Monaco Coach Corp. Rebrands Resorts
If you build a multimillion dollar recreational vehicle resort, but gas costs more than $4 a gallon, will anybody show up?
Coburg-based Monaco Coach, one of the world’s top manufacturers of motorhomes, is banking on it, according to the Daily Journal of Commerce Oregon, Portland, Ore.
Monaco announced this month the formation of Signature Resorts to manage and develop the company’s RV resorts. Previously, Monaco had developed RV resorts in places such as Indio, Calif., and Las Vegas, Nev., under its own name. But Signature Resorts will now act as an offshoot of the 40-year-old RV company.
Monaco’s next two developments – in Harbor Bay, Mich., and Naples, Fla. – will open up under Signature Resorts’ branding.
Featuring a tennis court, a putting green, a clubhouse, an outdoor pool and a spa, Harbor Bay will roll out at the end of the summer. The resort in Naples will follow.
Monaco hopes the resorts will help financially polish what has been a tarnished year so far. First-quarter figures show a company hit hard by high gas prices and weakened consumer confidence.
First-quarter revenue for the coach company in 2008 was $252 million. That’s compared to $322 million for the first quarter of 2007. Gross profit also dropped by more than 50%, from $36 million a year ago to $15 million this year.
Plummeting consumer confidence was to blame for the first-quarter losses, the company said in April.
Presented with the first-quarter figures, Monaco Coach CEO Kay Toolson promised changes to the company, including layoffs and a refocusing of corporate energy, in a written statement to shareholders.
Monaco Coach’s RV resort segment was not immune to market deviations during the first quarter of 2008 and saw a 66% drop in revenue, from $7.2 million in 2007 to $2.4 million.
Monaco Coach blamed the downturn on a lackluster real estate market. Still, the company remains confident of its “if you build it, they will come” philosophy.
Craig Wanicheck, Monaco’s director of investment relations, said the RV resorts were not profitable during the first quarter due to a smaller inventory of available units. The two new developments are intended to add more inventory and make Signature Resorts more profitable next year.
“What we should have done (a couple of years ago), was develop another resort to have a consistent revenue stream for this segment,” Wanichek said.
Gregg Mindt, president of the Oregon Lodging Association, said that if RV owners are driving fewer miles to cut down on gas consumption, then smaller, more localized RV resorts may benefit.
In Oregon, he said, parks such as Mt. Hood RV Village or Pheasant Ridge in Wilsonville could see increased business because RV owners will want to stay closer to home, paying less for gas in the process. They may also want to stay at one resort longer, instead of moving around.
Signature Resorts’ president, Randall Henderson, agreed with that assessment. And it’s partially for that reason that Signature Resorts plans to develop resorts in the Florida Panhandle and the Texas Hill Country, to spread out and diversify the company’s real estate holdings.
“It would be nice to have nearby facilities,” Henderson said. “It’s not necessary, just because you have an RV, to be totally nomadic.”