One of the big concerns of RV park buyers and owners is the lack of control over revenues as you never know who will be coming and going on any given day. However, extended stay customers offer you a steady cash flow that can really ease those concerns. In this RV Park Mastery podcast we’re going to review what extended stay customers are, how to attract them, and how they can give you greater peace of mind.
Episode 55: Extended Stay Equals Extended Stability Transcript
Revenue is great, cash flow is terrific, but many RV parks focus on just an overnight experience where a customer comes in for maybe just a day and then leaves. But there's another style of RV park out there called extended stay. An extended stay equals extended stability. And you can introduce extended stay in almost any RV park, subject to your permit. So what is an extended stay RV park? This is an RV park that people live in for months, sometimes years, sometimes for a lifetime. It's the alternative to the overnighter RV park is also the alternative to the destination RV park, although you can have a destination which also has an extended stay component. So what is extended stay customers, what are they after and how do you attract them? Well, you probably noticed that America has a very strong baby boomer population at this point. So, what you have is, you've got a whole bunch of folks, I am one of them, born between the years of 1946 and 1964. Now, for the longest time, this was considered the backbone of the RV industry. That was the group that was buying up most of the RVs, that was the group that was driving them around and parking them in RV parks. But now you have a second subset, which are the millennials.
And the millennials have started to become larger RV users than the baby boomers, but the baby boomers have one attribute the millennials do not. That's age. Right now in America, there are roughly 10,000 baby boomers retiring per day. That's a whole lot of people, and they have found that many of these retirees, a very large group, part of their retirement plan is to buy an RV and travel America. And many of them, after they've done that for a while, they wanna just stop in one spot, they wanna keep the RV experience going. They like living small, they like nature, they like being around other people, but they don't wanna keep traveling. They're happy just to stop in whatever the most convenient and pleasant spot is that they've been going so far.
And that is one group of the extended stay, but yet, there's another group. Another group of extended stay RV customers can also revolve around millennials, which are people who are just officing out of their home, and some are liking to go to locations they like to live in, scenic areas and living in an RV park for months on end, although still being a part of an active workforce. And then you have other extended stay folks who are not fully retired yet, maybe, but they like to spend part of the year seasonally in certain locations. Let's just say they get a month off every year, or let's say they wanna go down to a RV park every weekend, maybe in an area lake. So that's another group that's still in the workforce, they don't work remotely, but they still can use their RV, seemingly year-round. Maybe they head down every Friday afternoon and don't return until every Sunday night. These customers, what they're typically seeking is an opportunity to have some degree of stability to themselves and also, they're looking for price efficiency in what they're doing. Let me give you the example of the RV park, the two RV parks we own down on the Texas-Mexican border. When we bought these RV parks, it was pretty much no stability in revenue. What you had is you had some small men on overnighter traffic, and then you had other folks who were there kind of on a destination, even an extended stay basis, but it was very, very seasonal. It gets very hot in Southern Texas.
So, almost everyone was a snowbird coming out of the North who would start to arrive as winter approached, but then would leave some time in the spring, and we didn't like that. We wanted to have year-round revenue. So we started importing park models, which are small structures designed for RV parks, typically 300 to 400 square feet in size, and we started selling these to the same people who are bringing their RVs down every year. And the argument was, "Why haul the giant RV down from the North, from Ohio or Pennsylvania? Why do that instead of just selling it and buying this, which you can buy for cash off selling almost any motorhome, fifth wheel or travel trailer, and then you can drive down or fly down here and stay here as long as you like, and not have the burden of gasoline cost of hauling that giant RV or driving it if it's a motorhome down?" And just the general unpleasantness and insecurity of driving a big thing on the road [0:05:33.4] ____ you get older, and it was a huge hit. As fast as we would bring them in, we got them sold. Today, about half of our occupancy is year-round. People who pay for that RV year-round, they may not use it year-round. They may leave the property for several months at a time and then return, but it gives us a consistent and steady income, and that's the entire point.
So if you have any RV park, it is possible to expand that extended stay component. To me, if you could build your extended stay to cover your mortgage, that would be idyllic. Now, you don't have to worry on any certain day, "Well, I wonder how many RV customers will come in today." Or, "I wonder how many RV park customers we'll have this month." Because you already have that built in. So what are the groups, and what are the things you can do for extended stay? Well, number one, offer it. Let people know that you're open and welcome in all of your social media, your website, everywhere, that extended stay is more than welcome. Many people, they just don't know where to go and they're waiting for someone to say, "Well, you could just park here and stay for a lifetime if you like." Also, create environments that people want to live in full-time, year-round/ Have events, create a sense of community, offer really good common areas and aesthetics and streetscaping. Don't just rely on putting up volleyball and basketball. That isn't what the extended stay is really looking for. They're looking more for a regular kind of living environment.
What are some things that they like? Oh, well, they like things that include some kind of community events on the weekends. They like the idea of... Such attributes as what we call blessing boxes, which are boxes where people can exchange books for free, read a book, put a book back in. These kinds of things which give people more of that residential feel of long-term customers, that's what they desire. We've also found that the extended stay customer really wants to see professional management. They don't wanna stay in a place where they don't feel their property is secured and they don't wanna stay in a place where they feel like they're not respected and appreciated. It's very hard to build an extended stay base if you do not have a strong manager. You need a strong manager. I would even give that manager a uniform, I know we did that on a podcast recently. Give customers the impression that where they're staying is a smart choice and affirm that in them every time they look out the window or go for a walk. Bottom line to extended stay is it is a terrific idea, it is something that many RV park owners fail to grasp the importance of or even give it a try. Now, it doesn't work in every location, that's for sure, but I've seen people morph that into other attributes. There's a thing called glamping which stands for glamour camping, where you give people the ability to stay in older, kind of nostalgic RVs, typically $100 plus a night.
That might be a manner giving you more steady revenue, perhaps. This way, you're not only part RV park, but you're also maybe part extended stay hotel, to some degree. We've also had great success in seeing many RV park owners who succeed in the area of tiny homes. There's really no place you can place those creations you see on HGTV. They don't have the proper HUD seal and they can't be placed into any sub-division or mobile home park. I was in a RV park recently in Indiana where probably a third of the entire park is nothing about tiny homes. The bottom line is you've gotta figure out what your customers want and what you can offer, but anything you can do to take that RV park and make it more into an extended stay environment is definitely going to give you extended, stable revenue, and that brings you a peace of mind like no other. This is Frank Rolfe, with the RV Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.