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Gorin: Chinese May See U.S. as ‘Learning Lab’

October 4, 2012 by   - () Leave a Comment

David Gorin

Editor’s Note: David Gorin, former ARVC CEO, is president of David Gorin & Associates, providing management consulting services to the outdoor hospitality industry. He is also a partner in King & Gorin, specializing in Washington representation for associations and businesses in travel, tourism, transportation, recreation and public lands. Contact him at dgorinassociates@aol.com or (703) 448-6863.

One of the current buzz words in vogue these days is “glamping” – camping with a touch of glamour, or over the top tents with four poster beds, fancy linens, fine furniture, tent service and so forth all in a dressed up platform tent in a beautiful outdoor environment.

Recently in a small article on words and language in the Wall Street Journal in late August comes the newest terms to go along with glamping.

Where do you find glamping accommodations? In a glampsite of course. And at night where do you make your evening s’mores? Around the glampfire, where else?

Now here are my new terms … are glampsites found in glampgrounds? We camp… do we glamp? Is your camp store now your glamp store? And are camping cabins now glamping cabins?

And what’s the difference – other than price – of a luxury RV or campsite and a glampsite?

Chinese Investment in U.S. Parks

During August, the park trade media carried two articles about two companies attending a camping and RVing show in China. Bow Stern, a marketing communications company based in Tallahassee, Fla., and the Kidd Group Public Relations, also coincidentally in Tallahassee, both made presentations about the U.S. RV park industry at what appears to be the same RV show. Both companies reported strong interest among Chinese investors interested in investing in the U.S. RV park market.

While it might mean some good business and consulting fees for companies pitching the U.S. RV park business to Chinese investors, it’s important to keep one thing in mind – interest among Chinese investors in the U.S. market doesn’t make any fundamental changes to the U.S. RV market for either the parks or the RV industry.

The economics of a park business, the feasibility of success of any project in the U.S. is not at all determined by where the money comes from or how much the developers invest in the project. Perhaps Chinese or other investors may accept a higher level of risk and may be willing to roll the dice and bet that they can change the market or ride out a lengthy period until the market changes. And maybe these investors can bring new park products to the market that RVers and others looking for great outdoor experiences will find attractive, but the bottom line is still the same: if you build it, will they come? And can you build it at a price that makes financial and economic sense?

Maybe Chinese investors will offer exit strategies for large multiple park owners who would like to sell their properties in a package. And maybe some group of Chinese investors will attempt to acquire a large number of U.S. parks to compete with the current big operators. And maybe one or several Chinese investors will put their toes in the U.S. park market by investing in a new, large U.S. park development (maybe like the one proposed for Cape Coral, Fla., and the subject of a number of trade releases). And maybe they will be willing to pay premiums to gain a foothold in the U.S. industry.

These are all maybes. Frankly, I’m not expecting much in the way of Chinese investment in the U.S. park market and if some investment does materialize, I don’t see it having significant impact on the building of new parks and the sale of existing ones. In the end, I think the industry’s too small to excite many Chinese investors with tens or hundreds of millions or more of capital to deploy.

I only hope that if Chinese or any other international investors come to the U.S. market, they come with a background in hospitality and lodging, outdoor recreation and guest services. The last thing the park industry needs are park owners who are not grounded in these skills and areas of competence and who think money can buy success. While operating parks is not the equivalent of practicing brain surgery or nuclear physics, it does have its own unique features and expertise that determine success.

I’ve heard and read about and even met some Chinese businessmen who see great opportunities for the development of an RV and camping industry in China and no doubt a great opportunity exists there. Why else would the RV Industry Association open an office in Beijing? There may be great opportunities to joint venture and work with Chinese businessmen to build RVs in China and to build campgrounds there. I’ve heard that the Chinese planning calls for the establishing of some 5,000 campgrounds in China in the next some number of years. Maybe some Chinese investors will try to use the U.S. park market as a laboratory for learning before going back home to China to jump into the business there.

RVIA Destination Camping Committee

As a longtime member of RVIA, I was pleased to sit in on the first meeting of RVIA’s Destination Camping Committee. Following the meeting, I volunteered to serve on the new committee and I’m pleased about being accepted as a member, joining KOA’s Mike Atkinson who was the sole campground representative on the committee.

The committee will be meeting in October to review the results of the first survey being conducted to get an idea of how big the destination camping market might be. Being conducted by Precision Research, an Arizona-based firm that has done previous work for RVIA, they are surveying 400 RVers and 400 non-RVers to try to get a sense of the market. While this survey is very limited in scope, it’s a start and may provide at least some base of information about how consumers view destination camping.

At the first meeting of the committee, there was, if I recall, considerable discussion about terminology – the difference between destination camping and seasonal camping. As far as I know, in the park industry these terms are basically interchangeable. Park owners know what the terms mean – RVers or campers who put an RV of one kind or another on a campsite for an extended period and either stay for an extended period or return frequently to use the unit.

There is a different but similar term – “destination campgrounds” – those campgrounds that are destinations in and of themselves because vacationers set out specifically to visit a particular park or campground. Destination campgrounds are typically parks for leisure travelers and vacationers, as opposed to destination camping where the accommodation is fixed and the consumer returns repeatedly to the same location.

One thing the new committee will need to address is how destination camping and destination camping units are regulated. Unlike traditional RVs, fixed units that aren’t obviously mobile are most likely to be subject to local regulation and there is little uniformity among jurisdictions. Type of unit, type of hook-ups, taxation, code compliance, length of stays, utility issues, etc. are all generally regulated on the town, county or perhaps state levels. It is the local regulation that is often the challenge for the park owner wishing to add, maintain or expand destination or seasonal camping.

I look forward to participating in this new committee. As the world’s changed over the last 5 years or so, destination camping has taken on a new meaning for the future. Is the trend for real? Is it sustainable? Is it a reaction to recent economic and energy issues? What future form will destination camping units take? What happens to the RV park industry if RV sites are converted to seasonal or destination camping? Are parks moving toward the hospitality industry rather then the RV industry?

If any readers have any comments or suggestions about this subject for this new committee, feel free to email me at david@davidgorinassociates.com and I’ll be happy to convey your views.

August School Starting Dates

Over the years, whenever the discussion of pre-Labor Day school openings came up, the response of the park industry and others in the tourism business, who were opposed to these mid-August openings, was that when there are educational benefits to summer openings, the tourism and attractions industry would have to reconsider its opposition.

Now what seems to be developing is this: while extending the school year is difficult because of teacher contracts in just about every state, starting the school year earlier allows students and teachers more time to prepare for standardized tests that usually take place before December. Starting school around Aug. 15 adds two to three weeks of instructional time before the testing later in the fall. Educators and parents feel that their students need the additional time to be properly prepared for the tests.

This change to earlier opening dates is going to be harder and harder to challenge in the future. With parents and educators on the same side of the table, it’s not going to be easy to adhere to the post-Labor Day opening schedule.

In Virginia, during the 2012 legislative session, the Virginia house and senate debated a local option school opening bill. The bills were defeated and the post-Labor Day school opening date is still the law throughout Virginia. I wonder how much longer the tourism and attractions industry will be able to persuade legislators on this issue.

So, more and more schools are moving to mid-August openings to gain the extra instructional time and schools are closing earlier so that the total number of class days remains unchanged in almost every case.

Can the park industry adapt to this changing pattern? Should parks begin to start their peak season activities and pricing in early June or maybe starting with Memorial Day? Should shoulder or off-peak now begin on Aug. 15?

What do you think? Should the park industry continue to fight this battle? How can the industry adapt to a more universal August school opening date?

 

 

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