Lemons Into Lemonade

As of today, the whole world seems to be on lockdown. Schools closed, workers sent home to work virtually, and events cancelled across the globe.

While traditional hospitality is hardest hit, Outdoor Hospitality faces a golden-or shall we say-lemon yellow opportunity.

This article out of Japan tells us exactly what is happening to Outdoor Hospitality in that country post WuFlu.

In this environment, the industry there is thriving. People want to get out, and they want to be in wide open and “Socially Disconnected” spaces. RV parks , glamping resorts and campgrounds are the perfect solution to meet their needs.

Unique situations call for creative solutions. Making sure our common area and cabins are cleaned with bleach, having hand sanitizers at our desks, and postponing close contact events until a later time help ensure we are open and welcoming, but remain vigilant.

At AOS, our team has jumped on this early and have started to reach out to all those cancelling foreign vacations and welcoming them to our unique spaces. With the great outdoors calling and spring weather at hand, the great outdoors is the greatest way to experience -“Life not Cancelled.”

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Penny Wise and Dollar Foolish

One of the services we have been busy with in 2020 is research and writing Marketing and Feasibility reports.  So Far in 2020, we have completed or are working on no less than twelve reports.

Wise investors know money spent on such reports can save them from making horrible financial decisions and can save millions in investment or cap ex dollars. Investors excited about a property have been met with a “Hard No, or a “Hold Off,” from us once the research is complete.

One of the elements of our research is to look at the competitive set and chart their strengths and weaknesses against our subject property.

While doing my study this week, I came across the perfect example of this blog’s title. “Penny Wise and Pound Foolish.”

Our subject park is in an area where most parks are sub-par in nature. Deferred maintenance, a lack of professional staff, and tired amenities abound

However, there is one glaring exception. Recently, a beautiful new park opened about 20 minutes away from our subject property. It is well amenitized, spacious, and my construction background tells me the all in costs were in the 20M dollar range.

As I studied the area, it took me a little time to find their beautiful website. They have made almost no effort to debut themselves in the digital space.  There seems with little to no marketing efforts on their part. When I searched the main keywords they should have been using, they were halfway down Google page one, with no pay per click campaigns or ad words bringing them onto potential guests radar. They were, as I like to say, “All Dressed Up and Going Nowhere.”

For a like kind AOS park-we would have built an appealing Wordpress site and then super charged the back end. We would have spent money to get them noticed on Google, built out the SEO, researched and managed the keywords, and maximized their digital presence. This park, which cost millions to build, seems to be either unwilling or uneducated on how to spend the few dollars it would take to get them noticed and get guests parking in their park. So they are sitting there on a multi-million dollar investment and guests would have to scroll to the bottom of a Google page to find them. I can tell you confidently, that is NOT going to happen.

Americans like instant gratification. We want quick, convenient and easy. We are not going to go to the bottom of Google to find what we want. If it does not smack us in the face, we move on.

When buying, building, or running your park-do not forget to pay attention to the pennies that will eventually make you dollars. A few well placed marketing dollars can turn into bottom line revenue and happy guests in your park.

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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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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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Upping our Game-Exciting New AOS Offerings

AOS is always on the lookout for ways to enhance our properties and our processes.

In light of this, we have some exciting new offerings for our clients.

Accounting is one of our strengths and we have switched accounting software to better serve our clients needs. We are moving to a platform that allows for more precise budgeting, ability to upload actual photos of invoices, and streamlined cloud based access. This allows any and all clients to not only know their invoices are paid, but actually login to see copies of the invoices and checks.

We have added FAA drone certification and CADD renderings to our in house services. Here are just a few examples of our marketing departments work. These renderings are invaluable when marketing a new build or presenting to governmental entities.

Amenities Area
Yurt Village

Even more exciting for us is our new “AOS Pathways” program. AOS Pathways (Career Development) is a structured, collaborative time for those employees who wish to develop their professional skills in order to enhance their careers. There will be dedicated time with AOS staff work on the foundational skills needed to develop into a higher role. Managers can recommend one staff member per period to take part in the course. If you are interested you should let your manager know. They will let you know when the courses are available. 

Coaching Opportunities- We believe in paving the path for others to succeed. AOS will work with all managers to implement a coaching structure that encourages self reflection and improvement throughout the year, ultimately resulting in a higher performance by engaged employees. Performance- based evaluations are held once a year.  

We are always enhancing and adding services to serve you better. Hope to see you soon at both the Glamping Conference in Colorado and ARVC in Tennessee. Happy Friday!

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Millennials-A Hot Topic

The Millennial market is a hot topic in the Outdoor Hospitality industry. So much so, that we have been invited to speak to this at two separate conferences this fall.

As a mother to five of them, and a boss to many of them, I can tell you I have a great deal of respect for millennials. They are tech savvy, hard working, and up to date on current events.

We have also met and interviewed a great number of them who are either full time RV’ing or doing some serious traveling around the country. Some are single, some are married no kids, some are married and home schooling their kids, and others are extended vacationers who can work remotely. All are in love with the outdoor lifestyle and the many advantages of traveling light.

Most of these modern day vagabonds are college educated, make triple digit salaries, and work during their trips. They are adventure seeking and are more about the overall experience.

In the days and weeks to come, we will be sharing some video clips of interviews we have done with young RV’ers who want nothing more than to get out and stay at one of your parks. They come with enthusiasm, money to spend, and a list of things that are important to them. Stay tuned as we introduce you to your new Snowbird, Winter Texas, or Full Timer. You may be surprised at what you learn.

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Parting Is Such Sweet Sorrow..or Maybe Not

One of the hardest things I have had to learn in business is that not everyone is my client. In an ideal world, this would not be the case. But in the real world, sometimes the fit is just not right. The larger our portfolio, the more we realize who fits within our mission statement and who is not an AOS client.

The same goes with your guests. As hard as parks want to be all things to all people, there are times when it is in your best interest to pass on a guest.

Most of the time, this parting of the ways occurs over rate. If you have a five star park; you should be charging five star prices. You cannot, nor should you, price yourself to compete with the one and two star parks. If you allow guests to brow beat you-or guilt trip you- into cutting your rates-you decrease your value and invite a clientele that may not blend in with those who are more than willing to pay the higher price.

Another guest to pass on is the guest who will not abide by rules and regulations. We have always had a, “Three Strikes You’re Out,” at our AOS parks. Once we have warned you twice, the third time is the end. When a guest has ignored two warnings-chances of them changing are slim to none. No matter how long they have been coming, or how intimate the relationship, this type of guest is going to be a bad apple.

Finally, the guest you will never please-not matter how hard you try-is one that needs to be cut loose. I learned this very early on in my career. We had a guest book a waterfront cottage at $325 a night every single season. It was good money-but it was a nightmare. The whole week she was there the staff was on edge, the other guests heard the complaints, and we had passed on others who would have rented that same unit with less headache. After three seasons of this, we blacklisted this particular family and did not allow them to return. No matter how hard we tried, something was always wrong and we finally had to face the hard truth that we would never make this guest happy.

Passing on these guests will allow your park to operate a peak efficiency without the distractions these above guests can bring. It is hard to say no to a paying guest, but sometimes parting with them is that way to turn that corner to a more rewarding park operation.

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Road Trip Revelations-Autumn Lake RV, Calvert AL

I often comment that I learn as much from my clients as they learn from me. This week’s road trip stayed true to form.

This week I visited Autumn Lake RV- a cute little park in Alabama, built by Robin and Keith McLeod. This park is a gem in rural Alabama, close to numerous job sites which supply them with a steady stream of guests.

What is unusual about this park is that it does not look like a worker park. It looks like a clean, friendly, and spotless overnight park. No clutter anywhere to be found. It has back in, pull through, and cabin sites.

The McLeod’s have a great deal of pride in this park, and a quick tour shows you why. They have spent additional dollars to add some very nice touches to make the entire guest experience a more gratifying one. Though the untrained eye may not notice these touches, I noticed them right away!

The photo below shows an extra and important step they took when building their park. Most people do not know that the New Orleans/Mobile/Birmingham area of the country is one of the rainiest parts of the US. In order to keep folks from having standing water, Autumn Lake RV Park has installed drainage at EVERY site! It could rain 8 inches in an hour and your site will be dry! Every single site has been carefully graded to supply water to the individual drainage grates.

The hookup area is yet another example of small, but thoughtful detail. They went the extra mile (and expense) of pouring a concrete apron for all hookups. Guests need not leave the comfort of the patio in order to connect to any of the utilities on site. It makes for a very clean and uniform appearance to all sites. All pedestals and hookups are straight and stay that way having been set in concrete.

These are just a few of the small niceties that make this park a gem. Of course, Keith and Robin are the most valuable asset-and they would love to welcome anyone to see why!

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