Part 1 of our special message to park operators. It is time to raise your rates and here are the reasons why and how. The following article discusses:
- The time has never been better than now to raise your rates. You can increase revenue by 10-15% this year.
- Demand for RV and camp sites will continue to increase over the next several years.
- Making modest improvements to either your amenities or services can easily justify rate increases.
Continue reading for the details.
Huge Demand = Proper Time to Raise Rates
The time has never been more right for you to increase your rates. The camping and RV market is experiencing an unprecedented boom in modern times. Fed by the demand of the rapidly retiring baby boomers, virtual working professionals (and people who can extend their trips by working virtually), and a rapidly growing crowd of weekend warriors demand for your sites has never been greater. This wave of demand is the primary reason you should be raising your rates.
The RV industry is experiencing exponential growth. As testament to this we just returned from the California RV Show where we worked for the RVIA to help promote the event. What we experienced and witnessed was unprecedented demand and a level of RV sales that can only mean one thing… lots of campers. Going into this next season, unless something major changes between now and summer, I expect RV parks to see a 10 to 15% increase in demand for sites no matter where your park is located. If you do nothing at all you will earn more money simply because of the increased occupancy at your park but if you increase your rates intelligently you’ll see a marked improvement in your bottom line.
Getting Over that Hump and Taking Action
The biggest mistake many park operators make is operating under the assumption that because their rates have been this way for so long an increase will create a huge group of angry customers. The reality is that raising your rates will create a couple of angry customers… they will gripe and they will call and complain. Here is the great part of being a private business you get to ask yourself “do I like dealing with this customer and do I want them to continue to be a customer?”. If the answer is “Yes” then you can politely respond “we have been so overwhelmed with requests for sites we have been forced to increase our rates to make sure our loyal guests have sites to stay in. We will honor the lower rate for you this season and then talk to see what we can work out for next year.” If the answer is “No, I don’t like this guest they complain about everything” then you can apologize for the inconvenience and tell them this is what you need to do. Raising your prices will create a few complaints but it will be a few and it will vanish in the distance rapidly.
Increasing your camping rates can be hugely beneficial and you already have multiple examples of how and why. What I want you to think about is that nearby campground or RV park that changed from a non-branded park in to a KOA. Do you remember when they made that switch and immediately raised their prices by about 20% above their existing rates? Did you notice what happened to that park? Without even knowing which park it was I know that they’re occupancy went up by 25 to 30% that following year and their demand for sites extended beyond the normal season! Now here is the catch; when they made that switch they likely invested a little bit of money into improving their amenities and their site layouts. In the end, and this is demonstrated by the amazing amount of improvements being implemented at KOA branded parks, the additional income more than makes up for the cost.
I know KOA owners are reading this while nodding their heads in agreement because they know all that really changed was the experience and expectations of the clientele… and the customers happily paid the higher rates! By raising their rates they were forced to provide a level of service and amenities a bit better than they offered before; you can do this too. They did have to provide something of additional value, real or perceived, to make up for the cost difference. If you have taken the time to review the KOA franchise materials this is what they highlight and bring to the table… a system for making more money. That system is consistent branding, quality marketing, rules on customer service, park design and layouts, a system for customer feedback and improvements based upon the feedback.
You too can and should improve amenities or your service to justify and implement a rate increase for this season. Should you make the minor adjustments and increase your rates you will create a win-win for your guests and yourself. More money coming in off guests equals a higher value of your property allowing you to better leverage your park to improve even further. Eventually you will get in to a cycle of better amenities, higher occupancy and higher rates. This model has been implemented by many other park owners… you can do it too.
The time has never been more right for you to raise your rates. This first part of the exclusive series demonstrates that the demand is there and methods are available to do it. If you still don’t want to raise your rates read part 2 of this exclusive series by clicking here to learn how to increase your income without raising your rates.
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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.