Tag: Outdoor Hospitality Industry Benchmarking Report

Tossing a pebble into the OHI pond

The National Association of RV Parks and Campgrounds earlier this month held its annual convention in Kansas City, at which its most prominently headlined action was to rebrand itself as the Outdoor Hospitality Industry, or OHI. Quite overshadowed by that announcement, and lost in the typically tepid shuffle of self-promoting panels and lectures, was a ground-breaking presentation by Michael Scheinman, CEO of Campspot—underscoring, yet again, that this is not an industry given to self-examination.

“Navigating the Camping-Hotel Crossover: Lessons for Success in Outdoor Hospitality,” if Campspot’s subsequent press release is to be believed, played to a standing-room only crowd. But the industry’s primary “news” outlet, Woodall’s Campground Magazine, couldn’t be bothered to provide more than a sketchy three-paragraph summary—although, to be fair, it did link to Scheinman’s white paper, so at least it can be read online [registration with Campspot required]. Other campground-oriented media, however, pretty much gave the presentation a pass.

That’s what happens when you swim against the current, even obliquely.

Scheinman’s apostasy was to challenge industry group-think by asking an obvious question, “Why are campgrounds increasingly considering hotel best practices?” As he summarized in an opening statement, the industry’s uncritical embrace of hotel industry tactics and tools “can lead to poor guest experience, sub-optimal revenue optimization and costly and unnecessary investments”—not exactly what a convention full of vested interests devoted to selling hotel industry tactics and tools wants to hear. Little wonder, then, that Scheinman’s tossed pebble sank beneath the pond’s surface with scarcely a ripple.

Long-time campers and RVers are well aware of this trend, which began in earnest with the pandemic but can trace its roots to the turn of the century, when a hotel and casino executive was tapped to become president and chief executive of the industry’s largest campground chain. As Jim Rogers told Forbes magazine a decade after assuming KOA’s leadership mantle, “the casino business is so cutting edge and the camping industry is so ‘back of the woods’ ” that he was having a lot of fun making the latter look a lot more like the former. Among his many transformative initiatives, for instance, was a full-court press to add cabins—many, many cabins—to RV parks, which Rogers explained “are just like a suite in a hotel except the interior is all wood.”

That myopic outlook has become even more prevalent today, Scheinman observed, thanks to the pandemic-driven flood of institutionally-backed investors looking for a more stable alternative to the volatile hotel-asset class. As those investors applied their hotel experience to their campground acquisitions, a similarly pandemic-driven class of new customers flocking to this alternative form of lodging brought expectations based on their experiences with hotel and vacation rentals. Meanwhile, hotel-focused managers, consultants and software vendors also piled into this “new” business opportunity, but in doing so “often needed to convince campground operators that they were ‘missing out’ when neglecting key tactics and tools used in hotels”—as good a description as any of most OHI convention content.

This perfect three-way storm of hotel-oriented pressure to change traditional campground culture and practices has been augmented by technology, which provides campground owners with labor savings while creating opportunities for new revenue streams. But as Scheinman wrote, “given the relative dearth of campground-specific software related to point of sale, loyalty, customer relationship management, accounting, and others, they were led to hotel-centric solutions.” In short, there now exists a hotel-based feedback loop that has pushed the campground industry out of Jim Rogers’ “back of the woods” to the front of the line, although that line may not be one you want to be in.

For campers, the application of hotel-centric solutions to campgrounds has meant significantly higher rates and add-on costs, less face-time with a shrinking number of campground employees and an ongoing shift in the ratio of RV sites to various forms of lodging. It also, arguably, has resulted in a shifting ratio between “nature” and physical comfort as fundamental aspects of the camping experience, requiring that nature’s less comfortable aspects be minimized, if not eradicated: more outdoor lighting, more paved surfaces, more hard-sided shelters, and so on. And as nature gets pushed to the periphery, a compensatory emphasis on “amenities” takes its place, from wifi to golf car rentals to organized programs such as movie nights or kids’ activities.

These developments, although widely discussed in campers’ forums, are largely unexamined by the campground industry itself, which continues lurching in a direction largely defined by the newcomers. Indeed, it’s notable that to the extent a spotlight has been trained on the subject, it’s being shined by a graduate of the Cornell School of Hotel Administration, alma mater of a significant number of the new campground investors. Nor is Scheinman a disinterested observer, as much of his white paper’s conclusions lead to an explanation of why Campspot is ideally positioned to provide campground-specific—rather than hotel-centric—services that meet the industry’s unique needs. In that respect, Scheinman’s presentation was only a more sophisticated version of the usual self-serving OHI fare.

But self-serving or not, Scheinman dared raise questions that the RV park industry would benefit from considering. A little bit of critical thinking and discussion would go a long way in disrupting the relentless promotion of campground “modernization” —which, of course, explains why Scheinman’s white paper has received so little attention. And while his “solution” may be to Campspot’s advantage, that doesn’t make his observations less trenchant or the problems he highlights any less urgent.

Another year, another flawed survey

When the National Association of RV Parks and Campgrounds holds its annual convention next week, among its featured presentations will be the release of a “highly anticipated” survey of the industry. The “in-depth look at the current state of park operations across the U.S.” will provide “valuable insights into the outdoor hospitality industry” that “will be an important tool for parks looking to gain a competitive advantage,” according to its advance press.

If that’s not enough to get your heart pounding, consider that the 2023 Outdoor Hospitality Industry Benchmarking Report “is not just a collection of statistics but a narrative of the industry’s pulse.” Campground owners consulting the report will find “the hidden potential in regional distinctions,” enabling them to turn those distinctions “into strategic advantages for success.” Or so we’re promised.

Well, maybe not. As in years past, ARVC’s attempt to paint a reliable statistical portrait of its membership suffers from several limitations, not least among them that same membership’s reluctance to share information. (This is not unique to ARVC, as other industry would-be profilers have encountered the same problem.) In this case, although the survey sampled 4,823 campgrounds, only 8% of ARVC’s members responded, as did a mere 4% of non-ARVC campgrounds. That left an acceptable 282 survey responses—enough for the report to claim a 5.6% margin of error at a 95% confidence level, which isn’t bad for the report overall.

Where that confidence breaks down, however, is in the report’s attempts to reach conclusions about various sub-categories, such as campground size or location or type of ownership. The report’s authors acknowledge as much, albeit only in general terms, by noting that “the margin of error for percentages based on smaller sample sizes will be larger.” How much larger? Your guess is as good as any, particularly because virtually all of the survey data is presented as statistics, not as hard numbers that would enable some independent crunching.

Indeed, almost the only hard data that we can calculate from the provided information is the number of respondents in each of four regions of the country: 45 in 12 western states, 51 in 14 northeastern states, 82 in 12 midwestern states and 104 in 12 southern states—or twice as many respondents from the south as from the west. Yet many of the survey’s charts run percentages side-by-side, inevitably prompting misleading apples-to-oranges comparisons between regions, not to mention making a mockery of “the hidden potential in regional distinctions.”

The confusion between statistics and hard numbers afflicts the survey designers themselves. For example, a question about available accommodations asks, “How many sites/units are available at this RV park, campground or glamping park?” Instead of providing a numerical answer, however, the survey lists percentages, such as 89% for full hook up sites or 18% for park model cabins, presumably letting us know what percentage of respondents provide that particular accommodation but not how many such accommodations are available.

Elsewhere, the survey simply throws in the towel—sort of—by acknowledging that it just doesn’t have enough responses for a trustworthy conclusion. This is especially notable in a section on rates, in which several charts leave blank any field that had less than 10 responses; fields with fewer than 30 responses provide the information but are shaded grey, apparently signifying that their numbers are not statistically meaningful. The alternative, it appears, would have been even larger swaths of empty space, attesting to the limits of a relatively small sample size.

There are other problems. One is the survey’s lack of a precise time frame, with responders asked for information about “the past 12 months” instead of a specific period, such as “calendar year 2022.” Not only does “the past 12 months” vary by approximately 15%, depending on when a survey was answered during the nearly two-month window before it was tabulated, but campground owners generally operate on an annual bookkeeping cycle and for many, that’s the information they’re most likely to grab. Moreover, a survey mailed out at the beginning of May means it was reaching its target audience just as that audience was heading into its busiest season—one possible reason the response rate was so anemic.

Then there’s the occasional creative approach to averages. A chart showing changes in nightly/weekly rates concludes that the median increase from 2022 to 2023 was 5%. But it turns out that median was not the midpoint of the increases that were made, but the midpoint for all rates: 29% of the respondents had no change in their rates and 2% actually dropped their rates. An additional 4% did not specify how much of an increase they instituted, but for the survey’s purposes were dumped into the low range of all the responses, further skewing the overall median downward. The actual median increase? Closer to 8% or 9% for those who did increase rates.

But here’s the survey’s biggest red flag: the 282 respondents claimed to have median annual revenues of $3.52 million, despite a median campground size of just 92 rentable units. That works out to more than $38,000 a site, which would require a nightly rate of $105 and 100% occupancy to achieve. Such numbers should tickle even the most insensitive BS detector—but that’s not all. The survey breaks down the $3.52 million as follows: $1.43 million in overnight site fees, $1.02 million in monthly and seasonal fees, $700,000 in camp store income and $0 for amenities/activities fees . Grand total? $2.52 million, or exactly a million dollars less than the headline number. Problems with addition? Maybe. Or maybe just bad data. What is clear is that no one thought to question such an off-the-charts number.

There are a few possibly insightful glimmers in the overall survey results, although without closer examination it’s hard to tell if they’re from iron pyrite or from the real thing. But overall, ARVC convention attendees should be wary of accepting any of this survey’s results at face value. That said, it’s virtually inevitable that various survey “findings” will be trumpeted by ARVC as gospel in the service of one agenda or another. The report is “statistical,” after all. Scientific. Irrefutable proof of whatever point is best served—and besides, no one wants to admit they spent a lot of money on something of such questionable value.