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.