Read the tabulated responses to this article from guests or park operators
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.
What do you think of the above? Leave your comment by logging in below.
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.
5 years ago when we bought our park it was a Good Sam park. After the first year I couldn’t justify pay $6000+ to give discounts. We did it ourselves and tiered it to second, third, fourth, etc visits in the same year. We had 6 families come more than 7 times last year. 3 became seasonal guests. 2 more are thinking about it. The $6,000 per year now goes into the facilities and playground, -extremely nice bathhouse, new jump pad, pirate ship, revolutionary spinner. And we do raise our rates 4% every year and some of that gets pumped into activities. We provide the candy bars, the kids don’t need to anymore. When they did it was 90% Hersey bars. BORING.
Thank you for the comment and helping to provide support for the claims made in the article.
Good article and you bring up a lot of good points. We are on the fence about renewing our Good Sam membership. They are inconsistent with their rating procedures and the CEO’s political remarks have no place in the camping industry in that he does not want business from those who do not agree with his political beliefs. This is not only unprofessional but not a good reflection on Good Sam, regardless of ones views. Keep politics out of our industry!
Regarding increasing rates, I disagree with Sportygirl_2008 in that people who enjoy camping want the outdoor experience and will not give up their RVs to stay in hotels. Our situation is that our “competition” is the government (Army Corp.of Engineers campgrounds). They seldom
increase their rates and keep using our tax dollars to pave their roads, update campsites, etc.
Perhaps if the government would stop spending taxpayers money on such costly and unnecessary improvements, those funds could be used for things like road improvements, etc.
Our park does offer more for campers to do as well as better security, so we have found that these are important to families looking to camp with their children.
Thank you for the excellent comment. In regard to competing against the government this is a major business issue for the majority of private park owners and is of great concern to all of them. Here is how I look at the topic… A private park owner can never directly compete against public parks for guests. The guests that will stay at public parks will most likely never consider staying at a private park (in a way similar to the campers that stay at Walmarts… you can’t compete with free).
As you note your park offers more amenities and better security both are very good points. Private parks also, in general, provide these benefits: sewer, laundry, wifi, access for larger RVs, less silly rules (this is actually a big one), less “novice” camping neighbors and weekend warriors out to party.
In regard to increasing your rates it can be hard to justify when your public competitor is so cheap. Suggestions to compensate include running specialty weekends, fishing tourneys, maybe even a special boat detailing and storage area (something the COE park will flat out ban). You could even accept the National Park Access Pass as a discount to your park!
Great articles and thanks for sending the email notifying us of them. We have been on the fence about getting away from Good Sam for a while. We pay for advertising on their website and they do drive traffic in to ours but when we looked at the numbers the cost per click (learned about this at ARVC last year) is a lot higher than it should be. I really like your advise in part 2 and we will look at how and why we are using the discount programs. Your example conversation happens all the time!
For sportygirl I understand what you are saying if you are assuming the prices will be going up significantly. On our end we are looking to raise our daily rate by 5% now and then again 5% in 6 months. That comes to $1.50 each increase. As Mark questioned will that really kick you over the edge in to staying at hotels? Have you priced hotels recently? The one down the street is now no less than $75 per night. On peak weekends they go up to almost $150 per night!
Thank you for the comment.
Go ahead and raise the rates then you will force people to quit taking Rv’s and just stay in a hotel… By the time you pull it and gas your not saving much less have the rates go up…
I get the gist of your comment but please support it with some facts that counter our evidence. Overall your comments are counter productive to civilized discourse. Please be specific. If a park raises their rates from $30 per night to $33 per night is that $3 difference going to stop you from visiting a location? What if that $3 increase was combined with the park installing a huge pool with slides and play areas? (and yes that $3 per night difference can easily support capital improvements like that.)
Great article and thanks for the email. Just emailed you our updated description. For our park we are very proactive on price increases. Have been raising the rates a $1 or $2 every few months with zero push back from customers. We are careful not to bump the monthly and seasonal rates more than once per year for the exact reasons you laid out.
Thanks for the interesting take. My husband and I have been going back and forth on this topic for years. Our rates have remained set at $32 per night for the last 4 years. Last year we were full every weekend and most weekdays. It has been wonderful but a lot more work. Thank you for this. Now it is not just me telling him we need to increase our rates.