Ever since our panel session at ARVC in November 2022, our team has heard from many of our clients and audience members who gave us glowing and positive feedback.
The biggest takeaway from that feedback is that you want to learn more about how to focus your business and look at new strategies to manage the revenue that your park brings in. The second biggest takeaway from that panel discussion was that you wanted to hear more from our client and star panellist at ARVC, Kathleen Walsh from Advanced Outdoor Solutions. Kathleen has years of experience in helping grow many parks across the USA. This week our Chief Operating Officer, Erin Stevenson linked up with Kathleen to discuss her Top 5 Tips for Maximising Revenue in your park.
Tip #5. Ancillary Rentals
The main question you’ll need to ask yourself is “what are those things that we can bring into our campgrounds that add value and can increase our revenue?” Ideally these should be low cost to deliver but provide high value for your guest. The simplest example Kathleen provided was bicycles. In the US, bicycles cost $100 to invest in and provide a high value profit margin.
At my very first campground, we had weddings and so a tip if you have weddings, we gave away a wedding in a drawing, but the bride had to allow us to bring in our own photographer and use the collateral in our marketing efforts. So the bride got a free wedding and we got fantastic photos to use in our marketing.
When considering what to charge for the service that you provide, Kathleen suggests you undertake a Competitive Set Analysis. Look at your local competitors and see how much they charge for bicycle rentals. Then find out what your local bike store would charge for a day’s bike rental and set your price in the middle of what your competitors charge and what the bike shop would charge. Most importantly, listen to your market. The market will tell you if your prices are too high, too low or just right.
How to in NewBook: Manage these via the facility Hire Page.
Tip #4 Extra Fees for persons, pets and vehicles
We charge for everything Kathleen tells us. We charge for extra vehicles over the number that we feel can fit properly in the park in that space. We charge for extra children. We charge for pets. If you bought the pet disposal bags recently, you know how expensive they are. They’re not cheap. And in an RV park and campground, you tear through cases of those (bags) every year. At least charge enough for your pets that you’re recouping your cost of those. So it might not look like a revenue, but it’s a contract expense. It lowers your expense.
Find out the market rate and set your rate in accordance with the market, your own break-even point and your desired profit margin.
You should not devalue your asset. If you’re allowing the guest to set your rate instead of the market setting your rate, you’re devaluing your asset. And if you have a three-star or four-star property, don’t price yourself like you’re a one-star property.
“Don’t let the tail wag the dog” is Kathleen’s advice when it comes to setting the rate for your fees. Don’t just assume that your customers and guests will think that a rate is too high because you personally think that rate is too high. Take the emotion out of it and let the numbers show you what the market wants. Kathleen’s philosophy is to push until the market pushes back. That’s when you know that you’ve hit a wall and you’ll see your occupancy rates sitting at numbers below where they normally sit.
How to in NewBook: Set extra occupants via the Rates page & vehicles via Inventory Items page
Tip #3 Site Types
Not all sites are created equally. Traditionally, operators would class their site types as pull-throughs, back-ins and cabins. Kathleen tells us this is a bad way to go about your approach.
When I look at a site map I can usually eek out five or six different site types.
If you don’t have any neighbors behind you and you’re in a quieter area, you’re in a different site type. If you’re near the pool, you‘re poolside rather than back-in
The key takeaway from this tip is to really consider the advantages and disadvantages of different locations in your park If you’re on a highway and it’s really noisy on that row, your rate is lower than someone who’s interior and not on a road. Consider how many families with young children visit your park and see if those guests are the ones who usually book the sites closest to the playground or activities centre. When it comes to pricing the different site types, Kathleen doesn’t raise the rate dramatically. I start creeping up. $2, $5, $8. It’s very incremental, but when you multiply that by the number of nights you sell, it creates and enormous revenue stream
How to in NewBook: Set new site types by using Category Types page.
Tip #2 Activities
Free activities are found at every park you can visit. The key to generating extra revenue from those free activities is providing a great guest experience. Â Tie-dying shirts is a classic campground activity enjoyed by many guests. You might provide the activity for free, but the guest won’t often come to the park with a plain white tee shirt for the specific purpose of tie dying it. This provides an opportunity to make an extra $6-8 for every person who takes part in the activity just by selling white tee shirts.
One of the biggest money-makers I’ve ever put in any park was a bar right off of a kid’s play area. We opened up a little tiki bar and, in that state, you had to be 21 or over to come drink. And of course, we’re like, well, we’re never going to get the parents because what are the kids going to do?
So, we put in an extra special, not just a run-of-the mill play area, but a really nice play area right off the bar. So, the parents could sit and drink at the bar and enjoy themselves and the kids were occupied at the play area. So, even though the play area didn’t cost any money to use, we were making over the bar side.
Ultimately, consider what activities you currently provide for free and work out which complimentary products are essential to that activity being a fantastic guest experience and that’s where your revenue comes from.
How to in NewBook: Create new activities via the Activities Set Up page.
Tip #1 Managing Rates
Revenue Management is not about raising price. It’s about meeting supply and demand at the market rate. Kathleen explains how if you’re not constantly monitoring rate, pick-up, demand, occupancy, average daily rate and minimum length of stay, you’re leaving real dollars on the table. Take an approach to managing rates which doesn’t allow cherry picking.
If you would have a peek into my back end NewBook, you would see, Friday and Saturday might be my higher rates. Sunday I might go down a little, but not really because I get a lot of three-night weekends. Monday I might go down a little bit more, but not a lot because I still get some long weekends.
Tuesday and Wednesday I go lower because those are my off days. But Thursday I start creeping back up again because they’re coming in for the weekend. I monitor minimum length of stay and I shorten them, the closer we get to peak season.
How to in NewBook: Review and adjust daily rates through the Rates Chart.
Those are just small nuggets of wisdom which we got from Kathleen Walsh of Advanced Outdoor Solutions. She has an entire goldmine worth of knowledge for RV Park Operators.
Watch the full webinar below.