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.]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Most recent posts

Can ‘dynamic pricing’ beget cartels?

How long will it be before reservation software companies serving the campground industry take a lesson from apartment leasing agents and adopt a killer algorithm that will send your site-rates soaring?

One of the biggest mysteries in the RV park business, for campground operators and campers alike, is how rates are determined. How much “should” be charged for a water-and-electric RV site? Should a back-in cost less than a pull-through? How much more should be tacked on for a sewer connection? Fuzzy questions all, frequently answered by seat-of-the-pants calculations. But here’s the most difficult one of all: how often, and by how much, should rates be increased?

Historically, the simplest answer to that last question was to increase all rates each season by a similar percentage, explaining to campers that this was the price of “the increased costs of doing business.” Another approach was for campground operators to see what other parks in the area were charging and make corresponding changes, this time explaining to campers that the adjustment was to keep in line with “the market rate.” But that’s old school.

These days a rate sheet is as outdated as paper itself. These days it’s all about “dynamic pricing,” an algorithm-driven way of setting rates that fluctuate with demand–an apparently hands-free approach that absolves campground operators from any responsibility for camper resentment over higher prices. Indeed, with dynamic pricing, higher rates are the fault of the campers themselves. Who, after all, can argue with the iron logic of supply and demand?

Dynamic pricing, however, is just the first drop in the bucket. Algorithms are capable of doing so much more, especially in an industry that has almost entirely computerized its reservation systems–and in the process opened its gates to a potential trojan horse for even higher rates.

What the future might hold is heralded by an astonishing piece of reporting by ProPublica,  an independent, non-profit newsroom that produces investigative journalism in the public interest. A lengthy article by Heather Vogell, published Oct. 15 and headlined “Rent Going Up? One Company’s Algorithm Could Be Why,” establishes that a significant factor behind soaring apartment rents nationwide is a Texas-based company named RealPage and its proprietary algorithm, YieldStar.

Using data acquired from RealPage’s clients, which include some of the largest property managers in the country, YieldStar “suggests” optimum rates for thousands of open rental units each day–rates that often are significantly higher than the market rate, and frequently higher than experienced property managers believe are obtainable. As a former prosecutor in the Justice Department’s antitrust division told Vogell, “machines quickly learn the only way to win is to push prices above competitive levels.”

In addition to having a comprehensive grasp of what rental rates a major segment of the apartment market is charging, RealPage’s algorithm also calculates how demand for apartments responds to price changes–what’s known as price elasticity. As a result, it can call for disrupting the balance of supply and demand by “suggesting” a supply reduction while increasing rates. Property companies soon learn that they can make more profit by operating at a lower occupancy level–levels that “would have made management uncomfortable before,” as a former RealPage executive explained to Vogell.

While leasing agents would typically lower rents to fill vacancies, YieldStar architect Jeffrey Roper lamented that such practices simply undercut the rental industry. “If you have idiots undervaluing, it costs the whole system,” he said. “We said there’s too much empathy going on here. This is one of the reasons we wanted to get pricing off-site” by taking it out of a property manager’s hands and assigning it to an algorithm.

As a result, Vogell’s article notes, YieldStar’s “design and growing reach have raised questions among real estate and legal experts about whether RealPage has birthed a new kind of cartel that allows the nation’s largest landlords to indirectly coordinate pricing, potentially in violation of federal law.”

What’s intriguing about the YieldStar algorithm is that it seemingly does an end-run around anti-trust considerations, which come into play when industry competitors collude on prices. OPEC is the poster-child example, with major oil producers meeting to set production quotas and pricing targets. RealPage, however, is a third party–its competitors are not apartment mangers but other software providers. And YieldStar does not set rental rates, it simply suggests rates that leasing agents are free to accept or ignore–all of which complicates antitrust considerations and may explain why RealPage has gone unchallenged by the Federal Trade Commission or the Justice Department.

Given all that, it’s not a stretch to think that something similar could be coming to the historically tech-resistant RV park and campground industry. Not only have reservation systems achieved near-universal computerization, but the fierce competition among reservation software companies is rapidly winnowing the ranks.

CampSpot already has carved out a dominant niche, claiming it serves more than 1,800 private parks in North America (there are approximately 12,000 private campgrounds in the U.S.) comprising approximately 200,000 sites. CampLife, Astra, Digital Rez and a dozen others are baying at its heels, all holding out the promise of increasing revenues for their lucky clients. But what many people don’t realize is that all those companies are aggregating the data they receive from their numerous unrelated clients, creating massive data bases that can be useful in all sorts of ways–including the way RealPage has developed.

Reservation software companies were the primary proponents of dynamic pricing, eventually overcoming the entrenched opposition of campground owners who worried about the effect it would have on long-time customers and repeat business. These days, however, such notions of business-to-customer loyalty seem almost laughably quaint, and all the more so with the industry’s increased corporatization. With that “empathy” hurdle now overcome, further monetization of reservation data will face increasingly less resistance.

Don’t be surprised, in other words, if at some time in the murky future the rates at your favorite campground start increasing more than they already have. The invisible hand of the marketplace has a few more tricks up its invisible sleeve.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: