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Northgate Resorts Enjoying Successful Formula

December 22, 2016 by   - () Leave a Comment

Caleb (from left) Zach and Greta

Northgate Resorts, a Grand Rapids, Mich.-based firm that owns nine RV parks nationwide — eight of them Jellystone Park Camp-Resorts — has enjoyed the type of return on investment officials had hoped for back when they entered the campground industry about four years ago.

And after seeing a 20% growth in overnight stays last year coupled with incremental revenue following the spring launch of Campspot, its proprietary campground reservation software system that is being implemented at all Jellystone parks system-wide, Northgate Resorts officials are expecting nothing but continued growth in the years ahead.

“For same-park growth, we’ve averaged 20% per year for the last three years. Though this year isn’t complete, we expect to be at around 20% increase for 2016,” said Chief Executive Officer Zach Bossenbroek.

Northgate Resorts, a division of Northgate Partners LLC — which itself is a primarily real estate development firm that traces its roots back to the 1990s — has come a long way in a short amount of time. It was founded in 2012 after having been involved in an investment in the Jellystone Park in Caledonia, Wis. While Northgate’s involvement was as a minority, passive investor, Bossenbroek said, it was the company’s first contact with RV parks and management quickly latched onto the revenue opportunity the resort campground industry presented. Shortly thereafter, the Northgate Resorts division was launched.

Westward Shores

Northgate Resorts started with four park acquisitions within its first year and now counts nine properties in its portfolio and expects to add two more parks by the year’s end. All but one of the nine properties — Westward Shores Cottages & RV Resort in West Ossipee, N.H. — are Jellystone properties, which accounts for about 10% of Leisure Systems Inc.’s Yogi Bear franchises. The Jellystone properties are located in popular destination areas including: Canyon Lake, Texas; Hagerstown, Md.; Quarryville, Pa.; Luray, Va.; Gardiner, N.Y.; Memphis, Tenn.; Lodi, Calif.; and Kerrville, Texas.

Across the portfolio, Northgate’s camp-resorts have a combined 2,202 campsites, of which 442 are cabins, for an average of 245 campsites and 49 cabins per camp-resort. The largest property is the Jellystone Park in Lodi, Calif., at 362 sites, while the Jellystone Park in Quarryville, Pa., has the most cabins at 86. The Jellystone Park outside Memphis has the fewest campsites at 155, and Westward Shores has the least amount of cabins with just four.

The company’s success, Bossenbroek said, is due to a winning formula that includes deeply mined data research, a team effort at every level and just good old-fashioned hard work.

“We’re also benefiting from a rising tide — that tide being a shift by consumers away from clothing, auto and housing spending toward experience and vacation spending. This is especially the case with Millennials. Our resorts will continue to benefit from this shift in consumer spending,” he said.

A Big-Picture View and Support at the Corporate Level

There are about 30 people working in the fashionable loft-style corporate office, which is in a century-old, four-story former furniture factory featuring wooden floors, brick walls and exposed rafters. Duties handled at the corporate level include accounting, marketing and high-level operations and support staff. Additionally, about eight or so staffers work with Campspot, the campground reservation software system.

Besides Bossenbroek, other key senior management executives include Director of Operations Greta Bossenbroek – she and Zach are siblings – as well as Caleb Hartung, who serves as the chief data officer for Northgate Resorts and the chief executive officer for Campspot.

Zach Bossenbroek said he sees the corporate office as “an extension of the on-site staff” that’s meant to provide support more than oversight. Also, since on-site managers typically are overwhelmed with day-to-day responsibilities, the corporate office can better see “the big picture.”

Hagerstown Jellystone Park

Greta echoed those sentiments, adding that she experienced it firsthand when she spent six months last year as the temporary general manager at Northgate’s Maryland Jellystone location.

“Even though I had the background in operations and know the reporting duties and other processes that were really important to operations, I wasn’t really able to take the time to focus on bigger-picture items because I was so busy and focused on the day-to-day management of the park. Between addressing customer complaints and managing staff, you’ve got 120 people coming to you with questions all day long. You don’t have time to think about how rates might be affecting certain things or how to improve your ancillary income,” she said.

That’s why Northgate performs certain functions at the corporate level — but only if they present certain efficiencies such as marketing, as Zach explained, since a successful advertising campaign or social media initiative can be “replicated quite easily across each one of the properties.”

Likewise, accounting, closely aligned with data analysis, is another function performed at the Grand Rapids office. Northgate Resorts is heavily data-driven, and having accounting functions and data analysts in the corporate offices provides immediate access to data-rich reports, which the team uses to help make decisions — sometimes on-the-fly, such as adjusting rates for a coming weekend.

“If you were to poll campground operators, I think one of the things you find is they would say they don’t have a clue how to set rates. Or they might say ‘I don’t know until the day of whether I’m going to fill my grid or not for a particular period of time.’ These are key things that are essential to know,” Zach said. “For example, if in April I want to know if I’m going to be able to fill my grid for July? We have data that helps us answer that question ahead of time. We have enough data as of now at this time of year to make really good decisions on what our rates need to be for next year, based on the demand that we saw, and we can take it all the way down to the site level.”

It’s important to have data at that level of detail, Zach maintained, because it can help determine why one site is more popular than others, which allows the company to improve other sites accordingly. Also, it stands to reason that if a site is more in demand, then it should command a higher rate.

“You’re not selling homogeneous hotel rooms. These are very different sites with each commanding a very different price. We get into the weeds in this office quite a bit when it comes to rate setting, and strategies for marketing and filling the grid,” Zach said.

Data Optimization with Campspot

So what information is most important to Northgate? Greta answered that one key topic would be labor since it’s their biggest variable expense. Typically they will compare the labor schedule at a particular property with the number of site reservations to make sure staffing levels are appropriate to the amount of guests.

“I’m also looking at Campspot a lot,” she added. “Today I looked at our Halloween bookings for next year. We already have one park that’s filling up nicely for next year, so that will help determine our rates going into next year.”

Launched this spring, Campspot was developed by Northgate, in part, because it provided a wealth of data all the way down to the campsite level. More importantly, Hartung said, Campspot’s advanced reservation engine and customizable business rules “work in tandem to optimize your grid and fit in as many reservations as possible.” Also, add-on amenities such as golf cart rentals and campsite lock-in fees have garnered tens of thousands of dollars in revenue per park this year, Hartung said.

“Part of Campspot’s core features is actually being able to go in there and tweak those business rules at any time. We’ve already tweaked our rules several times this year,” Hartung said, explaining that, for example, a manager could override a rule preventing Saturday arrivals. “As you approach that weekend, maybe you change that to allow that last-minute guy to do that. And it’s very easy to just go into Campspot and tweak that.”

Team-Effort Operations at Properties

While the parks’ staffing levels range in size from as few as 60 to more than 120, each property has a general manager and several department managers overseeing such areas as reservations, housekeeping, and maintenance, and each has staff underneath them. The majority of each property’s workforce is seasonal, though the general manager and department managers are full-time employees, along with maintenance and reservations personnel.

Jellystone Park in Kerrville, Texas

General managers are in weekly contact with Greta on various topics, such as whether housekeeping scheduling is commensurate with reservations. In turn, the GMs have weekly meetings with their staff, usually with the department heads, who will go over the operational game plan for the week. The entire operation is very much a team effort, she said.

“We also try to get out to every park every two months to review a very comprehensive list such as pending projects, staffing or anything else that we’ve noticed on a site visit,” Greta added. “We have a weekly call, and I’ll text with them and email them all the time. We try to keep it light-hearted so that it’s really a team effort because without them we are in big trouble. We want to make sure that they’re feeling good about things and feeling supported by us when they need it.”

Each Northgate property employs similar tactics when it comes to key issues universal among all campgrounds everywhere.

Cleanliness and park appearance is a huge priority, and one “where all of our general managers understand quite clearly our perspective,” Zach said, “because right from the beginning we made it very clear these properties have to look amazing. We are competing with places like Disney World – that’s how we see it.”

As far as labor, Greta readily admits that finding a seasonal workforce every year is difficult. Job fairs help, and character traits — outgoing personalities being one of them — are preferred attribute of applicants. Furthermore, once a promising employee is discovered, they are quickly moved up the ladder.

With regard to Wi-Fi, Northgate elects to have a single hotspot in a common area rather than high-speed bandwidth throughout the parks. The money that the company would have spent on Wi-Fi instead goes to recreational amenities, which Zach said is the main reason people choose their properties.

Gardiner, N.Y., Jellystone Park

And, speaking of recreational amenities, most Northgate properties have a water park or at least a pool, as well as laser tag, jumping pads, miniature golf, Gaga Ball and playgrounds, among other things. The laser tag is a revenue source as its equipment is available for rent.

“We also just added an Adventure Ninja Course at our park in Maryland,” Greta mentioned. “It’s fashioned after the ‘American Ninja Warrior’ TV show. It’s a two-lane obstacle course so you can race the person next to you. You race through the course, which includes things like monkey bars and a part where you have to jump on the trampoline and at the top of your jump you have to grab onto these bars. It’s just like the show.”

Bottom line: While Northgate Resorts may initially have been attracted by the earnings potential, as Zach said, the resulting success is due to a winning formula that includes a team of driven professionals at every level who are intent on delivering a vacation experience that rivals world class resorts.

“With all of the new amenities we like to add for our campers’ enjoyment, we look forward to 2017 being another fantastic year for our camp-resorts,” Zach said.

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