A Glamping We Will Go

We are over the moon with our latest, “Camping to Glamping,” upgrades in Colorado.

We took tiny little rustic cabins, and turned them into luxurious, upgraded glamping cabins.

Here are our before and afters:

Before the AOS Touch
After the AOS touch
After the AOS Touch

For little money per cabin, the ADR has increased and the guest experience elevated! Thanks to great owners who lets us do our thing!

Little touches like upgraded mattresses, hotel sheets, duvets, and COFFEE make for a pleasant stay to match any local hotel. Outdoor cooking, a porch on the river, a fully stocked camp store, and pizza restaurant give these guests all they could want and more!

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What a Difference Some Days Make: Variable MLOS Targets

2022 budgets are in the books! We are now excited to rock this coming year and make it happen for our client parks!!

While reviewing OTB numbers for 2022 (On the Books) we noticed a great trend-one we implemented this year for next. Namely, our variable MLOS requirements for high demand parks.

The data tells the tale:

We inherited this park in May 2021 and most of the years bookings had been placed.

Average Length of Stay was 2.72 nights in 2021.

With targeted MLOS rules, AOS more than doubled thus number with our 2022 ALOS at just shy of 7 nights. See below

2021 Average Length of Stay
2022 Average Length of Stay

Our Average Length of Stay went from less than 3 nights to almost 7 nights!!! These results happen when our revenue managers, GM’s, and Regionals work together to manipulate days, rates, and policies. Trends will dictate when to drop our MLOS to 3 nights, but for now, we are BOOKING!!

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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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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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“Experience is One Thing You Can’t Get For Nothing” Oscar Wilde

Being Irish, I oft quote Oscar Wilde, and Wilde is most often correct.

Having been in this industry for so long, experience is one thing that comes with being a bit “Long in the Tooth.” Thus, I am always thrilled to be able speak and share what I know with others.

I am excited to announce several upcoming speaking engagements. In January we will be joining Camp Con and the virtual show with the Canadian Campground Association. We have been working with our neighbors to the north for quite some time and we are thrilled to be speaking via virtual conference.

Secondly, we are pleased to be speaking LIVE at the CARVC (Carolina Association of RV Park and Campgrounds) in February. Being back in front of a live audience will be a welcome change to all the Zoom conferences.

Finally, we have started meeting with our friends in the UK and Europe to attend and speak at some of their upcoming Glamping shows. Having family in Ireland, and having fallen in love with Europe, I am excited about the opportunities to work with industry professionals in these countries.

If you know me, you know I adore speaking and meeting with the incredibly interesting people that make up the world of Outdoor Hospitality. Here’s hoping 2021 brings us the medical advances we need to be together early and often.

Check out the shows and events listed above and make sure you register to learn from industry leaders in this space!

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Taking The Easy Way Out

In the course of a week, I read a lot industry news and blogs.

This past week, I was reading a thread regarding reservation systems. Different people were commenting on the ones they like, and a reoccuring theme on one was it is, “Easy.” I would never target a particular system, but I will say, “Easy is not always better.”

Yes, a system should be easy to use, but the problem is, the easier systems often come with less functionality. Therefore, things backend functionality often suffers for the sake of ease of front of house use.

There are numerous systems in the market that provide both ease of booking and robust back end functionality. Pay attention the the following when checking out a system:

  • Reporting-is it solid, does it do both cash and accrual accounting, and is it easy to read on screen and by day, week, month and year
  • Rate Yielding- it easy to manipulate rate based on supply and demand
  • OTA Connectivity (especially if you have Cabins)-does it connect to Air BB, Booking.com and Expedia
  • Online booking-does it do online booking and what is the cost per online reservation
  • Does it allow you to option to book by site type rather than specific site
  • Does it allow you to use your credit card provider of choice, or does it force you to use their provider
  • How easy is it to do group and split bookings

These are just a few of the criteria you should consider when choosing a reservation system. Most are pretty easy up front and booking a site is simple, pay attention to group and split booking functions. Some are better than others.

AOS is NOT a software developer. We look at all systems and we recommend what is best for the client. We know all systems in the market and have worked on almost all of them. Trust us when we say, “Easy is not always better.”

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Buy Cheap Get Cheap

If you know me, you know I love Shark Tank. I especially enjoy Kevin O’Leary. If you watch the show, he always wants to know two things: 1. How did you come to your valuation 2. What is your cost of customer acquisition?

Question #2 infers you are spending money to get your customers. If there is one thing you must understand in marketing, you must spend money to gain customers and get exposure.

“According to the U.S. Small Business Administration, they’ve suggested 7% to 8% of your gross revenue should be spent on marketing. 50% of that marketing budget should be dedicated to digital marketing in 2019. … The average company is spending 35% of their marketing budget on digital campaigns, and that’s not enough.”

SBA January 2020 Report

We are always amazed at parks who are unwilling to spend money on marketing, but expect to be at the top of Google Searches and in everyone’s social media feeds. It just DOES NOT work that way. You must buy your way into the searches and the feeds in order for your ads to be effective. You must have the proper SEO and realize that in markets where many parks are vying for the same keywords, only by paying attention to your marketing and making the right moves and spending the right dollars are you able to achieve your goals.

On average you will see an average of $4 for every $1 spent on digital advertising. This is a good rule of thumb when you determine if your digital marketing spends are working. The good news is, with today’s technology, it is easy to track what is working, where you are getting the most ROI, and adjust accordingly.

Digital advertising is how here to stay and making the most of it by budgeting for it is the most efficient and effective way to get your park on the map.

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Road Trip Ramblings

This week, I took my first road trip in three months. My clients have been chomping at the bit to go look at parks, so we donned our masks and hit the road. We drove, flew, walked, hiked, camped, and met a pot belly pig who may become a mascot.

I often have long rides between parks with my clients. This allows some wonderful interaction and the ability to bounce thoughts off each other. This week, my client kept saying to me, “You need to write about this and you need to write about that.” This trip he was very adamant on advising buyers how to look at a sellers books.

When someone is selling a park, the adventure has just begun. All of the time, you need to make adjustments to their books. Often times, their books do not reveal what is truly happening.

The reasons are many and varied. Sometimes all their personal expenses are being paid by the park. Sometimes family members are on payroll even if they do very little at the park. Almost always, the owners do not pay themselves on payroll, so replacing their salaries must factor in to what a new owner will be realizing in expenses.

One of the most overlooked items is Goodwill. How will the owners departure effect occupancy? When the owners are tired, worn out and grumpy- a change can result in increased occupancy. However, when the owner or owner(s) are one of THE reasons guests come to a park, change in ownership can have a tremendous influence on current guests and it may take a year or two to overcome the change. Reviews will often tell you if the change is going to be positive or negative in the guests eyes.

Finally, is the park operating in a way that the market demands – or are the owners fighting the market? Most often we see this when a park is screaming to be a transient park, but owners prefer the operational ease of long term guests. Conversely, we have had owners demand to be short term family parks when the market was telling them long term guests would fill their park and generate substantial revenue.

Also, verify the inventory that comes with the purchase. Nothing can be more of a surprise than to show up at your newly purchased park, and the $100,000 worth of equipment you thought came with the park now has to be replaced. That is an immediate kick in the pants and is easily avoided with careful contracts and planning.

All of the above are careful considerations when buying an existing park. One of the reasons I travel with my clients is to review the tangibles and intangibles and to get “Boots on the Ground,” in order to make wise decisions. We can do a trip and look and ten parks and maybe only buy one, but the travel is worth the reward when the right site, at the right price, at the right time is finally chosen.

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“Thank You,” Will Never Be Enough

Several years ago my husband and I took some sabbatical leave and toured Europe by train. We were there for over a month. We started in Germany and ended in Normandy. It was, in our words, our “World War II Tribute Tour”

To say Normandy was sobering and awe inspiring is a feeble attempt to try to describe what is indescribable.

We walked the beaches, touched the german fortifications, admired the memorials, and held our breath as we visited the American Cemetery. There we walked for hours, not speaking, but admiring the tribute raised to those who stormed those beaches and changed the world forever.

One of the most touches moments was watching the French gardeners tend to the grass around the crosses. No motorized equipment was permitted around the crosses-all grass hand to be clipped by hand.

You can never visit such a place without being changed forever. This Memorial Day, we will once again take time to honor those who served and paid the ultimate price. We are forever, a grateful people.

Happy Memorial Day!

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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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