Campground and RV Park Management Tips
Each quarter we will address a new subject and each month we will provide a new tip of the month. So be sure to bookmark this site and check out the new tip each month.
Subject of the Quarter: Yield Management: Setting Rates for Maximum Profit
In the late 1960’s when I first became involved in this industry, the typical rate for a night at a campground was $2.50 for two people plus an additional 25¢ per person over two. Today the average rate is around $20.00 but most campgrounds still charge a rate like $18.00 for the first two people and an additional $2.00 per person over two.
Tip of the month: May
Northern Campgrounds:
It’s not too early to start to think about how you are going to control the weeds that sprout up throughout your campground later this month. While both the federal and state government now regulates the entire field of pesticides, herbicides are not as tightly regulated so even without a pesticide license you can purchase some very good commercial herbicides. The best thing to do is to take a look in your telephone book under Agricultural Chemicals. Then go to a suppliers store and ask them what will work the best for your situation. Usually if you apply a tank combination of a burn down herbicide and a preemergence chemical you can control weeds in your sites for a year. The other alternative is to hire a commercial applicator to apply the necessary chemicals.
Southern Campgrounds:
There is a real temptation to take it easy this month.
The snowbirds have all headed north and it is too early for any summer vacation
business. This month however, is an ideal time to take stock of your campground
or RV Park. Take a clipboard and several sheets of paper and walk through
the park. Make a note of everything that is broken or in need of repairs.
What needs a new coat of paint? What looks worn? Now take this list and
develop a comprehensive maintenance list. A three-ring notebook works well.
List each project on a page, what needs to be done, what materials are needed,
who will do it, and then set a date to make the repairs.
Most parks also have a weekly rate that is normally the seventh day free and a monthly rate that more often than not appears to be picked out of the air. This pricing policy makes it very easy to quote a rate when someone calls your campground but it does not do much for the bottom line. I have visited well over a thousand campgrounds and with very few exceptions, I have never seen a park where all sites are exactly the same. However, the typical campground today charges the same rate for every site on the park of a given type every day they are open. Now stop and think about this. Is the best full hook up site on your campground worth the same price on the 4th of July as on the 4th of September? Of course not! Airlines, hotels, motels, car rental companies, and motorhome rental companies all use yield management to maximize their profits and so should you.
I can hear you saying now, “I can’t use yield management, I’ll lose customers.” Sure, you might lose a customer or two. Nobody said you could please all the people all of the time. If you have a 100-site campground and you charge an extra $2.00 per site for one day only, you could increase your income by $200.00. If some people decided you were too expensive and did not register and you couldn't replace them with new customers, you could have about eight empty sites and still be ahead. In reality, as long as you provide good value for the price charged people will not walk. Did you know that many major tourism companies with names known for quality raise their admission charges if they don’t receive at least a certain percentage of complaint letters about their prices being too high. When was the last time that one of your campers took the time to write to you to complain about your rates?
Now it’s easy to raise your rates but how do you tell the customer what the rate is when you have so many variables? There are several ways to approach it, one is to give them a range and be up front and tell them, not that the rate is higher on the weekend but rather that they can get a discount during the week. The 4th of July weekend is not being increased, that now becomes your regular rate but they can get a discount if they stay on a different weekend. Another plus is that now the senior citizen who is the loudest complainer about rates can be offered a less expensive site. When they check in, all you have to say is, “If you feel our rates are too high I’ll be glad to reserve one of our Standard sites for you. That site is $4.00 a night cheaper than our Super site.”
Now how do you keep track of all of these rates?
If you are on a manual system for reservations and registration it is very
difficult to keep track of and I strongly recommend that you limit yourself
to only a few of the different price points such as assessing a surcharge
for major holidays and setting only two categories of site types. If you are
on a computerized system however, the sky is the limit and you can experiment
with what ever works best for you. Whatever you do, let's break out of the
rut that was created way back in the 60’s and join the twenty-first century
with at least a small amount of yield management.
Adopting a yield management pricing policy can add more than 25% to your bottom line but how do you go about it? It takes a lot of research to determine the different price points to use and how to set them up. If you approached it in the same manner as most hotels do you could have well over one hundred different prices for camping at your campground during one year. Most campgrounds will realistically end up with about half of that many price points. Staves Consulting is available to help you create this system. To manage it you will want to consider using a computerized reservation and registration system. If you are still on a manual system it is still doable but you will not be able to manage as many different prices.
The following is a list of some of the companies that provide campgrounds with computerized front desk systems. Please don’t construe this as an endorsement of any of the systems but treat it only as a resource.
Campnet: http://www.kiz.com/campnet/html/isoft.htm
Campground Manager: http://www.campgroundmanager.com/
Digital Rez: http://www.digitalrez.com/
Easy Inn Keeping: http://www.easyinnkeeping.com/
Goughwares: http://www.goughwares.com/
Kampgrounds of America: http://www.kampsight.com
RV Space Managerhttp://www.rvspacemanager.com/
Shertek: http://www.shertek.com
Next quarter we will cover retailing in your camp store.
