2021 was a lot of things. The world was under the urge to shift gears constantly. Yet, it was a great year for recreational camping – the only certainty for many. As the outdoors started getting closed, people found solace in camping in their favorite destinations for a long time. Most of them bought an old vehicle, turned it around, and camped out in their favorite RV Parks.
Owning an RV park is a gateway to the great outdoors, a link to a big community of RV owners, and an entrance to the $9 billion industry. According to the U.S. Census Bureau data, one in eighteen Americans live in a mobile house or a trailer. This creates a niche market with a ready-to-target audience.
RV parks offer the perfect marriage of value and convenience. RV owners can rely on others to maintain the surroundings and improve the neighborhood. A properly maintained and managed RV park can be a satisfyingly tranquil lifestyle for residents and owners alike.
Benefits of Investing in RV Parks
There’s a strong argument for RV parks between their low maintenance and high returns.
1. Demand and Supply Conundrum
About 5.6% (17.7 million people) of the US population lives in RVs. While there are a lot of RV owners, there are not as many RV parks. The RV Industry Association’s August 2020 survey found that there were a total of 39,489 units of RV shipments in the month. It is an increase of 17.3% from 33,674 units the previous year.
Bookings across the EU and the US have skyrocketed by about 500%. Getaway, a company that offers socially distanced cabins, had a 260% increase in bookings in May and June.
While several people are buying RVs, there are not many RV parks on the market. There are 4124 RV parks and campgrounds in the United States. The top 5 states with maximum RV parks are California (561), Florida (255), Texas (195), New York (185), and Pennsylvania (160).
With the demand as high, and the supply as low, the opportunity is high for investors to create or expand their portfolios.
2. Longer stays. Lower Turnover.
Guests are staying 10% longer than before and bringing the entire family, including dogs. With the rising fuel costs, it costs RV owners thousands to shift from one park to another.
A few RV owners from the northern states in the US travel to RV parks almost anywhere in the south. These people are called ‘snowbirds’; they migrate to the south to avoid the dread of the northern winter.
Another popular reason for seasonal, long-term stays is workamping (work – generally camping at an RV park, resort, or as a tour guide in the area. While many workamping gigs include the site, some do not.
RV owners can rent out your space for longer periods than a week or 12 days, or even a month! Renters pay you every few days, week, or month as per agreed guidelines. In a few cases, the renters might also cover other expenses such as utility bills. It is essential to optimize your pricing strategy for mid-term to long-term stays.
Why are long-term renters a big yes in RV Parks?
1. Consistent Income
One of the key advantages of a long-term renter is knowing that you have a constant income. As an owner, the bills and other expenses will also cloud your pricing strategy. A continuous income can always help you get a head start.
2. Easier to Manage
A long-term rental will require much less time than a short-term rental. You would not have to spend a lot of time on marketing, taking care of many guests, taking care of maintenance, and more. You will have more time in your hand with consistent money in your pockets.
How to Find RV Parks?
The interest in camping is constantly increasing. As known, the demand is constantly growing with supply in need of attention. You need to understand where to invest your money for a quicker and higher Return on Investment (RoI).
1. It is important to get the ideal location
It is important to invest in a location that experiences good weather during the camping season. The location directly impacts your returns. You need to consider:
- The weather
- Events, festivals, etc in your locality
- Amenities in the park
- Availability of utility supplies such as water, electricity, etc
- Local taxes, rules, and regulations
RV parks that are located near water bodies would widen up your market. You could offer a lot of fun options such as water sliding, snorkeling tubing, jet skiing, and more. You should also understand how the market you are looking to invest in is performing. You can use PriceLabs Market Dashboard’s market data to pinpoint the profitable properties for you to invest in. You can use it to judge which listings are a good investment. Market dashboards are fully automated personalized dashboards that help you track vacation rental data anywhere in the world.
2. Create a Solid Foundation
It is important to conduct a thorough inspection of existing systems before investing in an RV park. Develop maintenance and inspection schedules. Your park’s sewer and electric systems will be under constant usage. In residential systems, washing and wastewater help sewer systems run properly. However, in RV parks, sewer systems need additional monitoring. You need to consider the expenses associated with maintaining your RV parks, such as utility costs, maintenance costs, amenity costs, cleaning costs, etc. It is important to understand if the locality you have chosen will be cheap or expensive.
3. Compare and Shortlist
After you’ve researched the market and the property, you would have a will of preferences. You need to go back to your notebook. Make a pros and cons list to compare and shortlist them. You need to understand if you like the property you want to invest in. After all, you would be spending a lot of time, money, and energy on the property. Your heart needs to be in it for you to be able to make it work.
How to Manage RV Parks?
While you have shortlisted your location, it is also important to set yourself up for success. Practice might not make perfect, but it does make progress. A successful hosting experience is only achieved by trial and error. You can connect with your peers and leaders of the industry in the various vacation rental industry events.
1. Manage amenities
You need to go beyond the typical. It is important to treat your guests with the utmost care if you want them to have a happy experience. Finding little ways in which you can enhance your guests’ experience will significantly benefit your business as well. Consider the following amenities:
- Designated pet areas
- Reliable internet service
- Beautiful landscaping
- A general store in the vicinity or in the park itself
- Parks and play areas for children
- Holiday events or social nights
- Activities (free and paid) in the park such as badminton, canoe rentals, excursions, etc.
- Game center in the park
You can use the Market Dashboard to analyze the amenities that the other RV parks are offering in your locality. You can find the most common and the most desired amenities in the area.
2. Go Beyond the Usual
Your guest experience has to go beyond the typical to ensure that they return to your property repeatedly. It is important to note that good customers today will turn into ambassadors for your RV park. You need to understand the various hosting tips and tricks to ensure you provide an exceptional service to your guests.
What can you do to improve their experience?
- Create signs throughout your park. Numerous posted signs can give your guests a sense of ease in the park. Keeps them to a minimum, and always include phrases like, ‘For the benefit of all guests………, please.’ The signs that you include in your park can be:
- Welcome signs
- Camp store sign
- Camp restroom sign
- Reserved parking signs
- Help signs (signs that provide helpline numbers or admin numbers to contact in case of emergency)
- Implement appropriate rules. You should create a working relationship with your guests. State the rules clearly and upfront. It is important to make sure that your guests are aware of the rules. You can implement rules such as:
- Quiet hours (decide the hours based on your locality)
- No leaks allowed
- Keep pets on a leash and pick up after them
- No Under-RV storage
- Park only in your designated space
- Create a manual for your property. A guide with as much detail as possible would save their time and effort. As an added bonus, it would also play a huge part in impressing your guests. You can add information about: The amenities you have on your property:
- The locality and the things to do there
- Any schedules or routines you want them to follow
- All instructions to have a safe, and fun stay on your property
Optimize your Pricing Strategy for RV Parks
Pricing is not a one-time deal. You have to constantly check and optimize it according to market trends, seasonality, etc.
Shorter stays, mid-term, and longer stays can’t all have the same nightly rates because the time and effort you are going to put into each of those stays will be different. Also, when a person is looking at booking your space for a month, they would naturally also be looking at a discount. You need to price yourself according to the type of stay, market demand, and seasonality.
PriceLabs dynamic pricing solutions can help you get pricing recommendations based on historical and current booking data, market supply and demand, seasonal and day-of-week trends, special events and holiday predictions, and the number of days left to book.
How to use PriceLabs to Inform your Pricing Strategy for RV Parks?
Revenue management for any form of a vacation rental is a tricky job. It is important to make sure that you leverage the benefit of technology. Let’s take a look at how the dynamic solutions of PriceLabs can help you in your pricing journey for your RV park.
The Multi-Calendar page allows you to view and set customizations and overrides, perform a manual sync or save and refresh your listings. You can perform most actions from the Review Prices and Manage Listings page for multiple listings at once.
With the Multi-Calendar feature, you can
- You can edit all your listing-level customizations, and edit date-specific overrides.
- Assign and/or edit groups
- Analyze occupancy for 15/30/60 days
- Set fixed prices for upcoming dates
- Adjust recommended prices up or down by a %
- Set minimum and maximum prices for holidays and events
- Require longer / shorter stays for specific date ranges
- Map listings
- Perform bulk actions like ‘Save & Refresh’, ‘Sync Now’, and tags
Minimum Length of Stay Restrictions
As we already know, people usually prefer longer stays in RV parks. You can set minimum night restrictions to manage their bookings for different seasons and booking windows. These restrictions are instituted to increase your vacation rental’s occupancy rate. It is important to understand your guests’ booking patterns to instate length of stay restrictions properly. Let’s look at a few scenarios:
- If you are a destination that receives many weekend bookings in a few days, you may want to restrict bookings to a three-night minimum length of stay. If you don’t, you might end up with a booking that might make getting a weekend booking difficult.
- If you haven’t received a booking for the weekend, you can drop these restrictions to a two or one-day minimum length of stay.
- Suppose the market has a 3-day minimum night restriction, and you have a 5-day minimum night restriction. You will lose out on visibility in online search engines because the market demand is for 3-day stays, which you have opted out of. You will, in turn, not receive many bookings.
You need to understand the market properly and your guests’ booking patterns to profit from these customizations. A simple guide to minimum length of stay restrictions would help you understand the feature better.
Our MinStay Recommendation Engine helps you maximize revenue by suggesting the best minimum stay restrictions for your properties. You might want to adjust your minimum stay restrictions to maximize revenue and for some operational reasons. For example, after a guest checks out, you might need a day without booking to be able to prepare for the next guest’s stay to ensure a good experience.
You can easily edit these recommendations so that it fits in with your unique requirements.
Portfolio Occupancy Based Adjustments (POBA)
With Portfolio Occupancy Based Adjustments, you will be able to set certain price adjustments based on the average occupancy of groups of listings with different time windows. For example, say in your portfolio, if one listing has an occupancy of only 35% for a given day, then a 25% discount would be applied to increase occupancy. At the same time, sometime later in the week, if your occupancy is higher than the market average, then your prices would be increased a little.
It is important to understand how to set up portfolio occupancy-based adjustments to make sure you are optimizing your pricing according to changes in booking patterns, seasonality, and demand.
Demand Factor and Seasonality
There are various factors that impact our price recommendations. One of them is daily demand trends. These are things that change from one stay to another depending on the demand for a certain stay date. These fluctuations could be because of holidays, events, days of the week, etc.
There are two other factors that impact price recommendations:
- Broad trends that change drastically from one stay date to the other such as base price, seasonality, etc.
- Lead-time-based trends change the price depending on how far-out the booking date is. These can be minimum-night restrictions, last-minute restrictions, far-out premiums, etc.
We give the baton to you, for you to fine-tune the variations you require at your prices according to market trends and your expertise for the big holidays, festivals, events, and/or special occasions. You can achieve this by using the demand factor aggressiveness feature in our dashboard.
Seasonality is an important thing to consider. For example, during camping season, your property is going to be filled up immediately. However, the same might not be the case in other seasons.
Seasonality is the cyclical variance in demand throughout the year. This is unique to each market. For example, every winter ski towns experience high demand and low demand every summer. It is a predictable, regular cycle that every market experience over the course of a year.
Portfolio Analytics and Market Dashboard
With Portfolio Analytics, property managers have a real-time reporting system that surfaces high-level metrics about the business, such as monthly revenue or length of stay information. Executives will find the reporting helpful to get a quick snapshot of their business!
Portfolio Analytics further exposes listing level performance and metrics, using which property managers can make informed decisions when setting up rate strategy. Want to go a step further and compare your performance against the market? Well, now you can. Portfolio Analytics provides an easy way to compare your prices and occupancy trends against data from a Market Dashboard.
For example, you can look at your listed rates and occupancy for future dates and overlay it with the same data from a Market Dashboard to easily identify where your prices stand against the market and how your occupancy relates to the market!
Even if you don’t compare against market data, this can help you easily spot if there are dates that are under/overperforming and may need any pricing adjustments.
Like any other vacation rental, owning an RV park also is a lot of work. It is important to understand the depth of the waters before taking a deep dive. The market for RV parks is in high demand right now with very little supply. While it is a lucrative opportunity, it is important to leverage it properly to gain from it properly financially.