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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A Very Merry Christmas to All

We at AOS want to take the time to wish each and every one of you a blessed and Merry Christmas!

In the day in and day out hustle and bustle of the year, we fail to mention how much we appreciate the trust that you have placed in us and our team members. We understand how hard you have worked to make your resorts a success, and we want you to know this is not lost on us. We take this seriously and large or small-we treat your parks as if they were our own.

We look forward to continuing to serve you in 2020 to make it a prosperous and successful year.

Wishing you a very Merry Christmas and the happiest of New Years.

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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-Trust and Not Verify

Ronald Regan had a wonderful saying, “Trust but Verify.” This is the motto he lived by when dealing with Cold War Russia. It was a motto that led to the eventual fall of communism across the globe.

This is a motto we live by when dealing with the finances at our AOS managed parks. We trust our park’s staff, but we verify they are doing things correctly.

This week we are helping a client who is buying two parks. At both parks, the owners suffered at the hands of staff embezzlement.

Since we watch our clients numbers daily, we catch “odd” behaviors-sadly, many parks do not catch nefarious activity until is it way too late.

When we came upon our second park in one week with this issue, I said to my team, “How does this happen?”

One of my staff quickly replied, “They do not run their parks like a business, but rather as some sort of social club.” She could not have been more correct.

The owners of both parks mentioned above looked upon their staff as, “Family,” and never reviewed the books each day. This is where AOS takes a different approach. We immediately catch things like ongoing refunds, management credits, and excessive number of cancellations. When we notice oddities, we dig deep to discover the details and verify the legitimacy of the action. This is paramount to running a well oiled machine.

Most owners do not have time to look over the staff’s shoulders. They are too busy running their business to run their business. 3rd party mangement companies have the time to dig deep, and pay for themselves by catching such errors or ommissions.

Whether you run your park, or hire 3rd party management-make sure you look at your number daily!

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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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What Not To Do Wednesday-Fear Based Decision Making

Whether it be keeping employees who should have been gone long ago, catering to guests who are sub-standard and wreaking havoc on your park, or spending money that needs to be spent in order to increase revenue, we see fear based decisions not only keeping parks back, but often times running them and their revenue into the ground.

More than any other industry in which I have worked, the outdoor hospitality world runs off emotion. I think most of it comes from something that seems very endearing-the blurring of the lines between business relationships and familial ones.

Because the industry is so tight knit, guests tend to become like family, and many park owners are afraid to make business based decisions in fear of hurt feelings or broken relationships. This seems to be admirable, and it can be, but if it gets in the way of running a solid business or a successful park, park owners could end up struggling and unable to run what should be a profitable business.

The same holds true with employees. At AOS, we have been nothing short of amazed when owners have been reluctant to counsel or release employees who are doing real damage to the park. Sometimes, it is as bad as embezzlement, and yet, fear of damaging a relationship prevents them from wanting to move forward with removing the staff member.

Finally-not spending money that needs to be spent is one of the biggest fear based decisions we see owners make. The old saying, “You have to spend money to make money,” is true. Subpar marketing, old and ineffective websites, bad photos, and a lack of attention to rate are just a few of the places where owners struggle to see the value in spending money. When you spend money on good, solid marketing, and pay attention to managing your revenue, the money spent is going to return several times over. In this digital age when everyone can and will shop online, these are funds you cannot ignore when developing a budget.

Cutting corners in today’s market is going to cost you. There are too many savvy shoppers out there-and if you are not reaching them and making good decisions with your money, your guests, and your employees, it will come back to bite you.

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Words Matter

Today’s “What Not To Do Wednesday,” comes from a recent trip out of the Tampa Airport. It was way too early for any reasonable person to be flying, but in the midst of my morning fog, I caught a glimpse of this sign:

Who Ever Remembers Who Came In 4th????

I am sure this ad campaign cost a pretty penny, and yet the wording is all wrong. How much better would it have been to say, “One of the Top Beaches in the US as ranked by TripAdvisor,” or maybe, “Consistently ranked a Top Ten Beach in the US.”

Number 4, YAWN!!

St. Pete Beach is nice, and Tampa is a great town, but this ad campaign is not working for them. Remember, in your marketing-words matter. Not only do they matter front facing, but they also matter on the back end of your digital marketing. As your mother always told you, “Choose your words carefully!”

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