Part 2 of our special message to park operators. Following on part 1 (click here to read) we argue that the time has never been better for you to raise your rates. In this part 2 we discuss another tactic you can take if you fear raising your rates and the impact it may have on your long term customers.
- If you do not want to raise rates at a minimum consider ditching across the board discount programs (ie Good Sam).
- Your customer DO NOT CARE if you belong to Good Sam… they only care about saving money.
- Use discounts to your advantage… take them when they help you.
- Campers are noticing the crowded parks and want to bid for sites = create a demand based pricing schedule.
Your Guests Don’t Care About Your Memberships
If after reading part 1 in this exclusive series you still are against raising your rates let me throw another idea at you that does not involve raising your rates at all… get rid of your membership discounts. For all the operators reading this who pay the extraordinary fee to Good Sam for the privilege of giving your guests 10% off (that comes straight out of your pocket by the way) stop doing it! Your guests do not care if you belong to Good Sam. Let me repeat this because so many operators still don’t get it… your guests do not care if you belong to Good Sam (in fact a large portion of them are actively boycotting anything to do with the brand).
This one is a dogma of the industry that simply has no modern need. It used to be that aligning yourself with Good Sam or AAA got you better placement in their “books” for this placement you had to provide their card carrying members with a 10% discount (it was a win-win). There was a time when those “books” were the bible of RV travelers… that time has long since passed. Do you really think people go out of their way to stay at your park because you accept Good Sam, have their flag on your pole and plaster their logos all over your office? If you do let me be blunt.. campers don’t care!
Still don’t believe this? Go ahead and ask your guests. The next ten guests that book at your park ask them this question “Do you care if we are members of the Good Sam program?” If they say “Yes” ask them if they care because “it saves them 10% or because they think Good Sam means quality?” You will find that I am absolutely right on this… they don’t care as long as they get 10% off! Consider that for a second; these guests simply care about 10% off their nightly rate. What is stopping you from not paying Good Sam a dime and still offering 10% off to their members? How about AAA they don’t even have an RV directory anymore! You can make the choice to give discounts based upon YOUR NEEDS.
Be Smart with Discounts and Increase Your Income
Instead of giving everyone all the time a 10% off discount be smart with your acceptance of the programs. You can easily piggyback off regional deal programs, locations of guests and other factors to give discounts that actually create interest in your park. If you run a snow-bird park and want to increase occupancy in early November run a special offering anyone with a Canadian Passport 15% off a monthly stay. If your park is a weekend destination put together a plan to offer a “senior discount” of 10% off your mid-week rate.
The point is that offering discounts should only be used to create demand during down periods. Passport America is an excellent program for driving guests out of their way and in to your park. In exchange you give up half your nightly rate for the pleasure! This program can be an excellent tool when used appropriately with appropriately being the operative term… set your rules intelligently. If your park is located in a non-prime area or subject to heavy seasonality you can use the program to bring in half price guests (who will literally re-route through your area to get the cheap rate).
There is a perfect example of the power of Passport America demonstrated by the former Desert Pools location now known as Palms Springs Joshua Tree KOA. The manager utilized Passport America to increase occupancy in the off-season, raising the value of the property and enticing new owners to purchase and further upgrade the property. Real value was added by smartly using discount incentives when they were most needed.
You can decide at anytime to accept Good Sam, Passport America, AAA, Discover Card, Florida Drivers License, a blank piece of paper, etc etc. As a private business owner, as long as you follow local laws and do not discriminate, you can offer discounts for anything! A clear sign you are doing discounts wrong is if the potential guests don’t ask about your discount availability upfront. If instead the conversation goes like this:
You: “Your rate will be $105.96 for the 3 days how do you want to pay?”
Them: “Oh do you take Good Sam or AAA?”
You: “Yes we do your rate is now $95.36”
Then you are literally throwing money away. If it was so important to the guests that you are a proud member of Good Sam they would have asked immediately upfront if you accept Good Sam. They don’t ever ask this. Their questions are usually do you have a pull thru site available that can handle a 42′ RV and tow vehicle. Is your laundry open till 8PM. What time can I check-in? etc etc.
Please Raise Your Rates
Yes this headline does beg you to please raise your rates… with a caveat. Don’t just raise your rates 25% across the board for everyone all the time. Doing this could be detrimental to your park. Create a demand based pricing structure with higher rates during busier times and lower rates during non-busy times. You can then tie in smart discount promotions to increase demand during slower seasons and days. This all seems pretty complicated except when you realize that you already do it with daily, weekly and monthly rates. It is not uncommon for parks to have $50 per night daily rates, $40 per night weekly rates, and $25 per night monthly rates… this is a demand based pricing schedule! You can easily refine it to make more money and better maintain your occupancy rates.
What we are hearing from campers is that they unknowingly are asking for this too. There have been recent editorials in major consumer focused publications (RVtravel.com for example) discussing the crowded parks and lack of options. Carrying that discussion further the lack of options is actually a lack of opportunity to bid for sites. The free market is what we aspire to and your customers will understand if you have higher rates during peak seasons and lower rates in off peak times.
One of the most successful RV park operations in the country is managed completely on a demand based pricing with an occupancy rate that would make any operator drool. Disney’s Fort Wilderness regularly charges anywhere from $75-$100+ per night. The company is very upfront with this pricing including a monthly calendar with their rate tables. If a guest wants to stay at their park they can likely get a site… but they will pay a premium for it. Why can’t you do this?
With the explosion of RV campers looking for places to stay there has never been a better time to increase your rates. By making adjustments to amenities or services you can easily raise your rates by 10-15% this year alone. If you are completely adverse to raising your rates then, at a minimum, reconsider how and why you offer membership discount deals. Use them to your advantage. Finally the market has changed and RVers have noticed the crowds and competition; free market ideals win-out in these situations with demand based pricing helping to even out the flow of customers.
As a RVer I am not super excited about the prospect of paying more to stay at your park but as has been demonstrated here all of the evidence supports the move. Which route will you take? Let us know in the comments below or join the exclusive private group to discuss with your peers (click here).
Note from author: In the interests of transparency I will admit that the advice in this article goes against my personal wishes. As a camper myself I enjoy taking advantage of inexpensive rates at parks that should be charging a lot more… sorry it is true… but the time has come for park owners and managers to raise your rates. Not just for your bottom line but also for the experience of campers too.
Did you miss the first part of this series? Click here to read part 1 of this exclusive series to learn how to increase your income without raising your rates.
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