Maybe Terramor should be Terrless?

When KOA decided it wanted to get into the luxury end of the campground business—goosed along, no doubt, by its survey findings that there are a lot of campers out there with too much money and not enough ways to spend it at a conventional RV park—the brand-happy brain trust in Billings, Montana, opted to spin off yet another name plate. Even “KOA Resort” must have seemed too plebian for something as grand as was being envisioned for this new venture. Something more lofty and cultured was needed.

So it was that KOA gave birth to the pseudo-Latinate “Terramor,” a designer mashup connoting “love of the earth.” And thus began a protracted exercise in unintended irony.

The first Terramor glampground was created a couple of years ago in Bar Harbor, Maine, on the grounds of the former Woodlands KOA. Problems ensued. Although highly rated overall in Google reviews, a surprisingly large number of negative reviews identified the same basic problems: too much road noise, a lack of parking at the luxury tents, gravel trails that made it hard to haul luggage from car to tent, tents crowded too close together, inadequate outdoor lighting—problems, in other words, that had to do with location and infrastructure limitations. Problems that might put a serious dent in any return business, given Terramor’s site rates of $350 to $500 a night.

So when KOA went shopping for a second Terramor location, it wanted a blank canvas, a raw piece of property in an upscale neighborhood that it could shape more to its liking. That upscale neighborhood turned out to be near the Catskills towns of Woodstock and Saugerties, an area gaining some renown as the new Hamptons for New York’s monied crowd. The property it settled on is a 77-acre expanse of mature forest, providing ample space for site dispersal and for buffers against road noise, on which KOA is proposing to build 75 luxury platform tents with ensuite bathrooms and showers, each with its own firepit and parking space. Oh, and there also are plans for a 4,000-square-foot restaurant and event center, an outfitter’s shop, a swimming pool and wellness center, and a small cluster of housing units for 28 employees.

But—can this be?—KOA’s prospective neighbors are not happy. Ten of the 77 acres are wetlands, which KOA proposes to bridge with a berm that will disrupt water flow. Talk of evening concerts has raised concerns about noise pollution, with some residential properties only 200 feet from the glamping sites. Increased traffic, wood smoke from dozens of fire pits, loss of wildlife habitat—no, the neighbors are not happy. They’ve formed a group called Citizens Against Terramor, started a Change.org petition and a GoFundMe account, and raised nearly $30,000 locally to hire a hydrologist, an environmental engineer, a geologist—and, of course, a lawyer.

Protesters at planning board meetings have been hoisting signs that read “Terr LESS” and “Terramor Means ‘Love the Earth’: What About ‘Love Thy Neighbor?'”

Here’s the promised irony: not four miles up the road is the former Saugerties/Woodstock KOA, a typically modest mom-and-pop KOA franchise that puttered along for years to middling reviews. But that all ended two years ago, and earlier this year the property reopened as—wait for it—AutoCamp Catskills. That’s right: one of KOA’s major national competitors in the glamping sector has set up shop at a former KOA that’s a five-minute drive away. And did it without any of the sturm und drang that is battering the Terramor proposal, basically because it was not changing area dynamics.

Indeed, while KOA is still hoping its contested Terramor project can be opened in 2024, AutoCamp already has generated a slug of fawning press coverage for its first season. The 37-acre site houses 65 converted Airstream trailers, 10 tiny-home cabins and 10 “basecamps,” which comprise an Airstream plus a luxury tent; a central wood-beamed clubhouse with vaulted ceilings provides room for games, craft cocktails and morning breakfast and coffee service. (The discerning reader may note that this is a significantly higher development density than is being proposed for Terramor, making the lack of local opposition all the more notable.)

And, of course, everything is quite expensive, with weekend nights in October (two-night minimum required) priced upwards of $500 a night—not to mention firewood selling for $20 a bundle, barbecue kits for $69 and s’more kits for $15. “I’ve been in this industry for 15 years and I’ve never seen prices like this,” a local travel agent told a skeptical New York Post reporter. It’s also, of course, why KOA continues to flog this particular horse, despite all the ill-will it’s generating locally. There’s money to be made, dammit, and getting it the old-fashioned way—you know, by catering to middle-class families with travel trailers and troops of snotty-nosed kids—is just so dreary. And slow.

Glamping. Yeah—that’s the ticket.

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Mom and pop: pretty much out of it

Some myths die hard. Case in point: the declaration by Jayne Cohen to 30 or so industry newbies that RV parks and campgrounds “are a mom-and-pop industry.”

That warm comment was made at a morning session of the “Prospective Owners Workshop,” hosted by the National Association of RV Parks and Campgrounds as an add-on to its national convention a couple of weeks ago. Cohen is a long-time industry veteran who retired from the hands-on business of running campgrounds a decade ago to become an industry consultant. Her assertion was intended as encouragement, an assurance that unlike most other business ventures, campgrounds are run by friendly, people-oriented types who will bend over backwards to help each other, offer advice and share their knowledge. You won’t be alone, she was telling those newbies.

Maybe not so much.

A lot has happened in the past decade. There still are a lot of mom-and-pop operators around the country, but they’re quickly being elbowed aside by investors more concerned with debt leverage and financing their next acquisition than in helping out some greenhorn. And as the money becomes more important than the myth, that quasi-frontier mentality of “we’re all in this together” is being stripped out.

Two sets of numbers help put this in focus. One is the attendance figures ARVC trumpeted for its convention, including 1,127 attendees “representing” over 1,500 member parks. Think what that means. First, the number of campground owners was significantly less than 1,127, because the attendees list included several hundred vendors and exhibitors, as well as multiple attendees—spouses, adult children, employees— from individual properties. Second, that widening of the gap between ownerss and parks implies that as many as two-thirds of the 1,500-plus “represented parks” didn’t have someone who actually works the property attending the convention. Put another way, most of those “represented campgrounds” were links in a group or chain, not family businesses run by scrappy entrepreneurs.

The other number worth noting came from the ARVC Foundation, a charitable arm of the association that raises money from its members for disaster relief and education. “It’s in our nature to help,” assured a foundation spokeswoman on the convention floor, as she ticked off the natural disasters that had battered RV parks and campgrounds in the past year—culminating, just weeks earlier, in a devastating romp through Florida by Hurricane Ian. The amount in disaster grants doled out by the foundation in the year to date? A grand total of slightly more than $20,000—less than $15 per “represented” campground in the audience. How embarrassing is that?

It’s not that the traditional campground stalwarts have become suddenly cold-hearted. It’s that they’re dying off, like consummate industry promoter David Berg did last year, or they’re throwing in the towel and selling, or they’re simply being outnumbered by the more bottom-line oriented newcomers.

Even as veterans like Jayne Cohen maintain the myth of a warm and fuzzy campground culture, ARVC itself is growing ever more distant from its meat-and-potatoes members. This year’s convention registration initially was priced at $495—but only if convention-goers also booked their stay at the Rosen Center, at a cost of more than $1,000 a room. Otherwise, registration was going to get bumped up another $200—this for a crowd that includes campground owners who travel to conventions in their own RVs and stay at local RV parks. (It appears that this $200 penalty was eventually dropped, although it’s unclear how many attendees got clipped first.) Filet mignon and lobster, anyone?

As tone-deaf as that was, ARVC found another way to squeeze those least able to afford it: it touted “buyer workshops,” an offer to rebate convention registration fees to attendees who agreed to schedule individual meetings with five different vendors. These captive-audience sessions, more appropriately termed “seller workshops,” resembled nothing so much as an offer of free restaurant meals to lure the unwary to a time-share sales pitch. Investor-owners could readily pass on such a deal, but mom-and-pop owners? To those already bludgeoned by a four-figure hotel bill, a $500 savings could be just too much to resist.

As with its simultaneous push to create campground “standards,” ARVC clearly is following the money. It can be argued—and there are those who do— that this is an inevitable evolution of the industry and that it’s futile to resist the trend. Perhaps—although it’s worth noting that the country’s four most populous states, California, New York, Texas and Florida, all have their own campground associations that are not part of ARVC, suggesting that there’s a price to pay for becoming too distant from the grassroots.

Yet inevitable or not, the times have changed. A purely mom-and-pop industry this no longer is, and Jayne Cohen probably knows that, her assurances otherwise notwithstanding. Prospective campground owners should know that, too.

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FEMA didn’t get ARVC’s admonition

The split personality afflicting the RV industry, in which it can’t quite decide whether the wheeled homes it produces are recreational or residential in nature, has been on display again the past couple of weeks. The confusion is all but certain to result in calamity some day.

On the record, at least, the RV Industry Association (RVIA), the RV Dealers Association (RVDA) and the National Association of of RV Parks and Campgrounds(ARVC) all agree that the fifth-wheels and travel trailers that serve as vacation homes for millions of Americans are not meant for permanent, or even long-term, residency. Ditto for RV park models, which look every bit as sturdy and livable as their close cousins, the single-wide mobile homes beside which they are sometimes parked.

The distinction isn’t merely semantic. As I’ve written before, RVs are legally viewed as vehicles and are built to different codes than house trailers, which are defined as housing and therefore subject to more rigorous construction standards. The only notable distinction between the two is that as long as a house on wheels has less than 400 square feet under its roof—excluding lofts and outside porches—it only has to conform to the voluntary consensus standards set by the American National Standards Institute; more than 400 square feet and it has to meet more stringent Housing and Urban Development regulations.

The RV industry likes things this way because it means lower costs and less meddlesome interference from government regulators, which is understandable from a libertarian perspective—even if it does result in correspondingly shoddier and even life-threatening construction. As reported by the Indianapolis Star a month ago, in a devastating series that the RV industry has resolutely ignored, RV assembly workers don’t even need a license or certification to do electrical work, a level of lax oversight that HUD would never tolerate.

What brings this to mind is a general session at last week’s ARVC convention under the self-congratulatory title, “How National ARVC’s Advocacy Works for You.” Among the panelists was Wade Elliott, who has worked tirelessly over the years to raise electrical standards for campgrounds that in many cases were a do-it-yourselfer’s nightmare of undersized wiring, reversed grounds and shoddy work-arounds. Yet even Elliott demonstrated that he’s bought the myth that there’s a bright line between recreational vehicles and residential ones. Asked by an audience member why RVs shouldn’t be required to meet housing electrical standards, since there are so many people living in RVs, his answer was a short, “Well, they shouldn’t be living in them!”

Maybe not—there are a lot of “shouldn’ts,” including the necessary observation that people shouldn’t be living on sidewalks, either. But that’s the world we live in, and it’s naive at best and immeasurably cruel at worst to pretend otherwise.

Meanwhile, it’s clear that the federal government is no less fuzzy on the question of whether RVs are suitable as living quarters. Without any apparent recognition of the irony involved, RVIA issued a press release yesterday under the headline, “FEMA to Release Accessible Emergency Housing Proposal Request to RV Manufacturers.” As further detailed in the release, the Federal Emergency Management Agency wants to ensure access to a supply of RVs that are ADA compliant, with counter-top heights, thermostat placements and bathrooms suitable for wheelchair use.

The release stressed that “manufacturers will be able to use their existing processes, suppliers and materials,” and that FEMA will “do a significant run of units to create a stock of accessible travel trailers.” No mention, of course, of building the RVs to stricter HUD requirements—ANSI regs will suffice. And no acknowledgment of Elliott’s view that people “shouldn’t be living in them” because, of course, we all know they do. Even people in wheelchairs. In disaster areas.

What could possibly go wrong?

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Increasingly, it’s about da Benjamins

For all the high-fives and back-patting on display at the National Association of RV Parks and Campgrounds convention last week, an undercurrent of anxiety rippled just beneath the surface. Yes, the 2022 camping season was one of the best ever. Yes, there’s a wave of new campers invigorating the industry. And yes, a lot of the new-timers are more affluent than the fuddy-duddy boomers who dominated the landscape for so long. And yet. . . .

And yet, as strong as business was this year, for the most part it barely improved on 2021. As observed at an afternoon cracker barrel session led by Larry Brownfield, assistant vice president for franchise development at KOA, franchise revenues were up about 3% for the year even as camper nights were flat—in other words, any growth came from squeezing money out of a static customer base, not from increased business. Meanwhile, as summarized by economist Bob Kaplan in a breakout session on the economic outlook for 2023, industry headwinds are still gathering strength, including higher operating costs, higher fuel prices and inflationary pressures on family budgets.

Indeed, if there was one recurring theme to all the dollars-and-cents discussions, it was the observation that camping is becoming a pricey pastime. Propelled by a high savings rate during the many months of pandemic shut-downs, households were “flush with cash to spend on leisure activities,” Kaplan observed, to which the industry responded with opportunistic enthusiasm. As the number of camping households with annual incomes of more than $100,000 doubled from 2019 to 2021, the average cost of new RVs jumped 20% in three years, site rates kept going up, and the campground industry’s compound annual growth rate soared by half, to 12.7%, “an awesome number” that transformed the staid sector into a growth industry almost overnight.

But as seasoned investors are fond of saying, nothing grows to the sky. A strong dollar has made overseas tourism increasingly competitive with domestic travel—and as camping gets more expensive, hotels and other resorts also are competing for the same now shrinking pool of pent-up savings. Indeed, said Kaplan, demand for quality hotel rooms is already outstripping supply. Higher interest rates and rising fuel prices are deflating the RV sales balloon. And campground buyers are taking note and pulling back, as evidenced by a gradual rise in capitalization rates of newly sold properties, a marker of higher investment risk.

More cautious campground owners also are paying attention. Judy Brown, owner of a Florida RV park, said her campground now is almost completely occupied by full-timers, a hedge against softening transient demand and a transition enabled by the state’s flood of hurricane refugees. And Eric Rasmussen, president and director of acquisitions for Spacious Skies, an aggressively expanding chain of RV parks in the eastern U.S., said the company has started evaluating whether some of its properties should start accepting more long-term campers to ensure steadier cash flow.

While KOA and Spacious Skies both claim not to be changing their acquisition strategies—yet—Brownfield forecast that 2023 would be flat or even slightly down from this year. The “prudent” thing to do in an inflationary environment, he said, would be to reduce debt—the implication being that KOA’s pace of acquisitions may in fact start slowing down. Rasmussen, meanwhile, suggested that campground owners should “fire” their lower-end customers to make room for those who can absorb higher rates, another hint of growing financial stress.

Yet if the RV park industry indeed is heading into a significant slowdown, that may—somewhat paradoxically—result in a renewed acquisition spree. There’s more than $365 billion in cash sitting on the sidelines of the private real estate sector, Kaplan noted, just waiting for good opportunities, and real estate traditionally has been a safe haven in inflationary times.

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The new ‘campers’ really aren’t

If there’s one trend that has many veteran campground and RV park owners shaking their heads, it’s the largely pandemic-driven phenomenon of “the new camper.” Considerably younger, more diverse and more urban than their predecessors, the newcomers have changed not just the quantity of campers, but their overall quality—and not always in a good way. At least not from a traditionalist perspective.

Perhaps no one statistic sums up this new reality more succinctly than the answers to a Campspot survey, taken this past August, that among other things asked campers why they camp. A less than overwhelming 10% of 1,556 respondents answered “to spend time in nature.” The three larger responses could as readily have applied to an ocean cruise, a hotel stay or a ski resort: 23% for vacation family time, 19% for relaxation and 17% for proximity to outdoor activities. In other words, the one characteristic that traditionally set camping apart from all other vacation options has become the least important reason for doing it.

A summary of the Campspot survey was distributed at a breakout session at the National Association of RV Parks and Campgrounds annual convention last week, which was only fitting. Campspot, a cloud-based campground reservation management system, has been a principal driver behind both the swelling tide of new campers—who are most comfortable in the online universe—and of the increasingly transactional nature of “the camping experience.” With more than 2,000 campgrounds in its customer base, for which it processed more than $1 billion in gross bookings within a recent 12-month period, Campspot has been a leader in pushing “revenue optimization” in all its various incarnations, including demand pricing, site-lock fees and increasingly onerous cancellation fees.

But other industry representatives at the ARVC convention sang the same tune, usually to lay the groundwork for urging campground owners to accommodate the changing demographics. Typical in that regard was the observation by Jon Gray of RVshare, a peer-to-peer RV rental company, that the new campers are “looking for hotel-type amenities,” which he contended is a “great opportunity” for campground operators. In real-world terms, “great opportunity” means the opportunity to spend more money on various upgrades, increased amenities and all the marketing bells and whistles that go along with that. More spending, in turn, will necessitate higher rates, but the new campers, everyone seems to agree, not only can afford to foot the bill but won’t even notice the difference. “They’re conditioned for it—nobody says anything,” piped up an audience member at the Campspot presentation.

Indeed, KOA’s North American Camping Report 2022, released in late April, found that nearly 40% of the new campers have annual household incomes exceeding $100,000. Moreover, nearly half went glamping in 2021 and the rest planned to glamp this year, which is to say, planned on the least outdoorsy—and most expensive— way to “camp.” That high level of glamping interest contributed to KOA’s broader finding that 36% of all campers went on a glamping trip for the first time in 2021, with 50% saying they would seek a glamping trip this year.

While industry purists may shake their heads at such trends, others are all too willing to jump aboard what they see as a gravy train. As one such campground owner observed at a cracker barrel discussion about managing RV parks in a softening economy, “When we first started we welcomed everyone, but then we started upgrading our clientele.” Added another campground manager, who runs a large Florida park, ” People will pay to have fun. That will never go away.”

Just how pervasive the change has become was evidenced by ARVC’s choice of campgrounds for its prospective owners’ workshop, a pre-convention one-day session attended by approximately 30 people learning the business as they prepare to build or buy an RV park of their own. Following a morning of quick-and-dirty workshops, the prospective owners piled into a bus to drive an hour to . . . Camp Margaritaville RV Resort, the only example of what an RV park looks like that they would be shown.

Nice place, Margaritaville. Two restaurants, 401 sites that include 75 RV park models, 650 imported palm trees, artificial turf throughout, its own call center, a cashless economy—everything that’s needed, said one of its amiable owners, “to propel old-style RV parks into the present day.”

[Next post: Whistling past the graveyard? Despite all the upbeat emphasis on “the new camper,” a softening economy has some campground owners scrambling.]

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ARVC struggles with park ‘standards’

You know an initiative is in trouble when a) the people presenting it tell you not to get hung up on what it’s called; and b) the actual text of what’s being proposed is only talked about but never shared.

So it was at the National Association of RV Parks and Campgrounds (ARVC) convention this past week and its curiously emasculated discussion of an unprecedented set of industry “standards.” A first for RV parks and nearly a year in the works, the Voluntary Standards for Outdoor Hospitality Operations had been crafted by a nine-member task force chaired by past ARVC chair Kathy Palmeri, who acknowledged that something of the sort had been suggested 20 years ago but quickly got deep-sixed when it ran into a buzz-saw of member opposition.

Some things don’t change. Initially scheduled to be released over the summer, so ARVC members would be able to review them before the convention and thereby provide informed feedback, the standards instead were held back in an apparent effort to forestall concerted opposition. The pushback had already started, according to several insiders, and resistance was intense. An industry still dominated by intensely independent owners who don’t like being told how to run their businesses was not keen on having their association tell them how they should do things.

Addressing hundreds of campground owners at the convention, a noticeably defensive Palmeri explained that the task force had decided convention goers should have “context” before getting an actual document. There should be no rush to judgment. Campground owners shouldn’t get hung up on the word “standards,” she said, adding that “there should be no angst about it,” that the standards were completely voluntary and that they were, in any case, responsive to public demand for something of the sort.

Pushing on, Palmeri contended that industry changes were forcing ARVC’s hand. “There used to be a real solid campground culture,” she explained, “but that day is done, so we have to react to that.” More millennials, more institutional investors, more first-time campers—all called for more standardization, and if ARVC didn’t meet that challenge, then who would? Campground owners, she finished in an awkward flourish, could no longer “live under a rock.”

For all that “context,” however, still no standards. Instead, a last-minute and thinly advertised break-out session was scheduled with Palmeri and most of the task force, drawing 50 to 60 attendees before the meeting room doors were inexplicably closed. Without an actual document to discuss, those in the room had an hour of abstract discussion in which it became clear that a primary impetus for standard-setting was coming not from the camping public, but from the new money flowing into the industry. As Palmeri amplified, a seat-of-the-pants mom-and-pop industry “had flown under the radar for a lot of years, and we were happy to do that. But it’s a new day,” and the new players “are hungry for this kind of information.”

That information clearly is still being sorted out, as the new standards are still nowhere to be found. Instead, ARVC has emailed an extensive survey to its members, asking them to agree or disagree whether scores of benchmarks should be included in the standards, and whether each acceptable benchmark should be “essential” for all parks or simply “aspirational.” There are 10 “domains” of benchmarks, covering such broad categories as guest services, security, staffing and maintenance, some with dozens of individual items. Although Palmeri said the survey can be completed in 15 to 20 minutes, those few people in the room who had already filled it out advised budgeting an hour or so.

Campground owners who are not ARVC members–and there are many—can only peer through the window.

One further complicating factor to all this is a task force recommendation that ARVC create some kind of “good housekeeping seal of approval” for campgrounds that meet the standards. What, after all, is the point of having standards if no one knows which RV parks meet them and which don’t? Yet as one park owner complained, doing so moves ARVC one step closer to being a governing body, “which it’s not supposed to be.” And as another park owner observed, creating industry standards is little more than an invitation for lawsuits against RV parks that don’t adopt them, “voluntary” be damned.

Such objections notwithstanding, big money will have its way—and big money needs standardization in the service of predictability. Throw in ARVC’s ongoing drive to be more “professional” and less clubby, and you have a perfect storm of rule-making zeal. Camping indeed ain’t what it used to be.

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RV meetings will ignore the elephant

Private campground owners from around the country will descend on Orlando, Florida the next couple of weeks for two of the year’s biggest annual conventions, hosted by the National Association of RV Parks and Campgrounds (ARVC) next week and Kampgrounds of America (KOA) the week after. And next week, at least, the subject most prominently on the agenda–as it was last year–will be electric vehicles (EVs) and how they “are poised to be a major factor in the future of outdoor hospitality.”

How prominently? For openers, a plenary panel led by ARVC president Paul Bambei on Tuesday morning will provide “a vision of the future where EVs play an integral role in outdoor hospitality.” Immediately following will be a lunch panel, “Your Campground’s EV Road Map,” described in early convention programs in language exactly the same as used for the earlier panel. Apparently this will not be a fast-charging discussion.

Two predictions about this confab. Number one, the elephant in the room will be completely ignored. Number two, while convention-goers will be urged to start installing EV chargers at their campgrounds, little to no attention will be paid to the costs of such an amenity. While much will be made of how EV chargers are a necessary accommodation for a changing customer base (ARVC already is claiming that EV owners are currently twice as likely as everyone else to be campers), to which will be added the observation that campgrounds offering such chargers will have a competitive edge, any analysis of the costs that face campgrounds going the EV route will be sketchy at best.

It’s not that the charging station itself is prohibitively expensive: figure $500 for the equipment and possibly a like amount for installation of a Level 2 EV charger, which is sufficient for a full recharge overnight. (Level 3 “fast” chargers are commercial grade and therefore in an entirely different price category, starting at $20,000 per charger.) Assuming, therefore, that a campground wanted to ease into the EV world with half-a-dozen Level 2 chargers, it could do so for $6,000 or so, which won’t break anyone’s bank.

The problem is how to recoup the “fuel” costs. The amount of EV traffic into RV parks is still nominal, prompting most campgrounds that offer charging stations to simply absorb the cost as a goodwill loss-leader. But as more EVs start hooking up to a campground’s grid, that nominal expense will become a growing hit against the bottom line–inevitably prompting campground owners to wonder just how much of an increased cost they incurred and how they can start charging for the energy they’d been giving away.

The answer, alas, is “it depends.”

Electricity sales, unlike gasoline, are monopolized by electric utilities operating under rules that vary from state to state, with billing practices that vary from one utility to another. Most states, for example, don’t allow resellers of electricity to make a profit in doing so–all they can do is pass along their costs. And while such restrictions are gradually loosening up, seven states still regulate EV charging as the exclusive domain of electric companies, as described in a recent Politico article.

A second variable is what’s known as a “demand charge,” which homeowners don’t encounter but some business owners–including those who own campgrounds–know all too well. Demand charges are meant to compensate utilities for providing enough delivery infrastructure to meet spikes in demand caused by businesses with a lot of highly variable consumption–such as campgrounds. The demand charge is a base fee that is multiplied by the kilowatts consumed at peak demand each month, and is in addition to the per kilowatt cost of the electricity itself.

The problem for campground owners is that there is no one standard demand charge across the country: such charges vary wildly from one utility to another. And while Level 2 charging stations are not consumption black holes like Level 3 stations, they nevertheless can add an incremental boost to peak demand that will have a disproportionate effect on the final bill, as the higher demand charge will be multiplied across all of that month’s kilowatt consumption.

(Campground owners, for these and other reasons, should completely abandon any idea of installing Level 3 charging stations. As Politico reports, “Electrify America, a leading charging provider, says that demand charges are up to 80 percent of the cost” of operating Level 3 charging stations.)

Sorting out such cost complexities requires a lot of study and possibly the advice of a consultant, and undoubtedly will not be something the ARVC panels explore in any meaningful fashion, if at all. But back to that elephant. The other subject the convention won’t address–my second prediction–is the growing vulnerability of RV parks and campgrounds to climate change and extreme weather.

It’s ironic, actually, that ARVC will be meeting in a state that only weeks ago was battered so severely by Hurricane Ian that several dozen campgrounds were shut down, some permanently. Horrendous as the destruction was, and as inevitable as it is that similarly extreme storms will strike not just Florida but many other states, not one mention of the climate threat appears in the convention’s program. The cost and availability of flood or property insurance, best practices in fire- or flood-prone areas, how to determine when it no longer makes sense to rebuild–all these and a host of other pressing topics never made it into the program.

It’s likely that the KOA convention will be just as mum on the subject, since the industry’s “thought leaders” seem incapable of actually leading on so threatening an issue. One might wonder how much longer they can ignore the elephant in the room, but the fact that they’ll be doing so in Florida suggests their myopia cannot be overestimated.

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No room for RVs in gentrifying parks

As RV parks and campgrounds become increasingly folded into the cultural mainstream, it’s perhaps inevitable that they start resembling the larger society, warts and all. And so it is that campgrounds, once a refuge from the glitz and ostentation that characterize the contemporary world, have become as vulnerable to gentrification as any downtown warehouse district.

Remember Woodlands KOA? Probably not. A well-reviewed and moderately priced campground in Bar Harbor, Maine, it was closed three years ago with promises that it was going to be renovated and improved. RVers who had camped there in the past were thrilled. But when the campground reopened in 2021 it had been rebranded as Terramor Outdoor Resort, all the RV sites were gone and all “camping” was now restricted to renting one of four different styles of luxury tents–at an average price of $450 a night.

No? Then perhaps you’re familiar with French Broad River Campground RV Park in North Carolina, described in an online review as “a little hidden rustic gem” with all of its RV sites right on the river and a nightly rate averaging $45. That little gem went for $1.8 million earlier this year, as its owners of the past 27 years decided they were ready to do a little RVing themselves. “After some renovations, the new owners will reopen,” they assured their campers in a final Facebook post.

Yes, they will–but not any time real soon, as there’s still a lot of work to be done. That’s because the new buyer is AutoCamp, a fitfully growing national chain of glampgrounds that rents Airstream trailers and luxury tents but does not maintain spaces for RVs or tents, which would bring down the upscale vibe it’s seeking. This is, after all, an operation that describes itself as “an outdoor boutique hotel experience.” Which, in English, means nightly stays north of $300.

Or consider Prospect Lake Park in the Berkshires, a decades-old campground on the shores of a 56-acre lake that hosted generations of campers for the kind of idyllic summer vacations that would have caught Norman Rockwell’s eye. Its sites started at $39 a night, but if you needed 50 amps you were out of luck and whether you had a good time depended on how well you dealt with a gruff management style. If that rubbed you the wrong way, good news: the campground is now closed for at least another year, purchased last winter by a local developer, Ian Rasch, for $2.1 million.

As reported last week by Bill Shein of the Berkshire Edge, longtime summer residents who had put down deposits for this past season got refunds and were told that the new owner was planning on “significant improvements to the facilities.” Which is true as far as it goes, which isn’t far enough: the “improvements” entail replacing 125 RV sites with 40 park model RVs, reportedly being designed by a Brooklyn-based firm widely known for its “innovative prefabricated modular structures.” The improvements will not leave room for RVers or tenters.

Rasch’s intentions are also signaled by his working with LAND, an Austin, Texas-based design firm, to create a new “brand identity” for what had been a somewhat scruffy facility. LAND’s most recent project in the area was the 2018 launch of Tourists, a motel-turned-boutique hotel in nearby North Adams, where rooms rent for $300 to $700 a night. Chi-chi ‘R’ Us.

Why go to all the trouble of reworking an existing RV park rather than starting with a clean slate? Wouldn’t the latter be much easier and less messy?

Perhaps–but going the virgin-birth route opens up a developer to the uncertainties that come with seeking conditional use permits or other zoning approval, which means public hearings and potential public opposition. That’s what Terramore is discovering with its second venture, a 77-acre property it wants to develop from the ground up in Saugerties, New York. Despite its best efforts at community diplomacy earlier this summer, Terramor has been hit by local opponents who seem unimpressed with its pretensions to “outdoor opulence done right” but are worrying about water use, traffic and noise. Two weeks ago the newly formed Citizens Against Terramor told the local newspaper, “We’re afraid we’re headed for World War III.”

The alternative to that nightmare, however, can mean dancing right up to the line defining permitted use. Although Rasch’s redevelopment of Prospect Lake Park will amount to construction of a lakeside cabin community, by using RV park models instead of real cabins–or even tiny homes–he can maintain the fiction that the property will remain what it’s always been: a “campground.”

Just don’t try to camp there.

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Mobile-home Monopoly not a game

[Part II of a two-part look at the growing economic pressures squeezing mobile home parks, foreshadowing the future for many RV parks.]

As deep-pocketed investors continue vacuuming up mobile home parks at exorbitant prices, they have only two ways to make their purchases profitable. One is by replacing trailer pads with higher density housing, such as single family homes and apartments. The second is to jack up rents on the existing sites, in some cases simultaneously slacking off on maintenance and upkeep to reduce operating costs.

The first approach reduces the overall inventory of low-cost housing. The second raises the affordability bar for people most in need of low-cost housing, pushing them out of homes they may have occupied for decades and into the streets, for lack of anywhere else to go. Either way, the result is skyrocketing housing costs that add to inflationary pressures, even as county and city governments grapple with a tidal wave of homelessness that strains taxpayer revenues.

Meanwhile, the people profiting from the economic forces they’re unleashing rationalize their actions by blaming–well, anybody but themselves. Frank Rolfe, offering a prime example of deeply cynical self-serving rhetoric, contends that the U.S. is “in deep trouble” for one basic reason: “A dysfunctional Fed has driven rates up too far and too fast and there will be great economic suffering as a result.” In other words, the patient is sick only because of the medicine prescribed for an economic disease–a disease for which Rolfe is a primary but unacknowledged vector.

But Rolfe doesn’t stop there. “Bad times yield greater demand for affordable housing,” he writes. “So while Jerome Powell is busy raising rates and destroying the U.S. economy, he’s also acting as a powerful force to push mobile home park demand even higher.” The uncoupling of “affordable housing” from “mobile home park,” thanks to Rolfe’s (and his peers’) self-enriching actions, goes unremarked. In his own eyes, Rolfe is a savior of the working class, providing a praiseworthy safety net against the Fed’s recklessness.

The Frank Rolfes of the world owe their success not to any great investment brilliance, but simply to their understanding that residents of mobile home parks a) almost never own the land on which their mobile homes are sitting; and b) that “mobile homes” are almost never mobile. All of which means that the poor unfortunates inhabiting these homes are a captive audience, ripe for the plucking.

It doesn’t have to be that way, but creating the exceptions takes a lot of money and a fair amount of luck. Boston Trailer Park, for instance, which sits cheek-by-jowl with an apartment complex in which one-bedrooms go for $3,000 a month, is that city’s only mobile home park–but it exists today only because former mayor Tom Menino helped its residents take ownership of the land more than a decade ago. As a result, Boston has a little working class oasis in which residents pay just $425 a month for their sites.

Unfortunately, that sort of intervention is becoming increasingly difficult, thanks in no small part to the $4.5 billion in investment money that poured into mobile home parks across the country last year alone. Even though Massachusetts is one of a handful of states with legislation giving residents of mobile home parks a chance to match any purchase offers, outside investors are driving prices to unmatchable levels. Without government help and nontraditional financing, most mobile home residents may as well dream about living in Palm Beach or Beverly Hills.

Despite those odds, some successes have been notched. As NPR’s Morning Edition recently reported, the 200 or so residents of a mobile home park in Wareham, Mass. were able several months ago to match a $12 million offer from an Arizona-based investor–but only after obtaining loans from a nonprofit, ROC USA, and a $1.9 million grant from the state’s Affordable Housing Trust. Approximately five years ago, ROC USA also provided the financing that fended off an outside buyer seeking to acquire the 430-home Halifax Estates in Halifax, resulting in the country’s largest resident-owned mobile home community.

Colorado, where fewer than 10 of the state’s 900 mobile home parks have been purchased by their residents, recently had a similar success story. The approximately 200 adults and 100 children of the Parklane Mobile Home Park were able to recruit county assistance in tapping American Recovery Act funds for a $1 million forgivable loan, which in turn encouraged the private, family-run Bohemian Foundation to underwrite a $2.8 million low-interest rate loan . The balance of the $6.8 million purchase was then provided via a $3 million loan from the Impact Development Fund, a quasi-public financial organization.

Yet as these examples also illustrate, constructing such buyouts is a precarious business, requiring multiple financing streams of limited supply. Non-profits almost by definition have more limited financial resources than their investor-driven adversaries. Funding resources from the American Rescue Plan will be exhausted within a couple of years, if not sooner. And while some state governments are belatedly waking up to the housing crisis on their doorstep, their response is typically hesitant and restrained, hamstrung by concerns over interfering with market dynamics and worries about using tax dollars to intervene in the private sector.

Meanwhile, the mobile home version of Monopoly continues unabated. Earlier this month, it was the residents of Hi-Acres Mobile Home Park in Palm Beach County, Florida, who got their eviction notices, letting them know that the park’s new owners have other, unspecified ideas for their acquisition. One look at an aerial map of the property leaves little room for guessing what that might be: Hi-Acres is surrounded on three sides by a suburban development of single-family homes, and butts up against a golf course on the fourth. This is not an area that will long tolerate “affordable housing.”

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You can’t extinguish fires w/ gasoline

[Part I of a two-part look at the growing economic pressures squeezing mobile home and RV parks.]

In a harbinger of what lies ahead for a growing number of RV parks, the San Jose Mercury News reported this week that a family trust in California has just paid $40.7 million for the Rancho Santa Teresa Mobile Home Estates in San Jose. The mobile home park has 315 spaces, which means the purchase valued each site at $129,200.

Think about that. What kind of astronomical rents will it take to make that a profitable transaction?

And this was hardly the first or even the highest-priced acquisition of mobile home parks in California, which suffers the country’s most expensive real estate. As one example, the 116-site Mary Manor Estates in Sunnyvale sold in March for $39 million, which works out to $336,207 per mobile home pad. And the 110-site Winchester Ranch Mobile Home Park in San Jose changed hands last year for $50 million, or a whopping $454,545 per pad.

Given that price, Winchester Ranch clearly wasn’t purchased as a mobile home park but for its land, so there’s no surprise that it’s been bulldozed to make way for 320 single-family homes and 368 apartments. A similar fate may await other, similarly high-priced acquisitions. Then again, housing costs have become so extraordinarily distorted that even the most bloated valuations may be sustainable if rents are pushed to even more stratospheric levels.

Consider the average Los Angeles monthly rent for a mobile park site last year, which according to the commercial real estate services company Jones Lang LaSalle was $1,103–significantly higher than anywhere else in the country, yet the market still had the nation’s lowest vacancy rate, at 1%. With an average expense ratio of just 43%, that resulted in a market net operating income of $8,600 per site, or just shy of a million bucks for a park the size of Mary Manor Estates. That’s a number sturdy enough to support an awful lot of debt–and if it’s not enough, well, just raise the rates some more. With comparable apartments renting for triple that amount, the market will bear it.

Los Angeles in particular and California in general are high-cost outliers, but where they lead the rest of the country so often follows. It’s instructive, therefore, to read the latest musing from Frank Rolfe about why mobile home parks are better positioned to weather the Federal Reserve’s ongoing efforts to curb inflation by increasing interest rates. Rolfe, who has been flogged by me (here and here, for starters) and the media in general for his predatory approach to mobile home parks, contends that “mobile home park rents are ridiculously low and have massive potential for increases,” so higher interest rates are nothing to worry about.

But juxtaposing Rolfe’s further comments with recent mobile home park sales underscores the tragic transition that occurs when trailer parks–as well as RV parks and campgrounds–are sold by mom-and-pop operators to corporate and investment buyers. “How did mobile home park rents get so low to begin with?” he asks rhetorically. “To understand, you have to go back to the 1960s when the industry was young. Moms and pops owned virtually all of the mobile home parks and they simply were not good about increasing rents. . . . Moms and pops only raised rents at about half the level of inflation, resulting in rents being so ridiculously low.”

Put another way, moms and pops were putting the brakes on inflationary pressures, but now that moderating influence is being steadily reduced, even as inflation is reemerging as a global economic concern. From Rolfe’s vantage point, however–and that of the other investors snapping up such properties–“the greater demand that recession brings for affordable housing will allow offsets–such as higher lot rents–that will battle back the higher rates on loans.”

Those “offsets,” it should go without saying, only throw more gasoline on the inflationary fire.

[Next post: Part II, taking a look at the hypocrisy behind promoting mobile home parks as “affordable housing” by investors who are making them unaffordable, and the increased pressure that puts on RV parks as housing of last resort .]

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