Today’s RV park breaks the boundaries of those of the past – but in a positive way. No longer do many RV parks simply offer one type of service, but a range of options that have different levels of recurring revenue. In this RV Park Mastery podcast we’re going to discuss the different ways and frequency of collecting revenue, and how you can harness this new playing field for greater and more consistent income.
Episode 41: Daily, Weekly, Monthly, Annually – Why Not All Four? Transcript
There are four distinct units of measure, but many RV parks only focus on one. This is Frank Rolfe, the RV Park Mastery Podcast. We're going to be talking about daily, weekly, monthly and annual rent.
Now for many RV park owners out there, and many would-be mobile home park buyers out there, they're only thinking about just one item and that's daily. Somebody pulls in, gives you 30 bucks, 25 bucks, even 75 bucks at some properties. And they think that's all it's about. That's the whole goal, let's just try and get someone in for the night. Now, if you buy a mobile home park that caters to that crowd, if you've got an overnighter RV park, well, then that may be mostly the end of the movie for you, and you are simply in a daily revenue mode. But a lot of other RV parks have more potential than that, the potential to build a much more stable level of income. So let's talk for a minute and break it into those four pieces and focus on what can we do to maximize our ability to raise revenue and create revenue streams with the RV park.
Let's start with daily. Daily means someone pulls in with their RV, spend the night, pay you for a night, and they pull out. And there's nothing wrong with that, nothing at all. So if you've got an RV park catering to that kind of customer, when I say an overnight or an RV park, I'm talking about a place that's not a destination, people simply driving by spend the night there kind of like a Holiday Inn and then move on. There's another type of daily though besides that. Actually, there's two different types of daily beyond that. The first one is park models. These are units, typically around 400 square feet and smaller, that have been brought into the RV park to allow people who want to experience the RV park to not have to have an RV with them. And thanks to COVID a lot of people are crossing the nation no longer interested in hotels, wanting something a little more personal, something that's based more on the outdoors, willing to try something different. And also people don't like to fly as much as they did. Now you have many people who used to fly who are driving from point A to point B, and therefore they're willing to stop overnight along the way. So having parked models in your RV park gives you a second ability to get daily rent.
But then there's also a third way. There's a whole phenomenon right now in Airbnb called glamping. You can look it up on Wikipedia - it means glamour camping. It has foundations far in the past. I think it was in 16th or 17th century England that people started glamping. The royal family would put giant tents outside and move all of their regular stuff out in those tents just for change of scene. A lot of Americans now are attracted to glamping. Because again, they want to try something different. They're driving and not flying. And people are just kind of fascinated with the ideas of nostalgia and being outdoors. So there really are basically three types of daily revenue.
But let's move on now to weekly revenue. Now, even if you have an overnight RV park, maybe it's possible you can make it more than simply that. Maybe you can get people to stay not just for one night, but maybe several. Think how much better that is for your bottom line. That's tripling if you get them to stay three nights, tripling your revenue off that marketing dollar you're spending to get them to stop in. And of course a customer who's already there is a lot easier on you from a management perspective, much more efficient. So how do you do that? How do you get people to stay instead of for a one night, stay for a week?
Well, number one, you're going to create things for them to do. If you have an RV park that has absolutely nothing to do in it. Let's see what we can do to enhance that. Let's build some activities there. If you've got a lake or water feature, let's put in a fishing pier or fishing dock. Let's stock that lake with fish. Let's use the land efficiently to get people to want to stay one more night. It doesn't take much to do it. If you give them something attractive, they may say, "You know what? I'll spend one more night. Why not? I'm having a good time." And if you got people to do that, you'd be getting double the revenue for each customer. So a lot of times the difference between them spending one night in more than one night comes down to you as the owner. Are you providing them activities? Are there activities in the town surrounding you? Why don't you put together lists of things they can do? Why don't you put that on your website? Why don't you make a brochure or flyer for them when they get there and say, gosh, you know, I know you're on the way to your destination. Man. There are some fun things to do around here. That'd be a good way to go ahead and get those people to extend on. And number two, if you provide a good product and a positive attitude they're going to want to stay an extra night just to reward you for being a nice person, for giving them a pleasant experience. So many times you should think beyond the daily and say okay, well, daily is how I get them in the door. But how many days can I get keep them?
Now let's move on to monthly. Now, how do you get people to stay for a month? Well, for those who have destination RV parks, you know that many people do these days want to come and stay for prolonged periods of time. Not necessarily a month, not always a month. Stats show that many of the RV park users who go to the destinations want to stay roughly an average of about 14 days, that's half a month. But can you get them to stay a little longer? Perhaps you can. We're finding what's unusual is that our industry has been as attractive to millennials as it is to Baby Boomers. Now the millennials, they have jobs so they probably can't just spend prolonged periods in your RV park. But those boomers can. 10,000 of those are retiring per day. They no longer have that push to return. They don't have to be at work at 9 a.m. the next day. How do you get people to stay for a month again? Offer them a very, very pleasant experience, excellent customer service, cheery check in. Make sure the property is immaculate, give them plenty of things to do, and they aren't going to want to leave.
In fact, many of the boomers who are now retired and they're living in their RV parks crossing the nation in their retirement, they can stay for even longer. There is no time barrier. Not that many years ago, boomers weren't mostly retired, they were mostly employed. But as their biological clock kept ticking, they got older. And now suddenly, many of them are spending their lives basically on a perpetual vacation. And why not at your RV park?
Then let's move on to the final one, which is annually, the long haul, the extended stay. How do you get customers to stay for a lifetime? Well, number one, you have to have the right property because most people want to have access to some city services. Typically healthcare, retail, right? Also, you're going to have to have a property that's probably not seasonal, because it's a lot more attractive for someone to stay for the long haul or stay for years, if they don't have to deal with a severe winter with lots of snow and ice. So that would also help out in it. But a lot of it is just embracing the new changes in society. There are so many people who are electing to retire in their RV. So embrace those people, attract those people.
One way you can get them is to start being more embracing of the idea of tiny homes. You see them on HGTV every day, there must be three or four shows on them. A lot of Americans like this idea of living small and it's not just boomers, it's young people as well. What about setting aside a portion of your RV park, just for tiny homes? There's a property in Indiana I drive by frequently. That's what they've done. Turned out really, really well. They took one section of the RV park and they devoted it to tiny homes. And it's really nice looking. It's its own kind of neighborhood.
Another thing you can do, which we've done in our RV parks down the Texas-Mexican border is start importing more aggressively units in. They can be tiny homes or even they can be mobile homes and get people who want to stay who might be passing through, and see if you can convince them to buy your product there, your park model, your mobile home, whatever you've got there, and basically then sell off their RV and just stay forever. That's becoming a big deal. People are no longer wanting to travel from the north to the south seasonally once they retire, they just want to stay where it's warm year round. So why not help give them that option. A lot of people who would never put the pieces together on their own, they will if you do it for them. If you bring in that unit, get it set up and looking nice, nice deck on it. You'll be shocked how many people will say, "Gosh, how much is that again? Wow, that's a lot larger than what I'm in right now. And, man, I think maybe I could be happy just living here full time."
The bottom line to it all is think through your RV park kind of these days as a chessboard. There's a strategy to every lot, every section of your property. Don't be afraid to sectionalize it. You can say well, this section is for tiny homes, this section is for those who want to stay by the month. You use your greatest potential to increase your revenue, to shore up your revenue, to make it more stable. Because there's so many new options out there with RV parks that weren't there that long ago. So when you look at your lots be thinking okay, I know that mom and pop who I bought this from thought only as a one night stop. But I'm ending that practice. I want to get these lots filled as much as I humanly can. Every customer that comes in, I want them to stay as long as I humanly can. Everyone here for one night I want them to stay two, I want them to stay maybe three. Just be thinking what can I do to make this property have maximum revenue? When you start thinking that way and looking at all the options, it will really expand your ability to create the highest level of net income. This is Frank Rolfe, the RV Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.