KOA Leads Camping Industry by Example

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August 20, 2012 by   - () Leave a Comment

Click here to watch a brief video, courtesy of The Billings Gazette.

In days mostly past, a camper would walk into the wilderness, pitch a canvas pup tent and catch a string of trout for dinner.

In today’s era, some families pull into campgrounds in 40-foot custom RVs costing $1 million or more, pulling a trailer packed with four-wheelers.

They go camping expecting all the comforts of home: a store, a pool, bike rentals, outdoor movies on giant inflatable screens, pancake breakfasts and especially wireless Internet access so they can communicate with their Facebook friends via smartphones, play stations and laptops.

These two camping experiences share, well, mostly a campfire, the Billings (Mont.) Gazette reported.

Kampgrounds of America Inc. (KOA), a company born in Billings 50 years ago, has grown into the nation’s largest franchise camping business. It has survived by adapting and catering to cultural trends.

Pat Hittmeier

“What’s true of human nature, from my perspective, is the more you give people, the more they want,” said KOA president Pat Hittmeier.

KOA is celebrating its 50th anniversary this year, marking the growth from a handful of campsites south of the Yellowstone River to 458 franchises, plus 26 company-owned campgrounds. Sporting 1,000 employees, with 73 based in Billings, in some years KOA flies more people out of Billings Logan International Airport than any other local company.

When Jim Rogers proposed that the company move to Reno, Nev., after he was appointed chairman and CEO a decade ago, key executives declined to leave Billings, meaning their circle of contacts might leave with them.

“The franchise business is all about relationships,” Hittmeier said. “I think that became evident and that’s probably the biggest reason why it stayed here.”

Dave Drum, KOA founder

Somewhere to go

In 1962, Billings businessmen Dave Drum and John Wallace and two partners saw a chance to make money by catching and releasing some of the tourists driving by to the World Fair, whose trademark Space Needle still defines Seattle’s skyline.
Billings had no campgrounds, and city officials worried about people camping in the parks, paid to run city utilities down Garden Avenue to KOA’s first campground.

The partners guessed right. U.S. Highway 10 did become Interstate 90 and their first campground was located close to that commercial lifeline crossing Montana. Drum was the visionary and Wallace helped finance the concept. But, running and building the business was largely accomplished by chief executive Darrell Booth, who died of cancer in 1980, according to KOA archivist Jim Graff of Billings.

Over half a century, KOA has grown into a multimillion-dollar business owned by New York City billionaire Oscar Tang, who bought KOA after the 1979 oil crisis tanked the stock price.

Oscar Tang (left) and Jim Rogers

“It was a very attractively priced asset,” Tang told The Gazette in a Tuesday interview from his Fifth Avenue office in New York.

Tang has no plans to sell the company, but he wants to build a corporate headquarters someday on land KOA bought along Zoo Drive and move out of TransWestern III in downtown Billings.

“It’s a good financial business, and it’s the only national chain of campgrounds in the country,” Tang said. “That makes it attractive.”

Opportunity knocks

Twin oil crises in the 1970s left KOA with the largest national footprint, some 900 campgrounds, and that helped it survive after fuel prices made recreational vehicles look like “they were destined to be dinosaurs,” Tang wrote in 2002.

In the days of rapid expansion, farmers would buy a franchise, slap up KOA’s iconic A-frame building on some cropland and open what was nicknamed “dirt motel by the highway.”

Since that peak in the 1980s, KOA has sold off campgrounds and focused on improving the quality of the properties, including amenities and activities, so that families will return more often and stay longer. Today, only about 100 out of 484 campgrounds are still mostly one-night stops, Hittmeier said.

Many KOAs offer a less expensive place to stay in some prime tourist destinations like Cape Cod, the Florida Keys and Highway 1 along the Pacific Coast in California. The largest in Orlando, Fla., would make a town in Montana, with 900 camping sites and a river running through it.

The way Americans vacation has also changed, said Mike Gast, KOA vice president of communications. With both parents working and kids locked into summer activities, more families take extended weekend vacations closer to home.

“Nobody takes a two-week vacation anymore. They’re time-starved,” Gast said.

Interior of a typical KOA cabin

Building a brand

A Harris Poll conducted last year asked people if they had ever stayed at a KOA and 25 percent said they had, which is strong brand recognition, Gast said.

One of the changes at KOA is the addition of cabins, including deluxe cabins, for people who want the comforts of home without pulling an RV around.

Marv and Carol Linde and their children, who have run the Billings KOA since the 1970s, recently added two deluxe log cabins made in Boise, Idaho. The cabins are skirted to look permanent, but they are really RVs on wheels — park models — that can be moved around.

People want to play, then shower and have a real bed to sleep on, Dave Linde said, who runs the Billings KOA with his parents.

“What was OK 30 or 40 years ago isn’t anymore,” he said. “Tent campers make up 10 percent to 15 percent of our business, depending on the time of year.”

The Billings KOA relies primarily on overnight stops, he said, unless big events like the MontanaFair come along.

Dave’s brother, Steve Linde, is another second-generation owner who runs the KOAs in Bozeman and West Yellowstone, the local Super 8 Motel, plus an independent campground. His West Yellowstone KOA revenues peaked in 2007, dropped off about 2 percent during the recession, and now are recovering.

“Last year, we saw a lot of people just leave that wallet in their pocket. We’re finally seeing souvenir sales again,” he said.

The Lindes have made running KOAs a family tradition.

“It’s really been an ideal job. I couldn’t ask for more,” said Marv Linde about buying the KOA Billings campground in 1977 from Stella and James “Ziggy” Ziegler, who now own Stella’s Restaurant.

Adding pools and miniature golf is one thing. But keeping modern campers connected is a real challenge, especially on the edge of Yellowstone National Park, a world treasure and bucket-list destination for many people.

Most of Montana has 3G Internet connections, some spots have 4G.

“In West Yellowstone, we’re no G,” Steve Linde jokingly said.

That’s an issue for a campground that has 40 employees handling about 120,000 people a year.

A decade ago, an occasional camper wanted Internet and was often happy with a dial-up telephone connection, he said. Now everyone comes back from the park and wants to download scenic and wildlife photos on Facebook at the same time, Linde said. One family of four had 20 electronic devices with them.

“They want to hook up their smart phones inside aluminum-cased trailers on the border of a wilderness,” Linde said. “I’m at the end of the Internet pipeline.”

The main draw of camping remains the people factor, Gast said.

Campers choosing KOA over a motel want a taste of small-town America where the kids play unsupervised and strangers can still enjoy camaraderie around a campfire, he said.

“When you go and knock at the door at the Super 8 to introduce yourself to a neighbor, they call the cops,” Gast said. “It depends on what experience you’re after.”

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