Editor’s Note: The following is a portion of an interview conducted by Woodall’s Campground Management with Kampgrounds of America Inc. (KOA) Chairman and CEO Jim Rogers. KOA, celebrating its 50th year, records over 15 million camper visits annually. To watch a video of the entire interview click here.
WCM: KOA has a storied history. Your brand is the best known in camping circles and among non-campers as well. The company was recently named one of the Top 50 Franchises in the U.S. Tell me what you think are the major company developments and accomplishments and milestones along the way in the past 50 years.
ROGERS: Well gosh, I’d need an hour to do that, maybe even longer. But let me just try to identify some top ones. I think the recognition that we continue to receive that you just mentioned is essential in any franchise organization. The fact that we are receiving great feedback from our franchisees, and that’s what we were measured for, to be one of the Top 50 Franchises in all those hundreds of them out there, so that’s an accomplishment for sure.
A milestone is we just did a Harris Poll in 2011; the Harris organization is a very prominent research group. And we learned that 25 percent of American adults have stayed at KOA at some point in their lives in the last 50 years. So we’ve touched a lot of Americans. And obviously at the heart of our business is the whole idea that we’re helping Americans and visitors to our country and Canada to get outdoors with their family and friends, and that’s certainly a part of our culture.
I think the other milestone is the consistency of our brand. We are known for a great experience no matter where they travel. And again, that’s a tribute to our wonderful owners and staffs. KOA.com, as a website, does twice the traffic of all the others in our business combined. It is a horse. It is a great source of information, and I think the technology that we’ve created to support that effort serves the entire industry well.
I think a milestone of reaching halfway around the world to find a sister company or a partner in the Australian KOA, called the Big 4 Holiday Parks, is another accomplishment. We’ve looked a lot of places, and these people are so great and ahead of us in many ways, and we’ve been working on that for about seven years.
And I think lastly, the greatest milestone of our business and of KOA is that we’re guest-driven. We have done so much in the last 10 to 15 years to indeed orient ourselves and our evaluations, based upon the ultimate umpire, which is our guests.
So I think we’ve had a super history and we’re not going to dwell too much on where we’ve been. We have so much going on that’s going to focus us on where we’re going in the next 50.
WCM: Jim, that was a great segue into my next question. KOA is constantly monitoring its customers’ likes and dislikes, and you have a very sophisticated way to do this. Tell me what you learned in 2011 about your guests.
ROGERS: We started with guest feedback the day we opened 50 years ago. Dave Drum, our founder, actually would go down in the evening and handed out a survey, and we actually have the results from that original survey. So guest feedback and impacting our strategies and driving our business has been critical.
Specifically about what we learn, you have to appreciate is that our owners and operators receive today specific verbatim detail on the experience of their guests yesterday and the day before. So it’s not about necessarily a trend. Certainly at KOA headquarters we look at the data and the verbatims and see if there’s something common, is it a fact or if it’s Wi-Fi problems or is it cleanliness problems or, you know, general kinds of things. But the real true benefit here is there are owners and operators that have such pride about the performance of their parks that are getting specific details, both positive and constructive criticism about what the guests experienced just recently, and that has made it incredibly strong in terms of upgrading the overall quality.
And I think the other thing that has been accomplished in the last four or five years, because we have this measurement and this monitoring, KOA’s overall system quality is improved. Last year alone in what we call the ‘net promoter score,’ which is a device that many, many organizations are using to question their customers about whether they would recommend the brand or their service to others, we saw an 8 percent increase across our system. So KOA continues to make a tremendous commitment to that guest feedback and the fact that we get verbatim detail for each franchisee, makes a tremendous impact on where we’re going.
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.
Jim Rogers, chairman and CEO of Kampgrounds of America Inc. (KOA), will join an industry panel discussion examining the current economic factors affecting the RV industry during the RV Dealers International Convention/Expo at the Rio All-Suite Hotel & Casino.
The panel, titled “RV Market: Rebound in Sight,” will be led by RV industry’s retail scorekeeper Tom Walworth of Statistical Surveys Inc., Grand Rapids, Mich., on Wednesday, Oct. 7 at 2:30 p.m., according to a release from the Recreation Vehicle Dealers Association (RVDA).
Rogers currently focuses on strategic partnerships and corporate growth for KOA. KOA offers more than 55,000 RV, tent, and Kamping Kabin sites at more than 450 U.S. and Canadian campgrounds.
In addition to Rogers, the panel of industry experts includes Mark Beecher, senior vice president of sales and marketing for Bank of the West, and Derald Bontrager, president and COO of Jayco Inc., Middlebury, Ind. The group will focus on the mindset of today’s RV traveler and what products they will buy, how these trends will impact the market, and how dealers can better position their dealerships for success.
“We are fortunate to have these knowledgeable people in the RV industry join us for what will be an interesting and informative session as we prepare for the recovery that we know is coming,” said RVDA Education Foundation Chairman Rick Horsey.
This is just one of the workshops planned for the RV Dealers International Convention/Expo featuring the RV Learning Center, which will be held Oct. 6-9. For special advance registration savings, register by Sept. 4. For more information and to register, visit the convention section of www.rvda.org and follow the RV Learning Center and convention on Facebook and Linkedin.
Meanwhile, advance registration for the event is exceeding expectations.
With the deadline on Friday to take advantage of discounts, RVDA has 280 people from 163 U.S. dealerships and 59 people from 34 Canadian dealerships registered, according to Phil Ingrassia, RVDA vice president of communications
“It’s better than we thought,” he told RVBUSINESS.COM. “It’s not up to last year (when 560 dealers were registered). But to be honest with you it’s better than what we had budgeted for. We’re very pleased with this turnout but we would like to get it higher.”
He said RVDA would mount a big push this week to urge dealers to sign up to take advantage of the best rates to attend.
“We knew it was going to be a tough year, but we think we have put together a good value proposition for dealers,” he said. “We have good workshops, good hotel rates at the Rio and tried to keep all costs down. It will still be a very important meeting.”
RVDA has tracked 160 dealership closings since 2008, but with RV production picking up across the U.S., there are signs that the worst is over.
“That’s what we’re hearing from a lot of dealers,” Ingrassia continued. “You’ve got to feel like it will be better in 2010. but some dealers are still having a lot of issues. We’ve built the (Expo) program around that — financing, business planning and human resources. These are issues dealers have to look at when they get ready for the recovery.”
Pat Hittmeier, a 28-year veteran of Kampgrounds of America Inc.’s (KOA) home office in Billings, Mont., and most recently the vice president of its Sales and Campground Development Division, has been promoted to the position of COO for the 47-year-old company.
Hittmeier replaces Shane Ott, who has resigned from the positions of president and COO of KOA Inc. The position of president will remain vacant, according to Jim Rogers, KOA’s CEO and chairman, and the duties will be split between Hittmeier and Rogers, according to a news release.
“Pat Hittmeier has done nearly everything there is to do at KOA, so he brings a depth of knowledge to this position that just can’t be matched,” Rogers said. “Early in his career, he worked in our Company Operated Properties Division, learning the nuts and bolts of campground management. He later was in the field, building new KOAs like the beautiful park we have in Polson, Mont. He’s also been at the helm of our Franchisee Services Department, a very complex operation that is at the very heart of the value KOA brings to its franchisee partners. He intimately understands the needs of both our staff and our campground owners, most recently as vice president of sales and development, where he has achieved the remarkable result of adding 50 new campgrounds to KOA in just two years.”
Ott, who is ending a 23-year career at Kampgrounds of America, is planning to create his own consulting business, to be based in Billings. He served as KOA’s president and COO for the past 2 1/2 years. He had previously been the senior vice president of KOA’s company operated properties.
Hittmeier, a native of Litchfield, Ill., is a graduate of Southern Illinois University in Carbondale. He moved to Texas after graduation and worked with youth outdoor education programs in Houston and Waco. In 1977 he moved to Montana and became a forester for the state of Montana. In 1979, he came to Billings to be sales coordinator for the Mossmain Industrial Park before joining KOA in June 1981.