In a lockstep march to higher prices

Fair warning: this is a lengthy post, and would be much longer if I hadn’t already sketched out some of the context last October, in a post headlined “Can ‘dynamic pricing’ beget cartels?” It might help to read that before plowing ahead here, but in a nutshell, my basic premise was that the ongoing consolidation of online reservation systems is creating an opportunity—already widely common in the apartment rental business—for cartelization, with Campspot best positioned to take advantage.

Campspot has done nothing since then to dispel that possibility—indeed, just the opposite. And that suggests even higher prices lie ahead for RVers and campers.

Cartelization, briefly, means “an act by market participants to form an association to control or attempt to control generation, distribution, sale or prices” of a commodity or service—price fixing, in other words. It’s illegal in the United States, but that doesn’t mean established businesses don’t want it. They just don’t want to be caught at it. So a key understanding here is the realization that “market participants” may include not just primary players—campgrounds and RV parks—but also secondary parties who have some control over prices, with the consent of the primary players, but who don’t take direct payment.

Until recently, the possibility of price-fixing in the highly fragmented campground industry wasn’t a real concern. When I first got into this business, more than a decade ago, the FTC-fearing sages at the National Association of RV Parks and Campgrounds (ARVC) would get all atwitter if campground owners at an ARVC event would start discussing or comparing rates, but that was an absurd overreaction. With upwards of 12,000 campgrounds scattered across the width and breadth of the United States, all but a comparative handful owned by as many individuals, the thought that there could be any meaningful collusion on prices—or anything else—was laughable.

But times have changed. It’s not that the campground industry is now more consolidated—it is, but still not enough for individual campgrounds to coordinate pricing—but that its reservation systems have moved inexorably to online providers. Whereas campgrounds and RV parks until a few years ago each had their own reservation systems, some so primitive they consisted merely of large wall calendars or complicated index-card assemblies, now virtually all use one of a dozen to 15 computerized service providers that enable campers to make reservations online.

As they became entrenched within the industry, such reservation systems promoted several pricing innovations that eventually overwhelmed resistance from campground owners who didn’t want to antagonize their customers. Cancellation fees, site-lock fees and larger up-front deposits have all become standard, but even more pernicious has been the spread of dynamic pricing, which eliminated the old rate sheets in favor of algorithmically-driven rates that vary according to supply and demand. One result is that even campground owners don’t know what their campers are paying at any one time—but they do know that their bottom lines have gotten fatter, so they’re only too happy to play along.

It’s important to understand that none of this amounts to price-fixing in a traditional sense, and indeed, an argument can be made that it’s almost the opposite. Although a campground owner may set an upper and lower limit for how much his reservation system charges for a site, the actual outlay by any one camper is outside his field of vision, so to speak. Moreover, that campground owner has only a vague idea, at best, of what a competitor 20 miles away is charging for a comparable site, never mind the rate charged by a campground at the other end of the state.

But there is someone who does know all that, and more: the reservation system provider.

Client campgrounds of most reservation system providers number in at least the hundreds, which is a good start but still not enough to efficiently drive prices higher. Campspot is another story. With more than 1,800 private parks in North America comprising approximately 200,000 sites, it has enough aggregated data from numerous unrelated clients to follow in the footsteps of a Texas-based company named RealPage and its proprietary algorithm, YieldStar, which has significantly increased apartment rental rates across the country . As detailed in an exhaustively researched ProPublica article, 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. And guess what? Over time, such “suggestions” have been adopted ever more readily.

That’s not to say that Campspot is doing something similar, but to suggest that its growing dominance increasingly puts it in a position to do so. And given the inexorable logic of market dynamics in a consolidating industry (meaning both RV parks and campgrounds and online reservation systems), some such outcome seems highly likely.

In that regard, two recent developments suggest that Campspot’s drive toward overwhelming its putative competitors is gathering steam. The first is its announcement Feb. 14 of “Campspot Accelerator,” unabashedly described as a “new revenue-driving feature” for campgrounds. Basically an advertising platform grafted onto the reservation interface, Accelerator “placements” are “intentionally selective and thoughtfully designed to create the most value for the consumer while maximizing the potential for the campground.” Translation: campers reserving sites through Campspot will be enticed to spend extra money, with a portion of the proceeds going to the campground.

Thus far, Campspot is offering two such “accelerators.” One is a partnership with RVshare, which connects RV owners and campers looking to rent an RV—which, okay. But the truly innovative offering is Sensible Weather, which is selling an insurance-like product that “reimburses a camper’s reservation costs when rain impacts their experience.” Claiming that weather “is the most stressful part of planning a camping trip,” Accelerator now offers to make the insurance available for purchase when booking “to help increase camper confidence and enhance the overall experience.”

This adds a whole new dimension to what reservation systems offer, and until other providers catch up, promises to give Campspot even more of a competitive edge in building its client base—and why wouldn’t an RV park owner jump at the chance? But Campspot isn’t just broadening its sales appeal by adding new revenue generators to its menu. It’s also getting a promotional assist from . . . wait for it . . . ARVC, the same organization that once upon a time got panicky when members asked each other about their rates.

Two days after Campspot made its Accelerator announcement, ARVC sent out a membership email blast with the subject line, “Save Time With Campspot.” The actual message, featuring a prominent ARVC logo over a Campspot picture of a happy couple looking at a laptop screen, started with: “Campground owners and operators love the time-saving, stress-reducing features of Campspot. In fact, you might even catch Campspot owners doing a little happy dance in front of their computers from time to time.”


The email goes on to tout Campspot’s grid optimization, provides a link for requesting a demo, and quotes a happy customer. It doesn’t mention any other reservation system provider, even though most, like Campspot, are Supplier Council Members of ARVC—and most provide similar grid optimization features. And it never acknowledges that this email was a paid advertisement, which most assuredly it must have been, because why else would it have gone out?

The bottom line is that Campspot is moving quite aggressively toward monopolizing the campground reservation business, raising the specter of still higher rates for RVers down the road. This move is being greeted with the ready compliance of campground owners who see nothing but more profit for themselves. And it’s happening with the ironic cooperation of ARVC, which apparently has pivoted 180 degrees from its once-overblown anxieties about price fixing.

Who would have thought that a backwoods industry like this would end up on the cutting edge of money-extraction practices?

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‘Resortainment’ infects camping, too

To the extent that the RV park industry increasingly draws inspiration from its hotel-and-resort big brothers and sisters–which is to say, a great deal–looking at the latter can give campers and RVers a sense of what lies ahead for them. Judging by recent developments, alas, that means more glitz, higher prices and less of anything that resembles “nature.”

One signpost to the future is provided by an article this past week in The Wall Street Journal, headlined “Hotel Owners Embrace ‘Resortainment’ to Boost Business,” detailing the latest efforts to “persuade guests to stay longer and spend more.” That means, among other things, hotels adding the kinds of distractions that some campgrounds already have installed–ziplines, waterslides, minigolf, playgrounds–and some that may be next in the campground pipeline, from 4D-theaters with moving seats to virtual-reality games. More amenities mean higher rates, of course, but as explained by Bjorn Hanson, an adjunct NYU professor, “What was learned during Covid was that most of these leisure travelers are not as price-sensitive as assumed.”

All this comes in the wake of private campgrounds transforming themselves from having an emphasis on reconnecting with nature to having an emphasis on being a family “activity,” an evolution decades in the making. While inoffensive and even commendable in its purpose (who’s going to argue that families spending time together is a bad thing?), the shift opened the door to marketing and packaging of “experiences” that reached its apotheosis with the Jellystone campgrounds, which explicitly sell themselves as kid-centric amusement parks. Camping at a Jellystone is incidental to photo ops with Yogi Bear and buying Yogi-themed souvenirs, and building a campground is a helluva lot cheaper than building a Wolf Lodge, its closest hotel analogue.

Nor is Jellystone an outlier. The hotel-and-resort-ification of the campground industry can be traced directly to the influence of its most recognizable name, KOA, which fell under the sway of a former hotel and casino operator when Jim Rogers became its chief executive in 2000. As Rogers later told Forbes magazine, “the casino industry is so cutting edge and the camping industry is so ‘back of the woods’ ” that his work was cut out for him, starting with a big push to add full-service cabins to every campground in the system. More hotel practices quickly followed, few having anything to do with camping other than to make it less, well, natural.

In the years since, KOA, Jellystone and ARVC, the industry’s trade group, have all heavily promoted hotel and resort industry practices, from computerized reservation systems to dynamic site pricing to the latest holy grail, “yield management.” By unbundling various products and services and pricing them separately, then “dynamically” adjusting each price in response to supply and demand, a business can squeeze out every last possible bit of revenue. Old timers may scorn that as “nickel-and-diming,” but as the Wall Street Journal reported, leisure travelers just aren’t all that price conscious.

In that respect, there’s yet another Wall Street Journal article–published today–that speaks directly to what’s happening. The headline pretty much sums it up, reporting on a company that the campground industry’s movers and shakers consistently cite as the paragon of hospitality: “Disney’s New Pricing Magic: More Profit From Fewer Park Visitors.” As the subhead further explains, Disney theme park attendance remains below pre-pandemic levels, but not to worry: the Magic Kingdom simply raised some prices and eliminated or started charging for services and features that used to be “free,” i.e. part of the overall package. And guess what? Record revenues and record operating income followed.

That kind of magic is sure to bedazzle the swarm of deep-pocketed investors circling the industry, and as they sweep up more and more of its larger campgrounds and RV parks, expect similar pricing dynamics. The time is rapidly coming when most middle-class families will figure out they’ll be better off, and less impoverished, by forsaking the razzle-dazzle and heading for the woods–where they can actually carve out some undistracted quality time together.

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