Economics 101

February 21, 2018

We travel around the country working with parks to set their rates, analyze their competitive sets, and manage dynamic pricing. Some of the comments we hear most often are:

I am afraid my guests will get angry.

What am I going to do when they talk to one another and find out they paid different rates?

I am afraid my long time guests will leave and my occupancy will suffer?

These are all interesting questions and/or comments. They are also valid concerns. However, when done properly, rarely do these fears ever come to fruition.  If you have ever been on an airplane, stayed in a hotel, or booked a vacation rental, you understand rate yielding and the principle of Supply and Demand. The sooner you book and the greater the availability, the lower the rate. The closer to checkin or limited supply means a higher price.

Recently, one of our very rural parks experienced an influx of phone calls regarding long term stays. As we investigated the reason, we discovered a boom in the construction industry around their resort. We immediately bumped their rates. When they were getting $350 a month for a monthly guest, they are now getting over $450 plus electric. Are the guests mad? Quite the contrary! They are pleased to have been able to find a clean, well run park, at a rate that is competitive, yet priced according to the demand.

AOS and our highly experienced team can help our parks keep their fingers on the pulse of Supply and Demand and help yield rates accordingly. If not done, you will find yourself with either an empty or sold out park-and not making nearly the money you could have made if the simple economics of Supply and Demand were applied.