Industries Inc.’s expansive display at the RV/MH Hall of Fame.
Heartland Recreational Vehicles LLC and Breckenridge today (July 24) announced the formation of a reciprocal partnership between the companies designed to maximize sales and increase market share in the growing park model and destination trailer segments.
The collaboration, set to go into effect Aug. 1, will merge Breckenridge’s reputation as a respected, quality-oriented manufacturer with Heartland’s oversight and management expertise. According to a press release, the firms will continue to operate as stand-alone divisions of Thor Industries Inc.
As part of the move, Heartland President Chris Hermon will also serve as president of Nappanee, Ind.-based Breckenridge. Hermon reported that the companies would build product year-round from dedicated manufacturing and service facilities “that would cater to the destination trailer segment.”
“Dealers will be able to order product any time during the year,” he said, noting that Heartland currently sells two destination trailer brands. “That will set us apart from other manufacturers that only build a few times a year. Dealers will be energized to work with companies committed to this product segment.”
Hermon emphasized that the partnership would be a “very symbiotic” arrangement.
“We have a lot to offer Breckenridge in terms of leadership, support and direction while Breckenridge has a lot to offer in product, manufacturing and a deep loyal customer base,” he said. “By combining forces, Breckenridge will become even stronger and continue to be a leader in the park model and destination trailer markets while Heartland will be able to grow its destination trailer business.”
Breckenridge was founded in 1991 by Tim Howard, who retired in February of 2012. The company has been a forerunner in the industry and currently offers a full complement of products to meet emerging demands.
“Breckenridge has very strong brand recognition with consumers,” said Hermon, who joined Heartland in May of 2012. “Our focus will be to apply our proven business model to build business for Breckenridge and Heartland. We are putting plans and resources in place to double sales and market share in the segment in the upcoming quarters and become the No. 1 producer in Elkhart County of park models and destination trailers.”
Hermon added that Heartland, which is enjoying a record-setting year, has a successful track record for bringing product to market and quickly growing market share.
“Our top priority is giving retail buyers the products they want and giving dealers the credible front- and back-end support they need,” said Hermon. “Our marketing and operational experience will be a perfect fit for Breckenridge.”
Hermon reported that plans are to roll out new products and programs as part of the Elkhart County RV Open House, set to run in mid-September.
Tim Howard, founder and president of Thor Industries Inc.’s Breckenridge Division, a recreational park trailer builder in Nappanee, Ind., will retire Feb. 1.
Howard announced his retirement Wednesday (Jan. 5) in an e-mail to about 150 friends and business associates.
”I’ve been in the industry since 1977 in one way or the other,” Howard told RVBUSINESS.com. ”It’s wonderful to be able to go do things that I want to do. The industry has given me a wonderful 35 years and the opportunity to pursue other interests as I retire.”
Breckenridge National Sales Manager Denise Walsh will become general manager and Vice President Junior Doty will become vice president of operations.
”Both have years of experience at Breckenridge and they are the best in the business,” Howard said.
Howard, 57, founded Breckenridge in 1991 as a stand-alone division of Damon Corp. after a 10-year stint with Mallard Coach Corp. and shorter periods of employment with Coachmen Industries Inc. and Georgie Boy Manufacturing Inc.
At the time, Damon was owned by Don Pletcher, a well-known industry executive.
”The idea was to create an autonomous company within a company,” Howard said. ”They had their resources in place, which made the fundamentals of starting a new enterprise very smooth. They already had a design department, an accounting department and other things that helped us as a startup.”
Breckenridge, currently with about 100 employees, down from a high of around 200, operated as a Damon division until after Damon was acquired by Thor in 2003 and functioned as a unit of Thor Motor Coach until a couple of years ago when it became part of Thor’s Dutchmen Manufacturing Inc.
Howard, who sold his ownership stake in Breckenridge in 2003 when Thor purchased Damon, said he has no immediate plans in retirement other than to spend time with his wife, Judi, in their permanent home in Goshen, Ind., and summer home in St. Joseph, Mich.
”I have been involved in the community and local church and I want to pick and choose what I do,” Howard said.
He hasn’t ruled out a return to the RV industry. ”It could be fun helping some friends in the industry if they needed help,” he said. ”I would be interested if it would be fun.”
Acknowledging that the park trailer sector currently ”is not thriving,” Howard said that he delayed retirement longer than he might have because he didn’t want to leave Breckenridge in the lurch in the aftermath of the Great Recession.
”I’ve planned for a long time for this stage of my life,” he said. ”I didn’t want to retire when the industry was facing a full-blown hurricane. I chose this time to retire because the trajectory of the park model industry right now is very, very good. Everything is going in the right direction.”
Repeat top-selling brands included the Keystone Montana fifth-wheel, Jayco’s Jay Flight travel trailer, Tiffin’s Phaeton diesel-powered Class A motorhome, Forest River’s Georgetown gas Class A and Winnebago View’s diesel minimotorhome. The only two first-time leaders were the Coachmen gas Class C motorhome and the Forest River Rockwood folding camping trailer.
The Montana led the pack for the 10th consecutive year with 9.4% of retail fifth-wheel sales while Jayco Inc.’s Jay Flight snagged 6.4% of the travel trailer market, according to Statistical Surveys Inc., the Grand Rapids, Mich., company that tracks RV industry retail sales.
In the motorized market, Tiffin Motor Home Inc.’s Phaeton was the best-selling diesel motorhome with 13.2% share, Forest River Inc.’s Georgetown was the top-selling gas Class A, with 13.9% share, and Winnebago Industries Inc.’s View was the No. 1 Class C diesel on the market with 21.9% share.
Other 2010 market share leaders were Class B, Winnebago’s ERA (16.6%; Class C gas, Forest River Inc.’s Coachmen (17.6%); folding camping trailers, Forest River’s Rockwood (7.3%); and park models, Breckenridge (17.6%).
Keystone President Bob Martin said the Montana has staying power for several reasons with customer loyalty being high on the list.
”Loyalty is important,” said Martin, whose Goshen, Ind., company hosts about 100 Montana owners at a rally each fall at the nearby Elkhart County 4-H Fairgrounds. Many of them have bought five or six Montanas over the years.
”Members of the Montana Owners Club are incredibly loyal,” he added. ”After they buy a Montana, they just won’t buy anything else. Montana is user friendly and loaded with features with quality that no one else can match.”
Jerry Williamson, Tiffin national sales manager, said that while the Paeton was developed as an entry-level motorhome, over the years it has evolved into a mid-priced coach in the ”sweet spot” of the diesel market.
”We improved the product as far as amenities and styling every year,” said Williamson, who noted that most RVs creep up in price as consumers ask for more features and amenities. ”We ‘mother-hen’ the Phaeton very closely. We have the best feature package that is offered in the mid-range price point.”
Roger Martin, Winnebago Industries Inc. vice president of sales and marketing, said we worked closely with Daimler AG, Mercedes Benz’ parent company, and invested the time and money to develop the Winnebago View along with sister-brand Itasca Navion on the high mileage Sprinter cab chassis, previously offered only in a B-van configuration. These efforts provided Winnebago Industries with a head start in developing these products over other manufacturers.
”That’s the primary reason that the product has been so successful,” Martin said. ” It was unique in the industry for two or three years before folks starting copying the idea.
”The View essentially created the segment of the fuel-efficient, stylish units based on the Sprinter,” noted Martin. ” I also credit the dealer organization we have. They really grasped this concept and did an excellent job selling it.”
Sid Johnson, Jayco Inc. marketing director, noted that the Jay Flight has changed during the six years it has led the travel trailer market.
”Initially, Jay Flight was positioned as a lower-end entry-level product that offered a great deal of value for the price,” Johnson said. ”It’s still somewhat that today, except that it has been steadily improved over the years from the standpoint of features.”
That, he said, appeals to younger buyers with families who have come to expect more than their Baby Boomer parents. ”It’s a heavy number from first-time buyers with a heavier than normal incidence of college education,” Johnson said. ”I’m not sure what all that says, except in terms of Jayco’s strategy, that product has become not only our bread-and-butter, but provides the foundation of our entire travel trailer strategy.”
Despite the nation’s challenging economic environment, business for most of Kampground of America Inc.’s 460-plus parks is relatively good right now. In fact, it’s real good in some cases. That much was evident at KOA’s Annual International Convention at which some 500 people – representing 220 parks – gathered Nov. 7-10 at the Westin Savannah Harbor Golf Resort & Spa in Savannah, Ga.
How so many entrepreneurial franchisees like Steve Jewell, of Spartanburg NE/Gaffney, S.C. KOA, managed to so gracefully avoid the more dire effects of the Great Recession is hard to figure.
So far, however, that appears to be the case.
“Our business has been strong this year and last year right through the rather low period that other people experienced,” said Jewell, a convention attendee who does “huge” repeat business. “We’ve experienced continual growth over 29 of the last 30 months with increases over 10% — and as much as 18% to 19% — from the previous year.”
By the same token, Al Johnson’s 10 KOAs are all posting revenue gains. “We had a banner year for our company, which was chasing a really good year last year,” says Johnson, whose South Dakota-based Recreational Adventures Co. has benefited from both good weather and economy-seeking campers.
Neither Jewell nor Johnson was doing paid testimonials for KOA, but they well could have because their remarks are consistent with the company’s own impressive report: KOA’s core business saw strong growth during the company’s summer camping season, with same store revenue up 6% and camper nights up 4.5% over 2009, according to an “annual report” distributed by the company at its upbeat convention.
KOA President Pat Hittmeier says the company experienced year-over-year gains in each of the first 10 months of 2010, while destination locations near major attractions and “along-the-way parks” that feed those major markets did particularly well.
KOA’s total revenues are up about 8 1/2 percent in this, the second consecutive year of strong gains compared to the “poor” results posted in the recessionary summer of 2008. “We are still just a fraction below where we were in 2007,” Hittmeier told RVBusiness. “So we are very close to that benchmark, which was an excellent year.”
In fact, Hittmeier says KOA had surpassed 2009’s total year-end camper nights by early November.
“As consumer confidence and the jobs market come back, we are looking for a record-breaking year in 2011 for the summer,” adds Hittmeier. “The part that is a little disconcerting is the winter business, that which takes place between Nov. 1 and April 30. It has been down multiple years in a row. There are two parts of that — the short-term traveler and the extended stay snowbird.
“The snowbird business has stayed pretty stable — down a little bit, up a little bit,” he continued. “But the traveling market in the wintertime period has taken a big hit. That group has gone down repeatedly since the 2006-07 winter. Last year, we thought it would stabilize. It didn’t. It’s about 25% of what it was in 2007. We are hoping this year that it will turn around and that that particular retiree market will come back.”
KOA, in turn, expects to finish 2010 with a total count of about 470 parks, 26 of them company owned, the rest operated by independent franchisees. Hittmeier says KOA usually adds through conversions of new parks as many as 20 to 25 parks a year and loses through attrition anywhere between five and 15 parks in a average year.
Cultivating a Lucrative New “Lodging” Business
Looking ahead, the so-called “lodging” market remains a big target of KOA’s as the company continues to spearhead a trend toward rustic looking, wood-clad cottages built by three preferred providers: Cavco Park Homes & Cabins, Goodyear, Ariz.; Thor’s Breckenridge division, Nappanee, Ind.; and General Coach of Hensall, Ontario, Canada, all three of which had units on hand at the Georgia convention.
In fact, Hittmeier says there’s now a total of about 5,000 “roofed accommodations” in the KOA system – the goal being to add another 1,700 by 2015.
“We added about 400 roofed accommodations last year — most of those being park model types with full-service kitchens and bathrooms,” said Hittmeier. “Our lodge nights were up 35% in October, so we are starting to see some shoulder season business from these lodges, which is something we didn’t experience from our camping cabins (small dwellings lacking kitchen and bathroom facilities).”
These fully equipped recreational park trailers are called “Kamping Lodges.”
The next phase in KOA’s ongoing push into the lodging arena – a rather bold step that represents a definite departure – is a move toward the traditional hotel/motel field. As a matter of fact, the company-owned properties department has developed an operational manual specifically for lodging. “We are going to go more deeply into the linen market and hit the hotel/motel market head on,” says Hittmeier. “It’s a big jump because there’s a lot of work behind it relative to commercial laundries and taking on some systems.
“Anytime we have more than 10 lodges on a property, we are going to go to that model.”
The biggest challenge related to all that, he agrees, is to get the word out to the North American public that all of these lodges exist and that a young traveling family – or a family visiting an area for a soccer tournament — can opt to stay in a pretty little pine-sided cottage at the KOA instead of the Marriott Courtyard.
“The people who are staying in our lodges rate the experiences at the highest level,” said Hittmeier, now in his second year as KOA’s president. “They rate us higher than people who stay in RV sites, and of course, they pay the most amount of money. We know we’ve got a good product. The people who stay in them are first-time visitors to KOA as well, so they are not RVers. It is a new market, a primarily family market.
“When we get critical mass of enough units out there, I think we’ll start to see an even stronger draw and awareness,” said Hittmeier, adding that about 200 KOAs currently operate lodging accommodations.
“The hotel industry is coming toward us,” adds KOA CEO Jim Rogers. “They’re not changing your sheets anymore. They’re trying to put in a breakfast in the morning, trying to get you to socialize, but you still worry about going next door, knocking on the door and getting shot. That’s not what’s going to happen in this (campground) environment. These little buildings give you a sense of ownership — it’s a cottage, it’s a chalet, it’s a cabin, it’s yours, it’s reasonably priced. And you get something that you won’t get from a hotel.
“Now you’re (the park operator) in hospitality. We are moving toward them and they’re moving towards us. But we win because we’ve got 22 acres to go play on.
The problem is that nobody knows we’ve got them. We put it in our directory last year, but that was talking to our own campers. The people who are noticing our lodges are paying the most and have the highest satisfaction, return and value.
“And they are demographically diverse. We are seeing the African-American, Asians and Latinos use these products and loving them. That takes you beyond even the hotel component. It reaches you into a whole new strata of incremental business.”
Unprecedented Focus on The Company’s KOA.com
Another significant focal point for KOA right now is its revamped www.koacom website. This is no ordinary website, not for the $900,000 that the company recently invested in it — in addition to the $1 million KOA typically injects into its web operations on an annual basis.
One of the revamped website’s new features is geo-coding, which allows the site to know where an online user is located, and display campgrounds and special offers in that area.
“The old version of koa.com was already the most visited camping website in the world, with more than 1.1 million visitors each month,” said Lorne Armer, vice president of marketing for KOA. “But it was time for an upgrade, and the new koa.com offers our guests an enhanced online experience as they plan their camping trips, discover what there is to do near our campgrounds and make their reservations.”
The new site allows park operators to manage their own content and also features Google Mapping, a familiar online technology that allows users to quickly navigate state and provincial maps, zeroing in on just the right locations.
“The new KOA.com, which was produced by our partners at Genex in Los Angeles, will allow campers to spend time discovering some of the wonderful locations we have at KOA, so they do all of their trip research efficiently in one easy-to-navigate location,” said Armer. “They will have real-time access to more than 60,000 of North America’s best recreational vehicle sites, tent sites and accommodations such as our new Kamping Lodges.”
Hittmeier says KOA had planned to launch the revamped website in May, realizing its growth potential, especially among first timers. But building 10,000 pages and integrating the company’s Kampsite reservations operating system was quite a test.
“It was a little more complicated than we thought,” explained Hittmeier. “Instead of a nine-month period, it turned into more like a year-and-a -half launch period. And once we got into the middle of summer, we thought there was no way we could launch this when we are doing about $40 million in reservations through koa.com. Our campground owners would kill us if we launched a brand new website in the middle of their season. So, we waited until just a couple of weeks ago to launch it.”
Keynote Speaker Preaches The Power of Instant Feedback
Keynote speaker Fred Reichheld, a customer service guru who authored the groundbreaking book “The Ultimate Question – Driving Good Profits and True Growth,” told the assembled attendees that he had studied several companies that had experienced exceptional growth like Chick-Fil-A, Southwest Airlines and Enterprise Rent-a-Car.
What he found was a singular dedication to treating customers well and an ability to quickly measure their success and “make good things happen with what they learned.”
And that’s the kind of responsive approach KOA is trying to emulate.
Reichheld’s measurement tool, the Net Promoter Score, simply asks customers to rate their stay immediately after departure, and guests are asked if they’d likely recommend the business to a friend. The low scores, or “detractors” are subtracted from the top scores, or “promoters” to arrive at a “net promoter score.”
Reichheld’s new scoring system, providing KOA owners with immediate customer feedback on a daily basis — allowing them to quickly check progress and correct service problems as they occur — was adopted by the KOA system this summer as a means of helping operators improve service to campers.
He said sharing immediate customer feedback with employees is a great way to insure everyone – the owner, customer and employee – can win.
As part of its new “Rate Your Stay” feedback loop, KOA guests get an automatic e-mail from KOA thanking them for their business and asking them to rate their experience and add verbatim responses if they so choose. Consequently, KOA owners received over 120,000 immediate, catalogued responses from guests so far, allowing them to take quick action on operational issues.
“This response in addition to the verbatim feedback, comes back to our KOA owners immediately,” says Hittmeier. “Each morning they can open up their responses and we provide an organized list of where their score are at, verbatim, ranking them by site types, and so forth. So, they can manage their business on a daily basis. They use this to reinforce good service practices with their staff. It’s a real good tool that will help us move those service scores up.”
“We’ve continued to refine and focus our quality process where now, we wake up in the morning and see what our customers said about us yesterday and we respond to it,” Rogers explained. “We are able to make a phone call if they are disappointed. We are dealing with one guest at a time to make sure their stay at KOA was satisfactory to them.
Rogers Addresses Financially Strapped Public Park Sector
In what amounts to a real turnaround for the RV park and campground arena, Rogers is appealing to the private park sector to take heed of the sorry current state of public parks faced with critical budget cuts.
“The public sector is in a world of hurt,” he maintained. “I don’t care if you are at the federal or state level. They represent 8,000 campgrounds. We have 8,000 commercial campgrounds. They have 8,000 very distinguished specific locations that Americans enjoy, as do our visitors. So, you have to begin to ask the question: Are there any things that we’re doing on the commercial side that can be of assistance to the private side. That’s where the doorbell is being rung.”
Although KOA isn’t interested in any concessionaire relationships, he adds, they’d like to figure how KOA franchisees near public facilities can be of assistance or can “create an opportunity to take park rangers and teach them the free enterprise system.
“They are at a clear dead end,” said Rogers. “What we are hearing from the Forest Service is that they can’t find anybody (entry-level personnel) in the channel. They are retiring all these people and there’s nobody to replace them.”
So maybe, he argues, the private sector can help.
“We’re here in the state of Georgia,” added Rogers. “Their park budget was cut 30% and they lost a referendum in California for an $18 million license fee that would have collected $500 million. They are threatening to close 126 parks. If this feeder system gets sicker and then closes, the commercial campground business is in trouble.
“So much of what you get is that entry point (for first-time campers) in the state parks. You’re going to lose that beginning point. If you take all the KOA campers and aggregate their camper nights, 20% of those are spent in public facilities. They’re on their way to a location. They stay with us on the way, but they are going to Yellowstone. If a state park is closed or doesn’t provide the service they want, we’re going to lose the traffic in between.”
While the private park sector is opposed to using public funds to build new parks to compete with them, Rogers observed, everyone needs to be careful not to forfeit in the current budget crises tens of thousands of camper nights. “We need to be more robust by putting our heads together to see if there’s a new paradigm that we can operate under,” he noted. “If we do, I think we’re going to find those state and national parks are going to upgrade their services and increase their rates and better service the camping public. We’ll all benefit from that.”
KOA Honors Franchisees At Savannah Convention
KOA honored a number of franchisees with awards. The top honorees were Michael and Kristi Kuper, owners of the KOA in Thunder Bay, Ontario, recipients of the Franchisee of the Year Award for 2011.
The Kupers, who first met as teenagers and worked together on the campground with Kristi’s parents, won the award during the convention’s first day.
The Kupers purchased Thunder Bay KOA in 1998 from Kristi’s parents, and have worked tirelessly for the past 12 years to added new features and improvements for their camping guests. Their efforts have led to a KOA President’s Awards every year, as well as three KOA Founder’s Awards.
The award was presented by Hittmeier and Rogers as well as last year’s winners, Sam and Renee Scialdo Shevat from the Herkimer Diamond, N.Y., KOA.
Along with a large bronze statue by Billings artist Mike Capser titled “Always Welcome,” the Kupers will be the one-year guardians of the “Dave’s Hammer” traveling trophy. The trophy includes a well-used hammer once owned by Kampgrounds of America founder Dave Drum, who founded KOA in 1962.
Other award recipients were:
- David and Helena Johnson were honored as KOA Rising Stars for 2011. The Johnsons are the owners of the Willits, Calif., KOA. The award goes to a KOA franchisee who has been part of the KOA system for five years or less who demonstrates extraordinary dedication to guest service and support for the KOA system.
- Rob Althoff and Marianne Bartels won the KOA Work Kampers of the Year for 2010. The couple was nominated for the award by Kathy and Stuart Marshall, the owners of the Montpelier Creek, Idaho, KOA.
As the dust settles from the first annual Open House Week in and around Elkhart County, Ind., the region’s recreational vehicle manufacturers are beginning to assess the impact of what they experienced this week as at least 15 RV builders followed the lead of Elkhart-based Forest River Inc. in opening their doors to thousands of North American RV dealer personnel.
What makes it so unique and novel is that few of these companies worked together in orchestrating these open houses. No chamber of commerce or economic development agency called industry players to the table and proposed that they all, in concert, host dealers the week of Sept. 27-Oct.1.
This, instead, was more of a spontaneous action by RV builders intent on capturing the attention of North American RV retailers in the fall, even in some cases if it means pre-empting to an extent the industry’s traditional “Louisville Show,” the 48th Annual National RV Trade Show slated for Nov. 30-Dec. 2 in Louisville.
Again, Forest River started it all in 2008 when the economic atmosphere wasn’t all that good and the Berkshire Hathaway unit’s senior management decided to do something to build dealers’ spirits. Their answer was a big product show on the grounds of the company’s corporate headquarters on the west side of Elkhart.
“The recession led us to this because of our financial strength, and, being a strong company, we wanted to show the dealers that we thought that they needed a boost because a lot of the morale was weak that year,” recalls Forest River National Sales Manager Jeff Babcock. “We wanted to build the dealers’ confidence that, of course, Forest River’s going to be here and have them come down here, as we said, and stroll through the acres of product and have a good time on us.
“And I think we’ve got a pretty good reputation for taking care of dealers down here,” Babcock added. “We thought that, hey, it would be a good thank you to the dealers to throw something here. And, you know, we had a good turnout that year, and every year it continues to grow and grow and grow.”
The difference this year is that other manufacturers decided to piggyback on Forest River’s event with their own open houses on the same week, and the dealers came in droves, flooding area hotels, restaurants and bars starting on Monday. The action built up on Tuesday and peaked for the most part on Wednesday evening when hundreds of dealers converged on two sites in particular.
The social hour hot spots were rather predictable, as three Thor Industries Inc. divisions, Keystone RV Co. Inc., Thor Motor Coach and Breckenridge, worked together to host several hundred dealers at a happy hour gathering in a tent outside the RV/MH Hall of Fame on Elkhart’s east side. Some estimated the crowd at 650.
On the opposite side of town, Forest River presided over a blowout party so big – they say it drew in excess of 3,000 dealer personnel – that the company’s caterers were hard pressed to keep up. The party tent, which also featured live music like Thor’s, was positioned amid 500 display units.
From all we can tell, most all of the parties involved this week seemed to come away with a good taste in their mouths for the entire sequence of events. The general consensus was that, whatever occurred here in Elkhart this week, it was all “plus business.” And that goes for some of the smaller companies like Open Range RV, Evergreen Recreational Vehicles, Dynamax Corp. and Carriage Inc. for whom a story was posted earlier this week.
Manufacturers say that Open House Week did a good job of servicing an industry that is still finding its equilibrium on the heels of a global recession.
“It was fantastic,” said Doug Gaeddert, general manager of several Forest River divisions and first vice chairman of the Recreation Vehicle Industry Association (RVIA), sponsor of the annual Louisville Show. “Each year (the open house) gets better, and anybody who’s anybody in the RV business was pretty much in town this week. And, absolutely, it will be a record-breaking deal that will take us right on through into the first part of the year. It’s been fantastic.”
Gaeddert says everyone benefitted from the added participation of other companies. “I think it has benefitted the local community,” he said. “It’s obviously benefitted Forest River greatly and all the companies who have tagged on. I don’t know if there’s anybody left who didn’t do one this year. But if there are, I hope they do one next year.”
Forest River President and CEO Pete Liegl says the towable and motorized manufacturer drew in excess of 800 U.S. and Canadian dealerships and ultimately hosted 400 more people had pre-registered for the event, many of whom were bonafide buyers.
He says it’s all a general reflection of the industry’s surprising strength at this point in time. “Unquestionably,” said Liegl, “things have been good this year, and I think that things are going to be damn good next year. I really do.”
So, plan on Forest River following suit next year. “We’re running out of land,” said Liegl. “In fact, we added 20 acres next door that we didn’t have last year for extra parking. Heck, we can close down the streets next year, but I don’t know if we can outdo the enthusiasm of the dealers this year. I really don’t. Dealers are positive, happy, not only with us, but with everything. They’ve all had a pretty good year. They’ve survived 2009, and they’re operating much more like true businessmen, which is good, and I believe next year’s going to be even better. I really do.”
The general tenor of comments was much the same among the Thor companies that joined forces over at the Hall of Fame.
“It’s a good thing, a great thing for our dealers from all over the continent and overseas, and it’s a great thing for us as manufacturers,” Bill Fenech, president of Thor Motor Coach, told RVBUSINESS.com. “Dealers got to see a bunch of new products in a casual, relaxed environment. I can’t tell you how many dealers are saying ‘this is a great thing you’re doing for the industry.’”
“The venue here brings a whole different atmosphere,” noted Matt Thompson, vice president and general manager of Thor Motor Coach’s diesel brands. “And I think the dealers really appreciate it, and we’ve been able to really relax, sit down, spend a lot more quality time together with individual dealers and really rekindle some old relationships and build some new ones. It’s really unlike anything I’ve seen in the last ten years that I’ve been in this business.”
“For us, it was phenomenal,” Keystone President Bob Martin told RVBUSINESS.com. “It’s our first time doing it, and we’re very excited. We had great attendance.”
In anticipation of Open House Week, Martin said, Keystone moved some 2011 product changes forward on the calendar and had plenty for dealers to see. Fact is, Martin noted, September may be a better time frame for new model introductions rather than November or December when the Louisville Show is held – at least for some dealers and some products.
Thus, open house week could be playing a role in changing – to an extent – the industry’s habits. “It is,” said Martin. “Dealers are excited. They think it’s a good time of the year to come in and see product – a good time of the year to make buying decisions because they can buy new current product for the fall so they’re ready for spring show season. Everybody’s asked, ‘how does this affect Louisville?’ We don’t know yet. I mean, we’ll still have new products at Louisville and a reason to come to Louisville as well.
“Overall, though, it was very positive. Many dealers came through. They loved the product and the venue. You know, having it at the Hall of Fame is a draw. Many of the dealers actually haven’t been to the Hall of Fame, So, with that, it’s made the complete package with Keystone, Thor Motorized and Breckenridge. It’s been a very good venue for us.”
Indeed, the open house – a low-budget approach to manufacturer-dealer relations that has been used for years by individual companies — was a topic of choice over drinks at more than one local lounge as people began to analyze where all of this might lead.
Many in the industry have long treasured the fact that the recreational vehicle business still has a strong, single-site national show at which an entire spectrum of companies can participate, including component and service suppliers, aftermarket distributors, software vendors, finance companies, etc.
These open houses certainly aren’t cogent supplier venues, although a few suppliers did set up displays at a couple open houses. And their absence, most agree, would be a real problem if open house week ever gained an edge over Louisville.
Other concerns? How about the weather? The elements cooperated this past week; the weather was beautiful. But what if it wasn’t? With so many companies operating with outside venues, with tents in a few cases being the only shelter other than nearby factories and the insides of display units, the entire sequence of events was completely vulnerable to the elements. And everyone knows it.
As for expenses? While this whole phenomenon is sort of a low-budget sales tactic, it’s not all that cheap of an approach for the key manufacturers who covered dealers’ lodging, shuttle service and entertainment while in town.
And what about RVIA, the national trade association that depends so heavily on revenues from the Louisville Show to balance its annual budget? Louisville, loyalists point out, helps fund standards programs, political lobbying, public relations initiatives and so forth. What would become of the association and all of its critical services it if the wheels would ever come off the Louisville Show?
RVIA, for its part, is standing by and observing the whole scenario, cognizant, as RVIA President Richard Coon pointed out in a Monday (Sept. 27) statement, that “there continues to be strong, widespread industry support” for the Louisville Show.
“This year,” wrote Coon, “we will have 71 manufacturers and 230 suppliers displaying the latest RVs and products across more than 760,000 square feet of exhibit space. That is a substantial increase over the 604,000 feet of space used last year. Additionally, my colleagues at the manufacturing companies holding these events in Elkhart have assured me that the National RV Trade Show remains an integral part of their plans this year and moving forward.”
That said, few would argue that this past week’s activities around Elkhart County could be a harbinger of some eventual changes for the industry and, ultimately, for RVIA and the Louisville Show.
How much change remains to be seen.
“Well I think it’s changing the industry’s habits pretty greatly,” said Gaeddert. “As to the fate of the Louisville Show, which I know is a little bit of a question on everybody’s mind, I don’t think it threatens the Louisville Show. (But it’s) probably a little incentive for the Louisville Show to become a little more creative, raise the value of that product even further.
“Obviously,” he added, “I’m involved in RVIA, and I think it’ll push RVIA to increase the value of the Louisville Show and look at some issues – maybe timing – with respect to the value of that product. This is a competitive world, and I don’t care if you’re an association, a manufacturer, a publisher, if you don’t improve the value of your product continuously, somebody else will.”
“Louisville is a great show and it has its place,” noted Fenech. But he said that timing is a key issue because dealers who wait to buy at Louisville usually can’t get product in time for their key early retail shows – often not until February or March. In a perfect world where both the open houses and Louisville prevail, he suggests, dealers can do both – buy in September and December.
“Consider this a sneak peak at the Louisville Show,” adds Thompson, noting that his Thor division will be bringing significant new product to Louisville, including the company’s biggest unveiling of the year — a Class A that will be “one of a kind in the industry.”
“I think that dealers are taking more time in choosing the brands and the companies they do business with,” said Don Clark, president of Dutchmen Manufacturing Inc., a Thor division that set up separately on the north side of Elkhart in a vacant boat manufacturing plant. “And having an Elkhart open house will give them an opportunity to meet with the manufacturer and find out not only if the product is a good fit, but if the company and the people are a good fit for their businesses.”
Dealers with whom RVBUSINESS.com chatted in Elkhart generally viewed the open houses as a plus. “You can see product in a relaxed atmosphere,” said Doug O’Banion, president of Motor Home Specialist, Alvarado, Texas, a key Monaco dealer and one of Texas’s largest RV retailers. “It’s a great idea for the manufacturers and the dealers to come and see what they have to offer. If we see something we don’t have, we’ll order it.”
O’Banion, on the other hand, doesn’t see the open houses as a viable replacement for the Louisville Show. “As a dealer,” he said, “you will see at Louisville what the other manufacturers have. You have to go to Louisville.”
Jeannie Haught, co-owner of Northtown Motor Home in Rockford, Mich., also sees a lot of value in Louisville and suspects that the open house impact will be minimal. “This is a product show,” she said of this past week’s events. “Louisville is where you go to see what your competitors are carrying. This should not hurt the Louisville Show.”
But Roger Smith, owner of Smith Trailer Sales in Monroe, Ind., thinks this latest open house twist could make the Louisville Show obsolete. “I think we can do away with Louisville,” he said. “I saw more here than in Louisville. That’s the disappointment (vs. the National RV Trade Show).”
Based on what they saw and experienced this past week in Elkhart, meanwhile, Robb Cusack, Rod Roy and David Epp of Fraserway RV’s seven-store Canadian operations feel they may have seen a glimpse of the future. The trio, who visited Gulf Stream Coach Inc., R-Vision, Starcraft RV, Evergreen and Thor events, among others, think this whole open house concept is going to get legs in the future.
“I feel this is the new Louisville,” said Cusack, who runs the company’s Halifax store. “This is where dealers are going to come and see what’s new for the following year for product. I mean, it’s very exciting to be here. The weather’s awesome. And I’ll tell you what: The manufacturers have gone way over the top. There’s entertainment, food – I mean we didn’t buy one meal in four days. It’s amazing.”
There was a time in the 1970s until the mid-‘80s when the RV industry would gather annually each August in the sweltering heat of northern Indiana for what was then known as the South Bend Show. Dealers would come from near and far to be wined and dined by manufacturers and to see some new model year lineups.
New models would also be shown at subsequent private dealer meetings and then at the annual all-industry Louisville Show.
Now, the North American RV industry is headed back to the future to an extent this week as a host of companies — spurred by a budget-minded atmosphere in the wake of The Great Recession and by the success of Forest River Inc.‘s own big Elkhart dealer meetings over the past two years – beckon dealers to the flatlands of
Elkhart County for a series of “dealer open houses.”
Although it’s a bit later than the South Bend Show, which was held outside the Notre Dame Stadium, these new open houses should benefit the region’s hotels, restaurants, lounges and shuttle bus drivers in much the same way.
Forest River, a Berkshire Hathaway subsidiary that again sets up shop this week next to its corporate headquarters on the west side of Elkhart, is expecting 2,800 people and reportedly had registered more than 700 dealerships by the beginning of this week. Along with a series of dealer displays that will include everything from conventional RV’s to commercial trailers, boats and mobile latrines, dealers can expect lavish buffets and a bustling Wednesday night cocktail party that should rival the best of those good ‘ole days at South Bend.
“I assume it’s going to be as good as last year,” Forest River President and CEO Pete Liegl told RVBUSINESS.com.
Much the same can be expected across town on the east side of Elkhart at the RV/MH Hall of Fame as three Thor Industries Inc. divisions set up shop for the first time this year on the grounds around the RV/MH Heritage Foundation Inc.’s museum, library and hall near the Indiana Toll Road. This is the first year that Thor, another market leader, has hosted dealers for a September open house and, in the process, did not manage to station all of its divisions in one place like Forest River did.
So, Thor Motor Coach, Keystone RV Co. Inc. and Breckenridge will be manning displays – Keystone itself is setting up about 200 units on the hall’s periphery – on Wednesday and Thursday. Also on tap at the hall: Seminars sponsored by Freightliner Custom Chassis Inc., GE Capital, Ally Financial and Statistical Surveys Inc. plus a Wednesday night cocktail party – scheduled, perhaps coincidentally, at the exact same time as chief competitor Forest River’s. Tunes are being provided by the popular John Kirkwood band.
Keystone President Bob Martin, who tells RVBUSINESS.com that he’s expecting somewhere between 700 and a thousand dealer personnel to stop by, says Keystone has always brought dealers in during the fall for a look at new product. And while they’re stepping it up this year, his Goshen, Ind.-based firm is still planning an aggressive display with additional new product at RVIA’s 48th Annual National RV Trade Show, Nov. 30-Dec. 2 in Louisville.
‘It’s a good opportunity to get in front of your dealers in the fall,” says Martin, whose company will also host vendor booths and meetings with customer service representatives and retail and wholesale financing sources.
Just down the street a few minutes to the west at a temporary rented facility at the corner of Marina Drive and County Road 6, Thor’s Dutchmen Manufacturing Inc. division will launch an open house of its own tonight (Sept. 27) with cocktails provided by the Thor division and entertainment supplied by a group called Blammo. Displays, complete with continental breakfast, are open all day Tuesday and Thursday, closing out Thursday at noon.
Also kicking off the festivities tonight down in Nappanee – with a tailgate party, casino night and poker tournament — is Gulf Stream Coach Inc., which will be featuring a favorite of the company’s founder, the late Jim Shea Sr.: Daily lunch consisting of Stanley’s famous steak, shrimp and eggroll. Gulf Stream’s event runs through Thursday
“We believe recent developments in the RV industry will create great opportunities for the independent manufacturers,” says Gulf Stream Co-President Dan Shea. “We developed many new dealer relationships this year and we look forward to showing our new innovative, value-packed models.“
Also opening their doors to dealers this week:
Carriage Inc.: Tuesday through Thursday at the towable manufacturer’s Millersburg, Ind., plant.
Dynamax Corp.: Monday through Thursday at the company’s north side Elkhart plant at the corner of Northland Dr. and County Road 6.
Earthbound RV: Monday through Friday at the Spring Meadow Farm Golf Club east of Elkhart in Middlebury, as well as at the firm’s new main plant 70 miles to the south in Marion, Ind.
Evergreen Recreational Vehicles: Monday through Thursday at the company’s plant in Middlebury.
Livin’ Lite Recreational Vehicles: Monday through Thursday at the firm’s Wakarusa facility a few miles south of Elkhart off of Indiana 19.
Monaco RV LLC: Tuesday through Thursday at the Navistar division’s Wakarusa plant.
Open Range RV: Tuesday through Thursday at the company’s facilities east of Elkhart in Shipshewana.
Sunnybrook RV: Tuesday through Thursday, 8 a.m. to 5 p.m. at the company’s plant in Middlebury.
Meanwhile, adding to the week’s industry activities, Jayco Inc. will have about 250 retail personnel on hand for intensive sales training at its complex in Middlebury, Ind. Jayco’s second Master RV Product Training Session runs Monday through Thursday, with a graduation ceremony Wednesday at the Marriott in South Bend.
Thousands of recreational vehicle retail personnel will be converging in late September on the RV-building center of Elkhart County, Ind., as more manufacturers turn to local 2011 product displays in the wake of the Great Recession and a prevailing cost-cutting atmosphere throughout the business world.
What’s even more interesting is that they’re doing it in unison – at the end of September in synch with Forest River Inc.’s big Sept. 29-30 dealer gathering, now in its third year. In fact, it appears that Forest River has reinvented the wheel to an extent by bringing in hundreds of RV, cargo and commercial trailer retailers to its home plant in late September for a closed gathering at which dealers are wined and dined and treated to expansive new model product displays.
The Berkshire Hathaway Inc. subsidiary’s second annual 2009 “Pick Your Partner” open house last year drew 600 to 700 dealers — a total of 2,000 people – to the grounds outside the Elkhart-based company’s headquarters where retailers were treated to a display of about 350 units plus live music and staff-delivered beer.
Although Forest River’s management hasn’t said much publicly about its plans yet this year, it’s a safe bet that they’re expecting more of the same at this year’s dealer meeting. “I assume it’s going to be as good as last year,” Forest River President and CEO Pete Liegl told RVBusiness. “We’re getting a good response so far. We just started sending out the invites last week.”
The trend toward Elkhart County dealer open houses took a big step forward earlier this month when four Thor Industries Inc. subsidiaries, Keystone RV Co., Damon Motor Coach, Four Winds International Corp. and Breckenridge, announced plans for a combined dealer open house Sept. 28-30 at the RV/MH Hall of Fame Museum in Elkhart, Ind., for which they’re expecting 500 dealers. As many as 100 2011 models will be on display on the grounds surrounding the Hall of Fame.
Now, the latest to join the fray is Thor’s Goshen-based Dutchmen Manufacturing Inc., which has notified its dealers of its first-ever Sept. 27-30 open house at the former Azure boat manufacturing facility at the corner of C.R. 6 and Marina Drive not far from the Indiana Toll Road and the RV/MH Hall of Fame.
Dutchmen President Don Clark says his company’s open house will take place both inside and outside the facility, and will be highlighted by a Sept. 27 dealer party featuring live entertainment and some eye-catching 2011 product displays.
“We’re going to have some surprises that have yet to be viewed by any dealer,” Clark told RVBusiness. “We’re going to have not just one new brand, but several new brands that we will be selling at our open house. And it will be a good precursor for what the dealers will be seeing at Louisville (RVIA’s annual National RV Trade Show, Nov. 30 to Dec. 2 in Louisville, Ky.). We’re going to have our new sales management staff on hand, and it gives dealers an unharied time to get to know them better.”
Other companies are expected to announce their own “open houses” and “showcases” in the near future. Although details were still being worked out, Carriage Inc. Vice President of Sales Ed Kinney says his Millersburg, Ind., firm will hold a Sept. 28-30 open house in Millersburg. “We’ll have a nice display, show some new things we will show at Louisville, give some plant tours and have a good casual time,” he said.
Gulf Stream Coach Inc. also is joining in the September rush with an event scheduled for Sept. 27-30 at which the Nappanee firm will show 45 towable and motorized units.
Meanwhile, Jayco Inc.’s own annual Master Sales Training Sessions for dealers’ sales staffs is partly slotted in the same time frame.
Jayco, headquartered in nearby Middlebury, plans to bring in approximately 500 people for intensive sales training at its complex in Middlebury, Ind. The sessions run Sept. 20-23 and Sept. 27-30 and will involve sales training and extensive factory tours, reports Marketing Director Sid Johnson.
Jayco did not sponsor these sessions last year due to the economy, but traditionally holds the event at the end of September every year, Johnson reports. “Dealers pay for transportation. We pay for everything once they get here,” said Johnson, noting that the cost to Jayco is in the neighborhood of $200,000.
The whole emerging sequence of events, in turn, is beginning to prompt questions about just how many hotel rooms there are in the region to house an influx of business people of this magnitude. Elkhart County, in itself, has 2,591. And while it’s got to translate into a positive in terms of facilities use at the Hall of Fame, located along the Indiana Toll Road east of Elkhart, it’s also posing questions among some industry observers about how this emerging trend might ultimately affect the viability of the Louisville Show.
That said, some of the players in this emerging scenario like Clark and Keystone President Bob Martin seem to be keeping their focus on Louisville as well. Martin called Keystone’s September product display “a little preview of Louisville” that would include some – but not all – of the products his company would unveil at the national show in late November.
‘It’s a good opportunity to get in front of your dealers in the fall,” said Martin, whose agenda will include seminars and training, vendor booths and meetings with customer service representatives and retail and wholesale financing sources. ”It a good draw for Keystone with a couple of motorhome lines and Breckenridge (which builds park trailers). All the divisions are working on plans together. There will be a lot to see.”
“This is an absolutely exciting event,” said Tim Howard, president of Breckenridge,“ whose Nappanee-based firm participated several years ago in a Thor-only dealer show in Elkhart County, “because the way we did it before, it was far-flung. The companies who did it in unison did so at their own locations. This will be at one location.”
Howard said the Thor event was not specifically designed to coincide with Forest River’s “Pick Your Partner” event, but it makes sense. “I don’t think it was discussed as that,” he said, “but it is logical, It makes perfect sense for a dealer to have the efficiency of killing two birds with one stone.”
Dan Shea, Gulf Stream towables president, said the September event makes a lot of sense, giving dealers, especially Canadians, a chance to place their orders early.
“It’s a good opportunity for dealers who need product quicker,” said Shea. “There is a lot of reason for dealers to step up and buy product this October, November and December.”
Although late September dealer shows take some of the luster off Louisville for Gulf Stream and others, Shea added, “Louisville will still be a big show for us.”
Continuing an RV industry trend toward fall dealer meetings, four Thor Industries Inc. subsidiaries — Keystone RV Co., Damon Motor Coach, Four Winds International Corp. and Breckenridge — will hold a combined dealer open house Sept. 28-30 at the RV/MH Hall of Fame Museum in Elkhart, Ind.
‘It’s a good opportunity to get in front of your dealers in the fall,” said Keystone President Bob Martin. ”It a good draw for Keystone with a couple of motorhome lines and Breckenridge (a manufacturer of recreational park trailers).”
Martin said the open house would be ”a little preview of Louisville,” referencing the National RV Trade Show Nov. 30-Dec. 2 at the Kentucky Exposition Center (KEC) in Louisville, Ky.
”We will show some things at the open house that are going to Louisville, but not everything,” Martin said.
Individual planning is in process for at each division, Martin said. ”All the divisions are working on plans together,” he added. ”There will be a lot to see.”
Bill Fenech, president of both Damon and Four Winds, said that a major announcement will be made right before or during the open house.
”The bottom line is that we are looking to have an informal event with our dealers and give them a lot of product information and show them how they can make money with us,” Fenech said.
Fenech said both Damon and Four Winds will have new product on display at the open house.
The agenda includes seminars and training, vendor booths and meetings with customer service representatives and retail and wholesale financing sources.
Invitations sent to dealers the first of the week and via e-mail today (Aug. 4) offered to pay food and lodging costs at local hotels and provide shuttle transportation to and from the Hall of Fame on Elkhart’s north side.
Product displays will be open at the Hall from 1 pm. to 6 p.m. Sept. 28; 9 a.m to 6 p.m. Sept. 29; and 9 a.m. to 3 p.m. Sept. 30. A private party off-site is scheduled for opening night with transportation provided, while another is scheduled for the Hall Sept. 29.
The open house will be the first for Keystone in nearly 10 years, Martin said.
Earlier in the decade several Thor companies, including Damon, Four Winds and Breckenridge, participated in ”Thor Fusion” — a dealer open house at their different locations in northern Indiana.
Midwest Leasing Inc. has joined forces with Thor Industries Inc. on an exclusive basis to provide the RV park and campground industry with financing solutions.
Midwest Leasing Inc. will finance park model rental units for Airstream Inc., Breckenridge, CrossRoads RV and Keystone RV Co., according to a news release from Fran Wickenhauser, president of Midwest Leasing Inc.
Midwest Leasing Inc. originated in Milwaukee in 1985, but is now headquartered in Crested Butte and Gunnison, Colo. Midwest Leasing will provide conventional financing, as well as structured financing to coincide with a campground owner’s seasonal cash flow on terms up to 60 months. “At the end of the financing term your campground owns the park models/rental units. We will finance park model/rental units, including freight, as well as other capital equipment related to your campground, throughout the United States and Canada,” he said.
Advantages of financing with Midwest Leasing Inc:
- Will finance 100% of total purchase.
- Allows you to finance other equipment for your campground.
- Conserves cash resources for other priorities.
- Allows for structuring of your payments to coincide with seasonal cash flow.
- Allows you to pay for units as you are receiving revenue from their use.
- Allows for the same tax benefits as if you had purchased the units.
- Does not affect your bank line borrowing ability.
“We have been financing capital equipment for 25 years,” Wickenhauser said. “We have looked long and hard at the park model/rental unit marketplace and feel comfortable with the products from Thor Industries Inc. We are excited and optimistic about our ability to help campground owners in the U.S. and Canada who want to acquire park model/rental units, as well as other related equipment, for their campgrounds. Campground owners are finding that park model/rental units are providing two to five times as much income as a traditional RV site, so we think the time is right for us to enter the financing arena to help campground owners acquire these units.”
To learn more specifically about how Midwest Leasing can help your campground call or email: Fran Wickenhauser at (800) 203-8920; Bryan Wickenhauser, vice president, at ( 800) 398-2604; email@example.com; and firstname.lastname@example.org.
CrossRoads RV, Topeka, Ind., has become the fourth Thor Industries Inc. company to join an exclusive promotion that provides special pricing for recreational park trailers to be used as rental lodges by members of the National Association of RV Parks and Campgrounds (ARVC).
CrossRoads President Mark Lucas and Shane Ott, Thor Industries’ director of campground relations, announced CrossRoads’ entry into the ARVC-Thor promotion last week during the during the California National Association of RV Parks and Campgrounds’ (CalARVC) annual convention and trade show in Reno, Nev.
Three other Thor companies participating in the ARVC-Thor promotion include Airstream Inc., Breckenridge and Keystone RV Co.
All four companies offer unique lines of park model cabin and travel trailer units that have been specially designed to meet the durability needs of private park operators who are anxious to expand their offering of rental accommodations.
“CrossRoads is taking a very assertive approach in reaching out to private park operators,” said Ott, who developed Thor’s rental accommodations initiative after previously serving as president and COO of Kampgrounds of America (KOA).
Lucas, for his part, said input from private park operators has enabled CrossRoads to design its rental units to withstand daily wear and tear from campground guests. As a result, its rental units feature:
- 5/8-inch pine plank tongue-and-groove interior paneling instead of 1/4-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.
During the Cal-ARVC tradeshow, Lucas and Ott also introduced park operators to Fran Wickenhauser of Midwest Leasing, whose company has been given an exclusive contract to provide financing to park operators who purchase rental accommodation units through the ARVC-Thor promotion.
Other lodging units featured in the ARVC-Thor promotion include four Breckenridge park models ranging from 22- to 36-feet; two Keystone travel trailers, including one 29- and one 37-foot model; and one 25-foot Airstream travel trailer.
The world’s largest RV manufacturer, Thor has a long history of financial stability and annual growth. The Jackson Center, Ohio company and its subsidiaries currently produce 30% of the RVs and park models produced in the United States, which Ott said should assure ARVC members of a mutually beneficial and stable business relationship.
ARVC, for its part, is the largest association of private parks in the world, representing more than 3,600 commercially owned campgrounds, RV parks and resorts across the country. The association is based in Larkspur, Colo.
Editor’s Note: Thor Industries Inc. on Tuesday (March 23) announced that it is joining Midwest Leasing Inc. in rolling out a leasing and financing program for the rental lodging arena. Coupled with Thor’s previously announced vendor relationship with the National Association of RV Parks and Campgrounds (ARVC), the Midwest Leasing deal brings Thor’s team of RV lodging professionals full circle. Thor manufactures “ruggedized” rental lodging units customized to withstand the rigors of rental use under the Airstream, Breckenridge, CrossRoads and Keystone divisional brand names. Midwest Leasing, based in Crested Butte, Colo., will provide the financing to get them on site. “This Midwest Leasing announcement could not have been timed better, as ARVC owners are looking for the opportunity to add lodging inventory before the upcoming summer season,” said Shane Ott, a former KOA president and current director of campground relations for Jackson Center, Ohio-based Thor. His comments appear below with those of Midwest Leasing President Fran Wickenhauser, who is based in Crested Butte, Colo.
RVB: Why is this deal with Midwest Leasing Inc. important to the campground industry?
OTT: The No. 1 hang-up for campground owners right now is the lack of the ability to obtain financing. Banks have routinely struggled to understand the campground model anyway because our industry doesn’t have a lot of publicly traded companies. They don’t understand the dynamics. With the downturn in the economy it became increasingly tough. We’re providing an option. If you want to pursue lodging accommodations, we think we have an outstanding offering of park models and ruggedized RV units. It’s exclusive to Thor products.
RVB: How did this relationship unfold?
OTT: I pursued it. I talked to a couple of national lenders (about the program) and it was apparent it was going to be a long road. They didn’t say no to us but it was apparent this would be an arduous process going through two large companies, Thor and the institution. The window of opportunity is right now! Midwest Leasing, a smaller regional lending group, was able to move quicker and be more flexible with our needs at Thor. I spoke with Fran Wickenhauser, the president.
(Ott suggested RVB contact Midwest Leasing. Ott added, “Don’t be surprised if Fran answers the phone.” RVB called Midwest’s 800-number and sure enough, Wickenhauser answered the phone.)
RVB: Why are you entering the RV park and campground sector?
WICKENHAUSER: It is a brand new market for us but we have always known that sector of the market was out there. We’re a general equipment leasor; we finance any type of equipment, computers to school buses to construction and production equipment. We have leased motorhomes and travel trailers in the past; we just haven’t done it on an organized basis and we haven’t done it for the campgrounds
In this economy, credit is tight all over. Campground owners are not unique. We realize we are coming into a segment of the market in a time when credit is still tighter than it was two to three years ago. That is true in the lending community in general. We are confident this economy is on the slow rebound and recovery and that lending will get more relaxed in their requirements as times goes on.
RVB: You are in a sense a middleman in this operation. Please explain.
WICKENHAUSER: We are a privately held company and have been in business since 1985. We have bank lines of credit. That’s typically how it is done in the leasing community. We have a fair amount of staying power and have gone through a number of cycles and survived them all.
RVB: You have offices in Colorado and Arizona but you see this program as a nationwide program, right?
WICKENHAUSER: Yes. In lending community, it’s somewhat impersonal. Ninety-nine percent of the clientele I deal with, I never meet them face to face. All work is done on the Internet and in e-mail and the electronic world we are all in. We cover the entire U.S. through the Internet. It’s a very expeditious way to handle that. You attach documents and quotes and can have it on a campground owner’s desk within 30 seconds. We’ve been covering the entire U.S. for 25 years. Now the campground industry will become a part of our world.
RVB: Walk me through how this would work for a campground owner seeking to use your service.
WICKENHAUSER: The campground owner will come with a borrowing request. Let’s say he wants to buy five park models, $40,000 each for a total of $200,000. The campground owner would ask for a quote. We say we’ll provide a quote within 24 hours, but typically it might be within the hour. We’ll e-mail the quote. If the quote is acceptable, we will send them a credit application. Within two to three days of the return application, the campground owner would receive a credit decision. If the decision is positive, we would move forward with a lease agreement. At this point, we would wait for Thor to deliver the park models. As soon as they are delivered, Midwest would pay Thor and the lease commences, with the campground paying Midwest Leasing. Typically, a lease would be for five years. At the end of 60 payments, they own the park models.
An analogy would be school buses or modular classrooms for schools. We’ve been working with school districts for years.
RVB: The initial response has been good, we understand.
WICKENHAUSER: I’m getting calls daily from interested parties, be it KOA, Jellystone, associations or sales and marketing people. The information is so new it’s just now being released. I’m hearing from marketing and sales people from Thor Industries, from people who want to better understand the program.
RVB: How do you see this business unfolding this year?
WICKENHAUSER: I have no idea, only because I don’t know if Thor knows how many people will be interested in financing their products through Midwest Leasing. I think we’ll get a good feel for this in the next six to nine months, after the summer season and some trade shows. I’ll be in Reno in April and standing next to the Thor people in their booth as they market their products to the campground owners…We’re all very hopeful it will be very productive for both of us. It’s all based on the strength of the individual campground entrepreneurs. As I told Thor Industries, each opportunity has to stand on its own two feet.
Publisher’s Note: KOA Chairman and CEO Jim Rogers is arguably the industry’s most relentless marketeer. A former Harrah’s Entertainment Inc. executive, he has etched KOA’s yellow brand into the American psyche and now looks to change the face of KOA’s 463 parks — and American campgrounds in general — with the infusion of more and more sedentary camping “cabins” and “lodges.” Here are the highlights of an interview conducted during KOA’s Nov. 17-20 convention at The Woodlands Waterway Marriott in the Houston suburbs.
RVB: The general atmosphere of your convention was pretty positive, given all of the headwinds that the American economy has faced recently.
Rogers: KOA has just come out of its strongest summer in 47 years. If you take camper nights and registrations for the period of June, July, August and September, we’ve just exceeded anything we’ve done in the past. Where we hurt in 2009 and anticipate hurting this winter and probably early 2010 is in the Snowbird markets that are more dependent on a fixed-income lifestyle. What we did not see last year in America is the transient Snow Bird.
So, we had the resident Snow Bird that headed into Texas and Arizona and committed to three or four months, but the people who were going down and spending a month here and there did not show up. And that’s what we don’t have any certainty about.
Having said that, the cruise lines are indicating very strong advance reservations, which to me is the same market that we look at for this transient Snowbird. But it’s hard to predict that. Again, we anticipate the 2010 summer will be as strong as 2009’s was, if not a little better.
RVB: Looking back at September of 2008 and the economic meltdown that occurred then, could you have imagined that you’d be sitting here now coming off a near-record 2009, with gains anticipated in both camper nights and revenues?
Rogers: No. We went into our plan for 2009 very concerned. The surprise was that we quickly became the affordable (lodging) option. America traded down. They traded down everything they’ve done, and we exceeded expectations. They’ve gone to Costco more aggressively than they did previously, as they did with the camping alternative. If people were going to take a vacation, instead of staying at a Marriott or going to Europe, they decided to go camping again.
There were record tent sales last year in the United States. People found a different way to get outdoors. And, again, we continue to see people staying closer to home – even though Yellowstone Park, a distant destination, posted a record year.
And when they went to a KOA campground, they didn’t find their grandfather’s campground. They found the latte machine, they found (park model) lodges that had a bathroom and kitchen in them for $125 and a swimming pool and they were surprised. They were hooked. We continue to see 14-15% of our campers are first-time-ever campers. And among the first-timers, 50% are families. That’s great news for us that we are bringing in new people to experience KOA and the campgrounds that we’ve got. That’s going to play well long-term.
RVB: So, what do you really think these newbies are looking for in terms of camping accommodations?
Rogers: Anyone who has an investment in an RV brought their gear out of the garage this year. They might not have used it for a while. But our greatest growth will be a double-digit increase in camper nights in the lodge business — the 400-square-foot park model that offers a kitchen and a bathroom and a deck out front. That’s where our greatest growth is, and that’s why we’ve developed the new models with three suppliers, General Coach, Cavco Industries Inc. and Thor’s Breckenridge division.
RVB: What, in your opinion, is behind this evolution to more sedentary – or “destination” — styles of lodging?
Rogers: A lot of things are. Initially, it was this trend toward staying closer to home. People didn’t want to spend the gas or didn’t have the RV and they wondered what to do. In the process, people began to realize that these accommodations were there.
If you talk to our franchisees, they’re going to tell you they had 20 requests (for park model “lodges”) that exceeded what they could fulfill.
At the same time, the lodge customer gives us the highest satisfaction rating by 10 points. If you ask our lodge customer what they think of the experience, they are way above the average. They have the highest intent to return and they tell us they get the best price value. And they are paying the most for the experience. It’s all there. What a future!
RVB: What’s the demographic profile of a “cabin” or “lodge” customer?
Rogers: They skew more to families and first-timers and people who drive up in a car. It’s basically a customer who is right now using a motel or hotel. That’s where we’re going. We are learning from our Australian friends (Big 4 Holiday Parks, with whom KOA has a marketing partnership), who have 32% of their inventory in cabins and lodges.
You are going to see KOA on Travelocity, Orbitz, hotels.com. You talk about a new market and what we’ve got to offer; we’ve got to get the inventory out there.
Plus, KOA is going to produce a million directories in 2010. We intend to mail 400,000 to our Value Kard holders, and in the middle of the directory is a five-page, full color lodge brochure. You are going to begin to realize there is indeed a different offering in that experience. The fact is, with a motel, you get a room. What we are going to tell people is that this is a social activity.
RVB: To what extent do you anticipate expanding your lodge business?
Rogers: We’ve got 4,000-plus cabins (smaller units without water), but we only have about 1,000 lodges (generally park models with full facilities) among our 56,000 sites. That’s about 10% that are currently this type of accommodation. We’ve got to increase that inventory to go out to the market and grow this segment of our business – tremendously.
In the next three to five years, we hope that gets closer to 15-20% of our total inventory. It won’t happen that fast. That’s an aggressive goal. We are going to lead the charge at our 25 company-owned properties.
RVB: Needless to say, this would be a huge shift in the basic character of a so-called RV park or campground if it actually occurred to the extent that you’re describing it.
Rogers: There’s no question that the mix is dramatic. We have RV inventory with full hookups that is going unused that is getting $40 to $45 a night, and we put in a unit and we get $150 a night using the same real estate using the same hookups and the demand is right there behind it.
RVB: Do all of your lodges exude that “rustic” look that we’ve seen so much of lately?
Rogers: KOA has a team that has gone to the manufacturers, CAVCO and Breckenridge and General in Canada, and designed eight different models that run from a studio model that is probably 199 square feet to the big baby, which is 400 square feet. They all have bathrooms and kitchens and they all have concrete siding that looks like wood. They look like something from New England. Most of the inventory will be a log-side perceived look. That reinforces the cabin look that we’ve created. This is where we have an incredible growth opportunity.
By no means are we going to say adios to the RV industry. But we see the ability to be more diverse to whom we appeal to and we’ve got to reorient how we meet the demand for the supply that is out there.
RVB: So, do you also see growth in the entry-level type campers who, in some cases, prefer tents?
Rogers: We’ve definitely seen an increase in our tenter business. But the problem we’ve had is that over the last few years, we’ve reduced the inventory of tent sites. It’s a matter of figuring out what we have, and, ultimately, we see the tenter converting to a lodge or cabin.
RVB: With regard to private parks, many states are under extreme economic financial pressure. Your thoughts on all that?
Rogers: We all have to realize that public parks are as diverse as commercial parks. And we need to make sure that national parks still draw people for vacations and do a good job of taking care of them.
The more localized experience, the state parks that are indeed in dire shape, I think they will continue to be in difficult shape, and, hopefully, American campers will consider the commercial option more so than they have in the past.
The states need to find a new economic engine.
The other thing is that campers are coming to expect a certain level of services and the states aren’t going to be able to provide that.
So, some people who are partial to public parks have now begun to try the commercial side, and they’re pretty happy. They are more entertained and they are staying closer to home. They are staying longer and they expect a little more. Fishing for four days isn’t going to keep them entertained. They need something else going on. So, while I want public parks to continue to operate, I know that some of the business is going to swing over to us.
“We welcome this partnership and feel that the favorable pricing and unique designs of these units will be very enticing for campgrounds, RV parks and resorts as they continue to diversify their business base with rental accommodations,” said Linda Profaizer, ARVC’s president and CEO.
About one-third of the nation’s commercially owned campgrounds, RV parks and RV resorts offer rental units to accommodate families and other travelers who don’t have an RV, but want to enjoy the Great Outdoors – and the numbers are growing, according to the release.