Seismic Shift

If you have been paying attention at all to the industry, you know there are monumental changes occuring.

I am not talking small changes, I am talking disruptive changes. Some are common knowledge, some are about to be revealed later this year.

Change is inevitable, and this article from RV Travel highlights the changes occurring in Outdoor Hospitality.

Like it or not, change is coming and it is not a trickle, it is a raging river. Getting with the program, taking advantage of new technologies, and adjusting to the changes will be an exciting adventure for all.

I have been in the industry for 20 years, and I have never witnessed so much change happening so quickly. Mom and Pops are selling, corporate investors are flooding in, software MUST change to meet the demands, and cutting edge ways to travel are about to be revealed. AOS is keeping up with all of it, and is looking forward to being at the forefront of the shift!

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Getting Comfy in Buying Parks

We have noticed an interesting phenomeon in the buyer and seller relationships this past year. Our clients are most often the buyers, and the sellers are most often couples or family groups.

While 90 percent of the processes are easy and all parties are on the same page, 10 percent of the time we see things become rocky. Typically, it has to do with one spouse being excited to sell and the other spouse wanting to hold the asset. The same with family groups. Some of the members wish to sell; others are not sure what life will look like outside of running a park.

When the latter occurs, it can make the due diligence period painful. One way to protect yourself during this phase is to have a “Comfort Clause,” or “Letter of Comfort,” as part of your agreement.

Will Kenton, Writer for Investopia writes:

Two parties in a business deal can use a letter of comfort to put in writing the outline of the terms of their deal. Most major business transactions require a lot of time on management’s part to perform due diligence before they can finalize a deal. A letter of comfort can summarize the steps each party agrees to take to ensure the successful completion of the transaction. A well-written letter of comfort can assure each party that the time spent on completing these tasks will be well worth the effort.

This clause calls for access and data to be shared in an open and accessible way. It prevents sellers from holding out on important information until the day of settlement. It calls for transparency regarding files, figures, permits, site access, and inspections.

Many times, the sellers are reluctant to allow buyers on site to take photos needed for a new website or to gain access to their PMS system in order to pull reports needed for budgeting and forecasting. This hinders our clients and puts them at least a month behind where one should be on opening day. An important corollary to this occurs in connection with paid reservations. The buyer wants to know what payments will be delivered to them at the time of settlement.

Adding a “Letter of Comfort,” to your LOI’s or Purchase Agreements can ensure you get the data and the access you need to make informed decisions well before the day of settlement.

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Take a Listen

We were excited this week to have our Founder and CEO, Kathleen Walsh, featured on the “Fireside Chat,” series hosted by Brian Searl of Insider Perks and Cara Braeutigam of the Canadian Campground Association.

You can listen the the Podcast here.

They discussed 3rd Party Management for RV Parks and Campgrounds, who is and is not a good fit for 3rd Party Management, and why AOS is the fastest growing company in this space.

Take a listen to this informative discussion and let us know if we can answer YOUR questions regarding 3rd party management of your assets.

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Making New Campers Feel Welcome

This week I did a swing through some of our Northern parks. Namely, the states of New York and Maine.

One thing became very apparent, there are scores of new RV guests out there this year. As I worked the parks, many guests came in nervous on their maiden voyages or in their rental. They were excited to start the adventure, but apprehensive about getting started.

This presents both challenges and opportunities for you as park owners this year.

The challenge is making sure you have the staff on hand to assist these guests. Many of them were asking for assistance in getting connected or backing in. Many were unsure of how to setup even the most basic functions inside their rigs. Most were still nervous driving. This can be particularly challenging for night scheduling. Making sure you are well staffed in the office and on the grounds -both day and night- is going to be paramount this season.

Having said this, I believe the opportunities far outweigh any challenges. By assisting new RV’ers to the art of camping you make a lifelong guest. They will never forget how you helped them learn about their rig, get connected, and made their first stay a memorable one. The security of having water, electric, sewer, and propane properly connected gives them a sense of comfort and helps make their next stay a more educated one. The old fishing adage might now be rephrased as, “Hook a man up and you make a nice one time stay, teach a man (or woman) how to hookup and you make a educated lifelong RV’er.”

Take these new RV guests under your wings this season and help become safe and happy campers.

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Winning the West

It is with great excitement we announce the addition of two Durango Colorado parks to the AOS portfolio.

Colorado is one of our fastest growing states, and we are honored to be adding two more. Vallecito RV Resort near Vallecito Lake and Durango Riverside on the water in Durango.

We have great plans for these parks and you will want to check them out. We will be rolling out marketing, doing upgrades, and keeping Durango open year round for those ski enthusiasts who want to downhill at Purgatory or Cross County most anywhere in the area.

Vallecito RV Resort is located just minutes from beautiful Vallecito Lake at an elevation of over 7000 feet. We will be adding wifi and upgrading the cabins throughout the season. We are excited about this beautiful property.

The AOS team is on site on-boarding these parks and training the wonderful staff we have placed at these parks.

These are our 4th and 5th parks under these owners and we look forward to continuing the journey!

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Four Seasons at Lake Anna

For those of you interested in the Powerpoint presentation, please see the attached PDF version.

We appreciate you joining us today for the roundtable discussion of this great project. As we stated, this outdoor venue will bring a high-end resort style amenity to the already stunning area around Lake Anna.

Please feel free to reach me with questions. I can be reached at kwalsh@advanced-outdoor-biz

Check out some of the luxury parks we have helped build:

www.castawaysrvoc.com

Chesapeake KOA at Sunset Beach

Chincoteague Island KOA

Thank you again for your fantastic questions during our presentation. We look forward to seeing you at the lake!

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How Low Do You Go?

I am from the lovely seaside town of Ocean City MD. If you are from Ocean City, you LOVE the beach, Thrashers Fries, Dolles’ Popcorn, Steamed Crabs, and walking along the famous boardwalk. “Hitting the Boards,” is an activity young and old enjoy. Most shops do not close until midnight or 1 AM, and my entire life it has been safe to stroll until those hours. Our kids took their first jobs on “The Boards,” and we never once worried about their safety or that of their co-workers.

Last summer, “The Boards,” turned into something that shocked both locals and vacationers alike. It became a dangerous, crime riddled gathering place for thugs, drug dealers, and murders. It became something we had never seen. Nightly property damage, fights, and even a few deaths occurred. Businesses were closing as early as 8 PM in order to avoid what would happen after dark. It became a strange place to those of us who had lived in OCMD our entire lives.

When talking to locals about the cause, they were numerous and varied, but everyone agreed on one thing-COVID had caused oceanfront hotels to drop their prices so low, that now gang members and ne’er do wells could afford to come to a town that was one outside their price range. In attempting to make a buck, the hotels had discounted themselves so low that their property was being damaged and businesses in town shut down at early hours in order to avoid the dangers. The cost to lives, the town, and the hotels mounted to point where it became untenable.

In hospitality, there is such a thing as pricing yourself too low. There is a temptation to do so when occupancy is needed, but you can indeed cut prices to the point of damaging your income and your reputation.

Rule #1-Know Your Breakeven

Knowing your break even is one of the ingredients in setting nightly minimums. It is not the ONLY data point to consider when considering rate management.

Regular Rate $45 per night

Break Even $25 per Night

In the above scenario-any rate below $25 per site night results in a loss.

Rule #2 -DO NOT diminish your brand

As in our Ocean City example above, lowering rate did indeed increase occupancy, but it greatly increased costs and damage to the brand. Room damage, glutenous behavior at the breakfast bars, and reputation damage are just a few of by products the OC hotels faced in the aftermath of the deep discounts. According to Hospitality.net

“Discounting rates too deeply, even as a stop-gap measure against demand loss can yield negative effects for parks and the overall market. Nobody wins in the aftermath of a price war. Discounting rates in order to increase occupancy will induce higher costs on a per-site night basis and decrease profit margins. Perhaps the most deleterious effects lie in the long term, and these effects may not warrant consideration as parks struggle with the immediate challenges of their day-to-day operations. A better solution to discounting is to offer additional value to the customer without sacrificing rates.”

Rather than reducing rate, consider bundling a golf cart, a free pizza, or a free rental bike. These can be valuable add-ons without slashing rate. Once your reputation is diminished, and good guests are chased off by rowdy ones, it can be very hard to get them back.

Keeping these few items in mind, you can work on a strategy that achieves revenue goals without the pain of diminishing your brand.

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Pets Mean Profits

For those of you who offer cabins or cottages-there is often a struggle between allowing pets in these units or prohibiting pets from in roofed accommodations.

As with all things AOS, we allow the data to do the speaking.

Below is a graph showing how much more pet friendly units are booked compared to non-pet units. For this particular sites, type Pet Units booked 4 times more often than non pet units. A pretty staggering statistic.

Added to this, a per day pet free of up to about $35 per night can be added to pet friendly units.

The most often cited argument against pet friendly units is, “Pets will damage my cabins.” I can assure you, after 20 years in the industry, inebriated adults and kids have done much more damage than pets. If you build your units with pets in mind, you will have easy cleanup and damage will be minimal. Use LVT Flooring, easy to clean surfaces, and upholstery which easily vacuums, you will have little to no damage and ease of cleaning.

Keep a few pointers in mind. Limit your units to 2 pets. Provide a broom and dustpan, and even a pet blanket for covering furniture. Remember, you cannot charge pet fees for Service Animals. Most of all, embrace this money making trend and count your green.

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“It Ain’t Braggin If It’s True”

The above quote has been attributed to Will Rogers, Dizzy Dean, Yogi Berra and Bear Bryant. Thus, we were not sure to whom we should assign the credit.

We do know, however, where to assign credit for some of the amazing numbers our Snowbird, Sunbird, and Winter Texan parks have seen this winter. Our great staff at the corporate office, the staff at our parks, and the great owners who let us do our thing.

With spring upon us and their should seasons approaching, we would like to share some highlights (names are not shared to protect the data)

Park A -Florida January and February NOI 63% over budget

Park B- Arizona Revenue up 300% Since AOS Takeover in January

Park C- Rated 10/10/10 by Good Sam February 2020

Park D-(PA) Bookings up over 50% from same time last year

All in all, a pretty good end of 2020 and start to 2021 if we say so ourselves.

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