One Size Does Not Fit All

When pricing your sites, most parks realize that backs in sites, pull thru sites, etc. should be priced differently and they do so accordingly.

What many parks do not take into account are the nuances between like kind sites. Thus they price all back in sites the same, or all pull through sites the same, though there are nuances between the same site class that would allow for differentiation in pricing.

This week I am out west and visiting new clients along the Pacific Coast. As I walk the parks, it is clear that the pricing structures need to change. For instance, one park has all back in sites priced the same. Yet-four of the sites have stunning, and I mean stunning, Ocean Views. Looking at the occupancy, these sites are in high demand. They should NOT be sold at the same price as the regular back in sites.

Another park has back in sites on the interior, but near the pond. Again-as we say at AOS-“There is waterfront and there is everything else.” Thus, waterfront or water view should never be the same price as other sites.

This seems simple, right? All waterfront or water view should be higher, but there are other circumstances that are not as evident. Even if parks up-charge for premium views, they often fail to charge for desired locations. Some desired spots are near pools, playgrounds, or cul-de-sacs. Others might have sites close to bath houses or amenities that cause guests to covet those sites above others. Look at the guests behavior and their requested sites and you will quickly see where are few more dollars added to the ADR can mean tens of thousands of dollars added to your bottom line.

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The Why Behind The Rules

Rules and structure have always been very important to me. It is probably why I chose to study accounting in college. Accounting follows very logical rules, and at the end of the day, the math adds up and is reconcilable. Black and white thinkers like me love this about accounting.

Rules, however, must make sense. There must be a method behind the madness. We often go into parks and find rules and regulations in place than not only make NO sense, but they are a hinderance to the overall guest experience.

One recent example is a park with, “No Dogs Over 40 pounds permitted in the park.” When I asked if it was a local code ordinance, they said, “No,” When I pressed further and asked why they had this rule, there was no reason. It was just always there. I pointed out that Labrador Retrievers are the number one breed in the US, and they are almost always over 40 pounds. The park, without any good reason, was banning guests who own the most popular breed in the nation.

Another absurd interaction was with a GM who had refused to allow coffee makers in the cabins. When we ordered them and they arrived on site, there was major pushback. There was-again-no good reason for this rule. When pressed, the GM replied, “They can walk to the office to get coffee.” Clearly, guests do not want to get dressed and walk up the road just to get a cup of coffee. Again, rules with no diminishing the guest experience.

Code compliance rules are one thing and are meant for matters pertaining to health and safety. Random rules with no rhyme or reason are often made by staff who do not wish to deal with pets, children, guests-or coffee. This is a bad precedence to set for any hospitality venue. The goal of a park is to make the guest experience one of fun, relaxation, pampering, and overall enjoyment. Check your rules and make sure your guests are not hearing, “No, No, No,” when “Yes,” is a much more welcoming word.

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Moving Dirt and Taking Names

Having just returned from a long road trip-we are beyond excited to see some of our land plans coming to fruition.

It is exciting enough to see our land plans on paper, but when we are on site and see the dirt moving and the sites taking shape, there is a whole other level of anticipation.

What makes our land plans better than others? Well for one, we approach all our land plans from the operational and guest experience perspective. Will it work for the guest and maximize revenue? These are our first questions.

We also want to know how to maintain the environment so that both nature and guest are protected. We plan to make sure the modern day guests and their families are able to navigate our property safely, and their four legged family members will be included in the experience.

Lastly, outdoor hospitality is all we do. Our land planners know where to place the utilities, how to arrange the sites, how to create unique amenity areas, and how to draw a flow that works. They make sure there is enough density to make the numbers work, but enough space for guests to get the entire outdoor experience

Our parks have won awards, have been nominated for ARVC parks of the year, and most rewarding, have afforded young and old alike unique vacation experiences and a lifetime of memories.

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What Not To Do Wednesday-Ignore the Loopholes

No matter how well intentioned, park owners often fail to close the loopholes that lead to lost revenue. The familiarity and family atmosphere often prevent these owners from running their parks like a well oiled machine.

In our experience here is the list of place where we clamp down and help our owners spot lost revenue:

  • Laundry-Make sure whoever empties the laundry machines is someone who is trustworthy, records the revenue immediately, and makes the deposit the same day. Ideally, it would be a two part system where one employee empties the machine while another looks on while the quarters are weighed and recorded. Better yet, move to credit card or blue tooth enabled machines that bypass cash altogether and the money land directly in your bank account.

Vending Machines-the same holds true with coin operated vending. Make sure there is accountability with the way the money and supplies are handled. It is very easy to find sodas, snacks, or money missing when you do your own on site vending.

Propane-Propane is invisible and can easily slip through the cracks. Make sure you keep a propane pumping log at the pump, there is a clear process for pumping and payment, and no guest is allowed to get tanks filled without prepayment or being escorted to the payment register for payment.

Credits and Refunds-at AOS, we watch credits and refunds like a hawk. When we reconcile night audit reports, credits and or refunds are an automatic red flag. We look at the bookings associated with the credit or refund and we make sure there are legitimate reasons whey these occurred.

Storage-It is very easy to have RV’s, boat trailers, and the like in your storage unit and not even know they are there. We ask our parks to run a storage audit once a month-listing the number of units in the storage lot, the make, model, tag number and then compare it against guests who are being charged for storage.

Extra Charges and Fees-for a park that charges for extra people, vehicles, and pets, this can be a gold mine. At one of my parks, we swept the park twice a day looking for these offenders. If a site registered (2) guests, but there were (6)chairs around the fire ring-chances are-we had missing revenue. At a busy park with hundreds of sites, a sweep through the park looking for unregistered guests, vehicles or pets can net several hundred dollars.

These are just a few ways to tighten your belt, close the loopholes, and gain some much needed revenue.

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Seeing Into The Future

I am not prophetic, and I hold no mystical powers. However, my team and I stay up to date on industry news, trends, and market analysis. Thus, I have been saying for years-stop rolling out the “You’re Not Welcome Carpet,” to younger travelers and families with kids. Some have listened; some have not.

This week, WSJ put out an interesting article dealing with the over production by the manufacturers. Hidden within that article were the following statements:

The recreational-vehicle sector has been highly cyclical, but recently ‘glamping’ has brought in younger buyers. A Jackson Center, Ohio, production plant for Thor Industries’ Airstreams. PHOTO: ANDREW SPEAR FOR THE WALL STREET JOURNAL

BySpencer JakabDec. 13, 2019 5:30 am ET

“—younger, more diverse buyers have embraced glamping and #vanlife in the past decade, helping to boost interest in RVs—especially lightweight, towable models.:

‘Once inventories are back to normal, the industry’s marketing dreams could play out. A recent report by Kampgrounds of America shows an ongoing demographic shift. Between 2015 and 2018, for example, the share of households new to camping who were Hispanic doubled and the overall share of nonwhite households new to camping rose to 51% from 40%. The share of campers with children rose to 52% in 2018 from 35% in 2012. Campers who prefer the comfort of an RV or a cabin over a tent rose to nearly half from one-third between 2015 and 2018, says KOA.’

In a blog post earlier this year-and at my 2019 Glamping Conference Speech-I highlighted the importance of these changing trends. We went a step further and shared “Man on the Street” video interviews we had done with younger travelers and got a glimpse into glamping/camping adventures.

While manufacturers overproduced in order to meet demand, they did so at the peak of sales-and now inventory must find balance again. This is expected to happen in 2020-with again more intense focus on the glamping sector and younger buyers.

Stay put if you want-put the trends are changing and you and your park must be willing to change with them.

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What Not To Do Wednesday-Argue With Market Price

I am originally from the Eastern Shore-“The Delmarva Peninsula,” as we call it. This stands for the Delaware/Maryland/Virginia Peninsula. Delmarva is known for agriculture, amazing beaches and Maryland Blue Crabs! If you are from Delmarva-and Maryland specifically-you most likely LOVE crab and know how to pick them.

When you buy crabs at any time of year in Maryland, you are going to pay, “Market Rate.” There is no set price-the rate is based off daily supply and demand. Marylanders know it, don’t argue with it, and if they want crabs, they pay it. If the crab industry gets this concept-why are we still so backward in the Outdoor Hospitality Space?

Too often, we hear owners say to us, “Our rate is too high; we are not worth this.” I remind them, the market is telling them otherwise. Their revenue is up and the market is paying the rate.  The market is telling them they will pay that rate and they are worth it.

They seem to be very scared to allow rate to be pushed. I say to them what I say to my staff…“Numbers don’t lie.” Numbers will tell us when the market has not been pushed enough or when it has been pushed to the limit. Yet, daily we have park staff or owners want to buck the market and go rouge.

I find this to be a battle unique to this industry. Never did we have Marriott micromanage our revenue managers. They cared about the rate and occupancy balance, and if these were working, they never drilled down into what we were charging or the occupancy percentages. They just wanted revenue managed.

Here at AOS we find it takes very savvy owners and investors to understand Revenue Management. Some are just never going to get it-and that is the struggle we see this industry when managing revenue. The familial relationships they form with their guests, and the contra-market thinking lead them to lose revenue every day because they are not willing to agree with the market and charge market rate. 

Take a lesson from the mighty crab industry, allow us to set your prices at market rate and make you money while doing it. By doing so, you will see overall revenue increase even if occupancy falls. This is the magic that happens when the market is heard.

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What Not To Do Wednesday-Focusing on Occupancy ALONE

As most of you know, almost our entire AOS management team came out of the hotel world. We were primarily associated with the Marriott Brand of hotels. It is here that our team and our revenue managers perfected their skills.

When revenue management is done properly, the balance between rate and occupancy results in maximum revenue generation for the owners. This is the goal of revenue management-NOT increased occupancy alone.

Case in point-a resort in our AOS portfolio. When looking at their November numbers, their occupancy is down 5% over last month, but revenue is up over $8000. In addition, this park does not pass electric on to their long term guests, thus they are what I call, “Double Dipping.” They are up in revenue, down in electric expense, and all this at a lower occupancy.

Most often in this industry, owners do not understand this principle out of the gate. They panic when they see empty accommodations, but with a little education, they learn the rate occupancy balance is really what is ideal.

With AOS on your revenue, the overall picture is a balance that results in year over year growth in REVENUE-even if occupancy is down.

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The OTA Debate-Will The Outdoor Industry Ever Understand?

One of the most hotly debated topics at this year’s ARVC convention was over the use of OTA’s (Online Travel Agencies). Passion ran high on both sides of the debate-and often the facts were lost in the mix.

We at AOS are firm believers in using OTA’s as a revenue generation tool. Let’s put it this way-if power brands like Marriott and Holiday Inn believe they must be on the OTA’s to compete-then YOU must be on them to compete.

Take Air BnB for example. Statista 2019 shows that by year 2022 Air BB will have 46.5 Million users. Currently, they have 41.1 million. AOS parks on Air BB rent their roofed accommodations 85% of the time on Air BB or VRBO. This is 85% worth of business that they would likely not have if not for the OTA’s. This number is astonishing and not to be ignored.

Some of the typical arguments against OTA’s go something like this..

If we go on OTA’s we are competing with hotels and we cannot win.

False-If we can get a guest out of a hotel into a cabin with outdoor space, a yard, and a great experience, we rarely if ever lose them back to a hotel.

Campers do not use OTA’s.

False-As stated above, a vast majority of our cabins accommodations are booked on OTA’s. This is fact.

OTA’s create “Price Wars” between parks and should be avoided.

False-OTA’s allow you the ability to highlight your amenities and attractions to a market looking for experiences rather than stays. Connecting your park to OTA’s helps you reach that audience and show why you are better at offering an experience rather than just a bed.

Whether we like it or not, OTA’s are here to stay. If you do not get on them, your competitor will, and you will lose guests due to your reluctance to embrace change and move to where the industry has long been headed. We can stick our head in the sand, or we can move to the future and make money all along the way.

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Government Overload

Dreaming about your resort is such an enjoyable process. Looking forward to the guest engagement, planning activities, dreaming about the excursions, shopping for lodging units, and most of all, creating a revenue stream.

What is not so fun…the governmental processes involved in making your dream a reality.

One of the most important services we offer is the ability to walk our clients through the complex and lengthy governmental approval process. Early on in our growth, we hired some of the best minds when it comes to researching and parsing state, federal, and local code. Not only do we walk with them through this, but we also attend the hearings and meetings with them.

The questions to be answered are many. What are the setbacks I have to respect? What about sewer and water? Will the county allow my current road entrance or will they require an exit, a protected lane, or even a light at my expense?

Operationally, there can be even more questions Can I be open year round? What restrictions are in place that may prevent my guests from the full outdoor experience. Am I able to have food, beverage, campfires, or sports activities? What are the costs of the permits, easements, impact fees, or inspection fees associated with my project.

Getting to the bottom of these, and forming relationships with the people that matter, are what we do best. With former federal land use and BLM/Dept. of Interior staff, we know how to work with both sides to make everyone happy and get guests streaming into your resort.

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What Comes In Our Package??

When you sign up with AOS, you get the best of the best when it comes to Outdoor Hospitality experience. Of course, you already knew this!

What you may not know is that our Third Party Management clients have access to in house legal department. Our own J. Michael Hannon is available for our clients and all those sticky issues that come with running a resort.

Just this week, he has navigated clients through evictions, emotional service animal issues, HR related questions, staff background check concerns, and rent control provisions for long term guests. He also tackled FEMA and other regulatory quagmires.

When our regional managers need to get advice for their resorts, these managers can reach Mike and get sound legal counsel. He helps our team and our resorts avoid many of the legal pitfalls that come with having guests and employees. In today’s litigious society, this advice can save a park from needless defense costs.

Michael and his legal expertise is just one of the many services that keep AOS ahead of the competition.

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