RV Park Investing Newsletter

The leaves are starting to turn, and that will encourage many RV owners to hit the road to soak up the scenic beauty. Following fall will be the dead of winter, so it’s time to take advantage of this final revenue push of 2015. Don’t think that the end of summer marks a decline in revenue. It’s time to turn up the heat (literally) on your marketing, and see what you can do to generate maximum sales. Put out those banners and flags, come up with clever promotions, and give it your all. For northern RV park owners, we’re approaching the time of year when it will be snowing soon. Time for one last push. And for those in the south, time to get ready for the arrival of the “snowbirds”. Good things are happening all over at this time of year, so take part in the celebration of all things RV!

Southwest Airlines began with a simple concept: to provide low-cost fares. But, along the way, it also developed other unique attributes that made it the most successful airline of the present era, the only airline to never have posted an annual loss. So what can all RV park owners learn from the success of Southwest Airlines?

Southwest proved that you can have fun and make money at the same time

Most airlines are very conservative and serious. But Southwest proved that you can also have fun and be successful. They were pioneers of this concept. Having flight attendants sing and tell jokes had never occurred before Southwest. Having the ability to change flights at the drop of a hat was another innovation. The ads were humorous. Everything was contingent on a sense of humor. And the consumers loved it. Southwest paved the way for all businesses to have fun.

Southwest proved that you can make big money with reasonable prices

Southwest offered flights at a fraction of the cost of the other airlines. They proved that you can make money in volume, and that you can offer lower prices if you operate more efficiently. They paved the way for offering a great value. Sure, Walmart beat them by a few years with that concept, but Southwest took the idea to an industry that had never seen a laugh before.

Southwest set the standard at hitting budgets and making a profit

Southwest has never posted an annual loss. They set reasonable budgets and stick with them. This is evident in their timeliness in leaving the gate. They are very sharp and aware of what they’re doing. This is also true of all good RV park owners. They know their budget, and they strive to hit the numbers. It’s a whole lot easier to do both with an RV park than an airline that flies a million people a month.

Southwest is a win/win carrier, in which the customer and the company are both happy

RV parks are one of the few industries that offer a win/win, in which both customer and owner are happy with every transaction. Southwest also offers this unique relationship. It’s refreshing to know that, even in today’s America, you can spend your life with nothing but happy news.

Conclusion

Southwest Airlines sets a great example for RV park owners. It makes money and has fun at the same time. It hits the budget with complete dependability. It offers a win/win customer experience. Maybe you should start giving a bag of peanuts at all RV check-ins?

You can’t go far today without seeing a positive article on the RV industry. Why is that? I think that RVs are right in line with several American trends: 1) the 10,000 baby boomers who are retiring each day 2) the trend to more family-centered, simple activities 3) the new demand for “micro-housing” and getting by with less rather than more. We have honestly not seen a negative article on the RV industry in about four years. It’s nice to be in an industry that everyone loves.

This is an actual photo of an RV park I passed by in Kansas recently. It think there’s a lot to learn from this photo, although mostly in what you should not be doing with your property. Here are the lessons learned from this photo.

This RV park has zero appeal from the highway

Have you ever seen anything more bland than a brown building in a brown landscape? We live in a very competitive society, with a million options for entertainment. You have to work hard to stand out from the crowd and convince the customer that you’re the best option for their time and money. That means bringing Hollywood excitement to that RV park in Kansas. This park would have trouble attracting someone with a flat tire to pull over. Successful RV parks have sex appeal, and this park has none.

This RV park has no signage

And what’s with the lack of signage? Who ever heard of an RV park with no signs even identifying it as an RV park? All I can guess is that it’s an old KOA facility, and probably the sign fell down in a storm years ago, and they just assume that everyone knows where they are. This park needs a giant sign that says “RV PARK” coupled with some flags and banners. And the signs should be large enough that you can see them with enough time to exit the highway.

This RV park is not aesthetically pleasing

This RV park is like a blank canvas – there’s so much you could do with it, but nothing’s happening right now. Imagine this same photo with a three-rail white vinyl fence down the frontage, a nice property sign at the entry, landscaping down the frontage, flags spaced equally every 50’ down the fence line. And imagine a few inflatables for kids in the background, and some up-lights on the flags and sign. And maybe a re-paint of the building into something a little more hip, like mauve. This RV park suffers from an extreme lack of imagination.

This RV park has no occupancy

I know it’s hard to believe, but this RV park is lacking one additional ingredient: RVs. There were maybe two customers in the whole park. Of course, this was a direct result of all the problems mentioned earlier. Who would possibly pull into this RV park unless they had run out of gas about 100 yards up the street?

This is the kind of park to buy and turn-around

This park could be a raging success in the hands of a more marketing-savvy owner. We have made tremendous profit from buying neglected properties such as this one, and then doing a complete overhaul on their appearance, marketing and management. When you buy a successful property, you pay a high price and have little improvement potential in the net income. When you buy a property that is a mess, you can often buy them cheap and have gigantic improvement in year one profits.

Conclusion

This is an RV park that you would never want to emulate, but maybe buy and make into the jewel that it could be. Until then, it’s just sitting there in Kansas waiting for a new owner.

All good things must come to an end. But how can you stop that? How can you keep that customer from leaving – and book that rent for another day? There are many ways to proactively retain your customers.

Give them ideas of things to do

Have you effectively told your customer of all the great things to do in the area. Do you have a complete list of every attraction, museum, trail and sight to see? If you can come up with some additional fun ideas, the customer may well delay leaving until they give those a try. Part of your job as an RV park owner is to also be a tourism pro for your area, and it’s time to break out the full list of entertainment options.

Drown them in customer service

Many customers really appreciate superior customer service – enough to stay extra time just to keep soaking it up. Find out what’s important to the customer, and then go the extra mile. Bring them a cold drink, and bring them the newspaper. Keep them posted on all the news. Put your people skills to use.

Make them a deal they can’t refuse

Everyone likes a great deal. If the customer has been there for a while, offer them a discount to stay a little longer. Although you will be unable to keep them on price alone, a little reduction in nightly cost may push them over the edge to stay a while and continue on with their vacation right where they sit.

Conclusion

Customer retention is extremely important to RV park management. If you can get every customer to stay just one more day, it can mean thousands in extra revenue. Make it your goal to get every customer to never leave. Of course, that’s not possible, but if you can have small successes in this regard, it really adds up.

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I once had someone come in and inquire about renting an RV lot on a long-term basis. But the lot they wanted had a tiny RV parked on it. So I told them I’d talk to the guy with the tiny RV about moving it to a different lot, since I was giving him a cheap deal to leave it there while he was on location working on a construction project. The guy called me and said “go ahead and move my RV to any lot you want” so I was in great shape. But I had to get the RV moved. This was a fifth wheel, and I needed someone who could move this RV. So I called an RV supply place down the street, and they said they’d move it for $100. But then a guy inside the park said “I can move that for $20”. So I hired him. He backed up to the RV, hit it with his truck, and then it came crashing down on him. In the end, I had to pay for the damage to the RV and the guy’s truck, which was many times more than the $80 I was trying to save. What does this have to do with Halloween? Halloween is based on unpleasant surprises (the monster coming out of nowhere) and this sure was one. But, unlike the real Halloween, I got no treat.