Heartland Recreational Vehicles LLC and Breckenridge today (July 24) announced the formation of a reciprocal partnership between the companies designed to maximize sales and increase market share in the growing park model and destination trailer segments.
The collaboration, set to go into effect Aug. 1, will merge Breckenridge’s reputation as a respected, quality-oriented manufacturer with Heartland’s oversight and management expertise. According to a press release, the firms will continue to operate as stand-alone divisions of Thor Industries Inc.
As part of the move, Heartland President Chris Hermon will also serve as president of Nappanee, Ind.-based Breckenridge. Hermon reported that the companies would build product year-round from dedicated manufacturing and service facilities “that would cater to the destination trailer segment.”
“Dealers will be able to order product any time during the year,” he said, noting that Heartland currently sells two destination trailer brands. “That will set us apart from other manufacturers that only build a few times a year. Dealers will be energized to work with companies committed to this product segment."
Hermon emphasized that the partnership would be a “very symbiotic” arrangement.
“We have a lot to offer Breckenridge in terms of leadership, support and direction while Breckenridge has a lot to offer in product, manufacturing and a deep loyal customer base,” he said. “By combining forces, Breckenridge will become even stronger and continue to be a leader in the park model and destination trailer markets while Heartland will be able to grow its destination trailer business.”
Breckenridge was founded in 1991 by Tim Howard, who retired in February of 2012. The company has been a forerunner in the industry and currently offers a full complement of products to meet emerging demands.
“Breckenridge has very strong brand recognition with consumers,” said Hermon, who joined Heartland in May of 2012. “Our focus will be to apply our proven business model to build business for Breckenridge and Heartland. We are putting plans and resources in place to double sales and market share in the segment in the upcoming quarters and become the No. 1 producer in Elkhart County of park models and destination trailers.”
Hermon added that Heartland, which is enjoying a record-setting year, has a successful track record for bringing product to market and quickly growing market share.
“Our top priority is giving retail buyers the products they want and giving dealers the credible front- and back-end support they need,” said Hermon. “Our marketing and operational experience will be a perfect fit for Breckenridge.”
Hermon reported that plans are to roll out new products and programs as part of the Elkhart County RV Open House, set to run in late September.
Editor's Note: The final portion of the park model, cabin and yurt presentation in the February issue of Woodall's Campground Management appears below.
Athens Park Homes LLC
2013 Focus: Athens Park Homes is ramping up its park model construction across the country following its July 2012 acquisition by Troy, Mich.-based Champion Home Builders, which operates park model manufacturing facilities in Chandler, Ariz.; Weiser, Idaho; York, Neb.; Athens, Texas; Sangerfield, N.Y.; Lillington, N.C.; and Lake City, Fla. “Right now, pretty much all of the plants have built one or two models,” said Dick Grymonprez, Athens’ director of national park model sales. He said the variety of manufacturing plants across the country will help Athens offer more competitive prices to private park operators and consumers. “We had shipped to 37 states before the Champion acquisition,” he said. “But now we’re able to build the Athens Park brand closer to where the user is. We’re also able to buy materials at better prices because of Champion’s buying power, so we can build park models for less money.”
Background: Athens Park Homes was founded in September 2004 by a group of investors spearheaded by manufactured housing veteran Phil Surles, who was a former COO of Troy, Mich.-based Champion Enterprises, the parent company of Champion Home Builders.
Management: Phil Surles, president
Contact Information:3401 Corsicana St., Athens, TX 75751; (903) 677-0108; fax (903) 677-0118; www.athensparkhomes.com
Dutch Park Homes Inc.
2013 Focus: Dutch Park signed up several new dealers at the Louisville show and is expanding its reach across the country. “We think we have the best fit and finish and quality in the park model industry,” said sales manager Larry Weaver, adding that the company is continuing to make “fit and finish and quality” its focus areas in 2013 along with a stepped up marketing of its rental products to campgrounds.
Background: Dutch Park Homes was founded in 1999. Omer Kropf purchased the company in October 2003. The company recently relocated to a different manufacturing facility in Goshen, about a half-mile from its original plant.
Management: Kermit Kropf, president
Contact Information: 2249 Lincolnway East, Goshen, IN 46526; (574) 533-8090; fax (574) 533-8210; www.dutchpark.com
2013 Focus: Breckenridge is stepping up its production of rental units for the campground industry. “We’ve been a partner of KOA (Kampgrounds of America Inc.) and LSI (Leisure Systems, Inc.) and we’ve sold our share of rental products to those companies. We also do quite a bit of business with independent campgrounds,” said Bob Phillips, Breckenridge’s general manager. He said production of rental units for campgrounds is a good way to help private parks broaden their business base, while also introducing consumers to park models. “If we can get folks interested in going to campgrounds and spending time in rental units, some may make an investment in park models as a second home,” Phillips said. With this in mind, Breckenridge is continuing to develop even more luxurious interiors.
Background: Tim Howard founded Breckenridge on Sept. 23, 1991, as a stand-alone division of Damon Corp. with about eight to 10 employees, several of whom had worked with Howard at Mallard Coach Corp., another Nappanee park model company. Breckenridge continued to operate as a Damon division until Thor Industries acquired Damon in 2003. Howard retired Feb. 1, 2012. Bob Phillips, whom Howard hired as his first employee, now manages the company. “I was his director of engineering for 19 years,” Phillips said.
Management: Bob Phillips, general manager
Contact Information: 656 North Delaware, Nappanee, IN 46550; (574) 773-5353; fax (574) 773-2124; www.breckenridgefinerliving.com
Cavco Industries Inc.
2013 Focus: Cavco is continuing to position its product innovations with several soon-to-be-announced park model products that will be industry firsts. “I think innovation is what has kept Cavco in the game,” said Tim Gage, Cavco’s national vice president of park models, cabins and specialty products. “We’re being really innovative on working with the new developers of campgrounds or resorts, whether it’s on the East Coast or West Coast. We’re creating some awesome exteriors and concepts that keep us one step ahead. The interest continues from developers and campground owners with requests for larger volume weekend getaway cabins and cottages. People seem to be staying close to home and want above-average accommodations.”
Background: Cavco started producing park models in the early 1990s and began offering cabins and cottages in 2001. Cavco continues to be an industry leader and has continued to grow its market share and competitive edge by acquiring other companies, including Palm Harbor Homes, Fleetwood and Nationwide Homes, which provide Cavco with the ability to produce park models in every region of the country. Cavco currently produces park models in Phoenix and Goodyear, Ariz.; Seguin, Texas; Nampa, Idaho; Woodburn, Ore; Rocky Mount, Va.; Martinsville, Va.; Riverside, Calif.; Millersburg, Ore.; and Plant City, Fla.
Management: Tim Gage, national vice president of park models, cabins and specialty products
Contact Information: 1001 N. Central Ave., Phoenix, AZ 85004; Phone: 602-763-5488; fax (623) 882-2845; www.parkmodels.com, www.cavco.com and www.fleetwoodparkhomes.com
Chariot Eagle Inc.
2013 Focus: Chariot Eagle has introduced a series of 8½-foot-wide park models with slides that have proven to be very popular as rental models, said Joe Follman, the company’s sales manager. Chariot Eagle has also included even more optional items in their models as standard equipment, including marble windowsills, night stands with overhead cabinets above the bed, new extended drawer guides and space saver microwaves. Chariot Eagle has also expanded its usage of tape and textured residential finishes at new competitive prices in their 2013 models.
Background: Robert Holliday founded Chariot Eagle in June 1984 with five employees and subsequently built it into one of the larger park model manufacturers in the country, with manufacturing operations at its headquarters in Ocala, Fla., and at its sister plant, Chariot Eagle West, in Phoenix, Ariz., which it opened in 1995 to service the West Coast market. Both plants build the same types of products, although their floor plans vary and architectural styles vary to reflect regional architectural tastes in exterior design. Chariot Eagle specializes in customized park models and has developed more than 650 different floorplans.
Management: Robert Holliday, president
Contact Information: 931 NW 37th Ave., Ocala, FL 34475; (352) 629-7007; fax (352) 732-0026; www.charioteagle.com. For Chariot Eagle West, 8100 W. Buckeye Rd., Phoenix, AZ 85043; (623) 936-7545; fax (623) 936-7012; www.charioteaglewest.com
Fairmont Park Trailers
2013 Focus: Fairmont Homes’ Park Trailer division is stepping up its involvement in the park model rental business, having introduced a new rental unit at the ARVC Outdoor Hospitality Conference & Expo in November, which generated significant interest from private park operators. “This is our first concerted effort to get into the rental market,” said John Soard, Fairmont Homes’ general manager. “We’ve got the ability to do higher volume building so we can be more efficient for dealers and campgrounds with rental products.”
Background: John Soard spent 20 years with Breckenridge and Woodland Park before joining Fairmont Homes in 2005 to run the company’s park trailer division. Fairmont Homes had been in the park model business back in the late ’80s and early ’90s and exited the market in 1994 to focus mainly on housing. But the company re-entered the park model market in 2005 when Soard joined the company as general manager. He said Fairmont Homes uses its housing expertise to build more durable and livable park models. The company has been expanding its market share in recent years.
Management: John Soard, general manager
Contact Information: 502 S. Oakland Ave., Nappanee, IN 46550; (800) 777-8787; fax (800) 865-2294; www.fairmontparktrailers.com
Forest River Inc.
2013 Focus: Forest River is conducting a major overhaul of its park model products. “We are in the midst of the biggest series of product changes in several years,” said account manager Gary Duncan, adding that the company has introduced four new floorplans and expanded its offering of wood colors, cabinet designs and window treatments. New kitchen backsplashes and hidden hinges for cabinets were introduced. Kitchen cabinet and pantry shelves are now adjustable. Countertop choices were expanded. Pullout trash cans and pull out pantries are now featured in most floorplans. New window treatments feature hard valances and give a more upscale look. Accent furniture has been updated. Interior doors are also now stained to match the cabinets. On the outside, new vinyl siding colors were added. Shutters have been added to entry doors and loft windows. Duncan said the changes have been well received. “We had an extremely good show in Louisville,” he said. “We signed up several new dealers, primarily as a result of the product changes we made.”
Background: Peter J. Liegl founded Forest River in January 1996 with an initial product lineup that included towable RVs and park models. Acquired by Berkshire Hathaway in 2005, Forest River has continued to expand its product line, which now includes motorized RVs as well as restroom trailers and mobile offices. Its park model products are certified green and are manufactured in the Quail Ridge, Summit, and America’s Park Cabin model lines. A floorplan for the physically challenged is also available.
Management: Jim Foltz, general manager
Contact Information: 28936 Phillips St., Elkhart, IN 46514; (574) 264-7163; fax (574) 264-7364; www.forestriverinc.com
H L Enterprise Inc.
2013 Focus: H L Enterprise is focusing on expanding its dealer network of independent retail dealers including many campground owners. H L offerings provide flexible floorplans rather than the typical “cookie cutter” approach most often seen in the industry, according to Peggy Flager, H L Enterprise president and co-owner. “We are able to give our customers more of what they want and accommodate specific needs, including those involving limited mobility” she said.
Background: With over 100 years of combined RV industry experience, including the establishment of the original Hyline in 1986, owners Peggy Flager, Charles Ragland and Randy Hoff started H L Enterprise Inc. with the purchase of assets and the right to manufacture the Hyline product in January 2011. Product lines were broadened with the subsequent purchase of assets of Bridgeview Manufacturing and a portion of Discover Canada. The result is the current line-up of Hyline, Bridgeview, Georgian Bay and Harborview models.
Management: Co-owners Peggy Flager, Charles Ragland and Randy Hoff and General Manager Steve Stone
Contact Information: 21674 Beck Dr., Elkhart, IN 46516; (574) 294-1112; fax (574) 970-1303; www.hlenterpriseinc.com
2013 Focus: Pacific Yurts continues to expand its business in both domestic and international markets. “Our custom-curve window has been quite popular,” said company President Alan Bair. “It has a patent-pending design integrating a thermal pane window and beautiful curved wood frame, making the yurt more energy efficient.” Bair is also seeing growing demand for larger yurts. “Our customers are adding kitchenettes and bathrooms and more interior amenities. The “glamping” trend continues,” he said.
Background: Pacific Yurts was established in 1978 as the original manufacturer of the modern yurt. Pacific Yurts is the largest yurt manufacturer in the world with most of its sales taking place in the U.S. and Canada. However, the company also sells significant numbers of yurts to customers in Europe and Asia. International sales account for about 5% to 10% of Pacific Yurts’ business, but international sales are growing, according to Bair.
Management: Alan Bair, president
Contact Information: 77456 Highway 99 South, Cottage Grove, OR 97424; (541) 942-9435; fax (541) 942-0508; www.pacificyurts.com
Pinnacle Park Homes
2013 Focus: Pinnacle Park Homes is expanding its offering of floorplans for its cabin rental products this year. “We took input from campground owners and are tweaking our floor plans,” said Terri Stewart, co-owner of Pinnacle Park Homes. “Our cabin rental line has done very well for us.” Pinnacle Park Homes has also established new lender relationships, which it shares with campground operators who need financing for their park model purchases. “Financing is still tough, but we keep building relationships with people,” Stewart said.
Background: Founded in 2003, Pinnacle Park Homes offers numerous park model floorplans with vinyl, Hardiboard, cedar or log exteriors. In addition to producing park models with vinyl and rustic exteriors, Pinnacle Park Homes produces the Lighthouse series of floating cabins, which are park models constructed on a floating device. The company also offers ADA compatible and ADA compliant park models based on campground needs and requirements.
Management: Terri Stewart, co-owner
Contact Information: 26488 GA Highway 3, Ochlocknee, GA 31773; (229) 574-5159; fax (229) 574-5184; www.pinnacleparkhomes.com
2013 Focus: Skyline is having market success with new park model designs that include drywall interiors, which can be more easily repaired than damaged wood paneling. This feature is of particular interest to campground operators who use park models as rental accommodations. “This past year and a half we’ve gotten the product where we wanted to get it,” said Terry Decio, Skyline’s vice president of sales and marketing, adding that the company had very successful trade shows in Elkhart, Ind., and Louisville, Ky. Its rental product line, initially launched through a partnership with ARVC, is gaining traction in campground industry.
Background: Skyline is a diversified company that produces travel trailers and fifth-wheels as well as manufactured homes and park models. Its park models include both 8½-foot-wide and 12-foot-wide units. Skyline has been building park models since the early 1980s. It currently manufactures park model rental units in five factories across the country, including Hemet, Calif.; McMinnville, Ore.; Lancaster, Wis.; Ocala, Fla.; and Leola, Pa.
Management: Kevin Garthus, national product manager
Contact Information: 2520 By-Pass Road, Elkhart, IN 46515; (800) 755-6521, fax (574) 294-6521; www.skylinecorp.com and www.skylinepm.com
Editor's Note: The following story is excerpted from the February issue of Woodall's Campground Management. Later this week, www.woodallscm.com will report in further detail trends in the park model, cabin and yurt industry and provide comments from the nation's leading builders of these covered shelter products.
This year might be the year that the recreational park trailer industry snaps out of its multi-year slump.
At least that’s what the major manufacturers are hoping for and telling Woodall’s Campground Management (WCM) for its annual park model, cabins and yurts issue. And to what extent the nation’s campgrounds bolster their covered shelter inventory will go far in determining the success these OEMs experience in 2013.
The major campground chains, Kampgrounds of America Inc. (KOA) and Leisure Systems Inc. (LSI), each reported a hearty demand for covered shelter in their parks in 2012, which encouraged the park model OEMs as they begin to fill the pipeline for 2013. KOA said deluxe cabin rentals, a key point of emphasis right now, was up more than 20% in 2012 with registration revenues growing 19.5% higher than in 2011.
LSI reported that rental unit revenue rose 17% in 2012 from 2011. Double-digit growth has been recorded the past three years.
“Some people (parks) are not really taking advantage of this,” LSI President Robert Schutter said late in the year. “This is an area that we can exploit for many years. We have not maxed out.”
Builders are taking a variety of steps to grow their market share in both the campground and retail marketplace.
Industry leader Breckenridge, a division of Thor Industries Inc., the RV industry’s No. 1 manufacturer, is stepping up its production of rental units for the campground industry. The company, which captured more than 25% of the retail park model market in 2012, has taken many steps to broaden the appeal of its 12-wide Extendable and Perfect Cottage series, explained Bob Phillips, general manager of Nappanee, Ind.-based manufacturer, which is a preferred provider for KOA and LSI, two of its two largest customers.
“What we're trying to do is anchor the market we’re in,” said Phillips. “Breckenridge has always been a leader in the 12-wide market. I don't think we're going to venture much outside that.”
In its Extendable Series, the company has adopted a full fiberglass front cap and tried to make a lot of the former options now standard, he explained. Color schemes have been changed.
In the entry-level Fine Line Series, three new floorplans are geared more to families and first-time buyers and are more economical, he said.
A lot of former options are now standard in the Perfect Cottage series. New features include wholehouse vacuums and heavy-duty, pullout kitchen spray faucets and softened interior color schemes.
“A number of campground dealers should be excited about that product (model),” he said.
In the last three years, Breckenridge has become more serious about its campground rental units, Phillips said. He termed that market “a different beast” from the retail market and said the company has attempted to shore up this market.
Breckenridge also offers a rental unit it has “hardened” for the demands of campground users. “For a rental product, it’s very bullet-proof for a campground,” he said.
Phillips said Breckenridge is proud of its No. 1 position in retail registrations and welcomes the competition. He said those builders gaining market share with Breckenridge are doing so in the 8 ½-wide market.
“We want to make sure those nibbling don’t get too close. They have pushed us in what we do,” he said.
Forest River Inc., a Berkshire Hathaway company, the nation’s No. 2 RV builder and among the five largest park model makers, has done a total overhaul of its park model offerings for 2013 in its high line Quail Ridge and entry-level Summit product line.
The company has introduced four new floorplans so far and revamped its interior decors for these 12-wide models. Many formerly optional features are now standard on the Quail Ridge line and may be available on Summit products.
Interior doors are now stained to match the cabinets. New cabinet designs and styles, new kitchen backsplashes and hidden hinges for cabinets were introduced. Cabinets now have pulls instead of handles and ball-bearing glides. Kitchen cabinet and pantry shelves are now adjustable. Countertop choices were expanded. Pullout trash cans are now inside the pantries.
New window treatments feature hard valances and give a more upscale look. Accent furniture was updated.
On the outside, new vinyl siding colors were added. Shutters have been added to entry doors and loft windows.
“Competition was at the heart of the need to change,” said Gary Duncan, account manager for the Elkhart, Ind.-based manufacturer. “We weren’t gaining market share in recent years. These changes are recognition of competition and where the product needed to be. It was getting stale. Minor changes weren’t going to cut it; we really had to do something dramatic.”
The company also has upgraded its cabin-like park models, which it builds to customer specs. The basic model is a derivative of a KOA floorplan, which is tailored to meet the customer’s needs. Forest River made few changes in its cabin offerings, other than improving its interior paneling and upgrading its wooden cabinets. Cabins are available with vinyl, cedar lap or cedar log siding.
Lead times for Forest River products are about six weeks.
Cavco Industries Inc., a publicly held company, was keeping under wraps several soon-to-be-announced park model products that will be industry firsts.
“I think innovation is what has kept Cavco in the game,” said Tim Gage, national vice president of park models, cabins and specialty products for the Phoenix-based manufacturer.
As reported earlier by WCM, Elkhart, Ind.-based Skyline Corp., another publicly held company and in a solid third place in retail sales among park model builders, has opted to resume park model production at its manufactured housing plants in Wisconsin and Oregon based on the dealer response to Skyline’s park model display at the Louisville Show, said Mike Scheid, division general manager of Skyline’s plant in Leola, Pa.
The Shore Park is built in a manufactured housing plant and uses many of the components used in manufactured housing. For example, it’s one of a few manufacturers who use drywall inside their park models.
“We figured out a way to ship it without cracking,” he said.
He said his plant picked up eight to 10 new dealers at Louisville and business looks to be up 25% to 35% again this year. Canadian business also is growing, he added.
“We’re looking forward to gaining market share and upping our revenues,” he said.
Its plant location in Leola also helps keep freight costs down to customers in the Northeast, compared with the park model builders based in Northern Indiana, he said.
The Canterbury brand name has been in the industry since 1982 and today is manufactured by DNA Enterprises in Goshen, Ind. The company’s core product offering is 12-wide park models which come in three distinct price tiers, noted company spokesman Kevin Wells. The Bayview is the entry-level model, the full-featured Parkvue is for the upscale buyer and the Select is a custom-made product.
RVIA Smiling After Big Louisville Show
As WCM reported in its January issue, the Recreation Vehicle Industry Association (RVIA) came away from the 50th Annual National RV Trade Show held in Louisville, Ky., optimistic about the 10 park model manufacturers who exhibited 2013 product there.
For the first time, the builders were allowed to bid on space anywhere within the Kentucky Exposition Center.
Before 2012, the builders were limited to specific areas of the exhibition hall.
This was the first Louisville Show held since the Georgia-based Recreational Park Trailer Industry Association (RPTIA) was shelved and the bulk of its members invited to rejoin RVIA after a hiatus of more than a decade.
“The feeling was very positive. It goes to the whole notion they are part of the overall RVIA family again,” said Matt Wald, the RVIA’s recreational park trailer executive director. “Both psychologically and from the traffic flow, they felt it was a good deal for them.”
Other firms showing at Louisville were: Athens Park Homes/Champion, Breckenridge, Chariot Eagle, DNA Enterprises (Canterbury), Dutch Park Homes, Fairmont Homes, Kropf Industries Inc. and Woodland Park.
20 Park Model OEMs Join RVIA
On July 1, 2012, the RVIA created a new membership category for manufacturers of recreational park trailers, also known as park models. By year-end, 18 manufacturers, representing upward of 95% of annual park trailer production, had joined the RVIA, with two other applications pending inspection of their facilities.
“We had anticipated having 15 members; we have exceeded our expectations. Everybody is happy about that,” Wald said.
All but two of the new members were members of the RPTIA, which still exists, but in name only.
“A couple of OEMs are still not in the RVIA family, but we would love to have them aboard,” he said. “Some are waiting to see if this ‘marriage’ works before investing in it. We think it is a value proposition they can’t stay away from.”
A new page on the RVIA’s homepage at www.rvia.org pertains to recreational park trailers with a link to annual shipment figures and other information.
The industry is coming off a second straight year of little if any year-over-year growth, but Wald and others see a glimmer of hope in the future.
During the past year, Champion Homes purchased Athens Park Homes of Athens, Texas, and has begun to produce Athens Park product in Champion plants across the U.S., which Wald calls “a pretty significant entry into the park model side of the business.” This puts them in the same national markets with industry leaders Breckenridge and Cavco, Wald noted.
Aside from anecdotal evidence and monthly wholesale shipments, which RVIA tracks, Wald said major players told him following the Louisville Show their orders were solid. “With the economy turning the corner, it could be a good year in 2013. I would like to be cautiously optimistic and say I do not expect a drop-off in 2013. I’m expecting a ‘flat’ year but hoping for better,” he said.
Issues such as consumer confidence, the “fiscal cliff” and financing are beyond RVIA’s control, he noted, “but I think it’s fair to say this industry is solid and primed to grow, hopefully this year,” he said.
Despite the nation’s challenging economic environment, business for most of Kampground of America Inc.’s 460-plus parks is relatively good right now. In fact, it’s real good in some cases. That much was evident at KOA’s Annual International Convention at which some 500 people – representing 220 parks – gathered Nov. 7-10 at the Westin Savannah Harbor Golf Resort & Spa in Savannah, Ga.
How so many entrepreneurial franchisees like Steven Jewell, of Spartanburg NE/Gaffney, S.C., KOA, managed to so gracefully avoid the more dire effects of the Great Recession is hard to figure.
So far, however, that appears to be the case.
“Our business has been strong this year and last year right through the rather low period that other people experienced,” said Jewell, a convention attendee who does “huge” repeat business. “We've experienced continual growth over 29 of the last 30 months with increases over 10% – and as much as 18% to 19% – from the previous year.”
By the same token, Al Johnson’s 10 KOA’s are all posting revenue gains. “We had a banner year for our company, which was chasing a really good year last year,” says Johnson, whose South Dakota-based Recreational Adventures Co. has benefited from both good weather and economy-seeking campers.
Neither Jewell nor Johnson was doing paid testimonials for KOA, but they well could have because their remarks are consistent with the company’s own impressive report: KOA’s core business saw strong growth during the company’s summer camping season, with same store revenue up 6% and camper nights up 4.5% over 2009, according to an “annual report” distributed by the company Billings, Mont.-based franchisor at its upbeat convention.
KOA President Pat Hittmeier says the company experienced year-over-year gains in each of the first 10 months of 2010, while destination locations near major attractions and “along-the-way parks” that feed those major markets did particularly well.
KOA’s total revenues are up about 8 1/2 percent in this, the second consecutive year of strong gains compared to the “poor” results posted in the recessionary summer of 2008. “We are still just a fraction below where we were in 2007,” Hittmeier told Woodall’s Campground Management. “So we are very close to that benchmark, which was an excellent year.”
In fact, Hittmeier says KOA had surpassed 2009’s total year-end camper nights by early November.
“As consumer confidence and the jobs market come back, we are looking for a record-breaking year in 2011 for the summer,” adds Hittmeier. “The part that is a little disconcerting is the winter business, that which takes place between Nov. 1 and April 30. It has been down multiple years in a row. There are two parts of that – the short-term traveler and the extended stay snowbird.
“The snowbird business has stayed pretty stable – down a little bit, up a little bit,” he continued. “But the traveling market in the wintertime period has taken a big hit. That group has gone down repeatedly since the 2006-07 winter. Last year, we thought it would stabilize. It didn't. It's about 25% of what it was in 2007. We are hoping this year that it will turn around and that that particular retiree market will come back.”
KOA, in turn, expects to finish 2010 with a total count of about 470 parks, 26 of them company owned, the rest operated by independent franchisees. Hittmeier says KOA usually adds through conversions of new parks as many as 20 to 25 parks a year and loses through attrition anywhere between five and 15 parks in a average year.
Cultivating a Lucrative New “Lodging” Business
Looking ahead, the so-called “lodging” market remains a big target of KOA as the company continues to spearhead a trend toward rustic looking, wood-clad cottages built by three preferred providers: Cavco Park Homes & Cabins, Goodyear, Ariz.; Thor’s Breckenridge division, Nappanee, Ind.; and General Coach of Hensall, Ontario, Canada, all three of which had units on hand at the Georgia convention.
In fact, Hittmeier says there’s now a total of about 5,000 “roofed accommodations” in the KOA system – the goal being to add another 1,700 by 2015.
“We added about 400 roofed accommodations last year — most of those being park model types with full service kitchens and bathrooms,” said Hittmeier. “Our lodge nights were up 35% in October, so we are starting to see some shoulder season business from these lodges, which is something we didn't experience from our camping cabins (small dwellings lacking kitchen and bathroom facilities).”
These fully equipped recreational park trailers are called “Kamping Lodges.”
The next phase in KOA’s ongoing push into the lodging arena – a rather bold step that represents a definite departure – is a move toward the traditional hotel/motel field. As a matter of fact, the company-owned properties department has developed an operational manual specifically for lodging. “We are going to go more deeply into the linen market and hit the hotel/motel market head on,” says Hittmeier. “It's a big jump because there's a lot of work behind it relative to commercial laundries and taking on some systems.
“Anytime we have more than 10 lodges on a property, we are going to go to that model.”
The biggest challenge related to all that, he agrees, is to get the word out to the North American public that all of these lodges exist and that a young traveling family – or a family visiting an area for a soccer tournament – can opt to stay in a pretty little pine-sided cottage at the KOA instead of the Marriott Courtyard.
“The people who are staying in our lodges rate the experiences at the highest level,” said Hittmeier, now in his second year as KOA’s president. “They rate us higher than people who stay in RV sites, and of course, they pay the most amount of money. We know we've got a good product. The people who stay in them are first-time visitors to KOA as well, so they are not RVers. It is a new market, a primarily family market.
“When we get critical mass of enough units out there, I think we'll start to see an even stronger draw and awareness,” said Hittmeier, adding that about 200 KOAs currently operate lodging accommodations.
“The hotel industry is coming toward us,” adds KOA CEO Jim Rogers. “They're not changing your sheets anymore. They’re trying to put in a breakfast in the morning, trying to get you to socialize, but you still worry about going next door, knocking on the door and getting shot. That's not what's going to happen in this (campground) environment. These little buildings give you a sense of ownership – it's a cottage, it's a chalet, it's a cabin, it's yours, it's reasonably priced. And you get something that you won't get from a hotel.
“Now you're (the park operator) in hospitality. We are moving toward them and they're moving toward us. But we win because we've got 22 acres to go play on.
The problem is that nobody knows we've got them. We put it in our directory last year, but that was talking to our own campers. The people who are noticing our lodges are paying the most and have the highest satisfaction, return and value.
“And they are demographically diverse. We are seeing the African-American, Asians and Latinos use these products and loving them. That takes you beyond even the hotel component. It reaches you into a whole new strata of incremental business.
Unprecedented Focus on The Company’s KOA.com
Another significant focal point for KOA right now is its revamped www.koacom website. This is no ordinary website, not for the $900,000 million that the company recently invested in it – in addition to the $1 million KOA typically injects into its web operations on an annual basis.
One of the revamped website’s new features is geo-coding, which allows the site to know where an online user is located, and display campgrounds and special offers in that area.
“The old version of koa.com was already the most visited camping website in the world, with more than 1.1 million visitors each month,” said Lorne Armer, vice president of marketing for KOA. “But it was time for an upgrade, and the new koa.com offers our guests an enhanced online experience as they plan their camping trips, discover what there is to do near our campgrounds and make their reservations.”
The new site allows park operators to manage their own content and also features Google Mapping, a familiar online technology that allows users to quickly navigate state and provincial maps, zeroing in on just the right locations.
“The new koa.com, which was produced by our partners at Genex in Los Angeles, will allow campers to spend time discovering some of the wonderful locations we have at KOA, so they do all of their trip research efficiently in one easy-to-navigate location,” said Armer. “They will have real-time access to more than 60,000 of North America’s best recreational vehicle sites, tent sites and accommodations such as our new Kamping Lodges.”
Hittmeier says KOA had planned to launch the revamped website in May, realizing its growth potential, especially among first timers. But building 10,000 pages and integrating the company’s Kampsite reservations operating system was quite a test.
“It was a little more complicated than we thought,” explained Hittmeier. “Instead of a nine-month period, it turned into more like a year and a half launch period. And once we got into the middle of summer, we thought there was no way we could launch this when we are doing about $40 million in reservations through koa.com. Our campground owners would kill us if we launched a brand new website in the middle of their season. So, we waited until just a couple of weeks ago to launch it.”
Keynote Speaker Preaches The Power of Instant Feedback
Keynote speaker Fred Reichheld, a customer service guru who authored the groundbreaking book “The Ultimate Question – Driving Good Profits and True Growth,” told the assembled attendees that he had studied several companies that had experienced exceptional growth like Chick-Fil-A, Southwest Airlines and Enterprise Rent-a-Car.
What he found was a singular dedication to treating customers well and an ability to quickly measure their success and “make good things happen with what they learned.”
And that’s the kind of responsive approach KOA is trying to emulate.
Reichheld’s measurement tool, the Net Promoter Score, simply asks customers to rate their stay immediately after departure, and guests are asked if they’d likely recommend the business to a friend. The low scores, or “detractors” are subtracted from the top scores, or “promoters” to arrive at a “net promoter score.”
Reichheld’s new scoring system, providing KOA owners with immediate customer feedback on a daily basis – allowing them to quickly check progress and correct service problems as they occur – was adopted by the KOA system this summer as a means of helping operators improve service to campers.
He said sharing immediate customer feedback with employees is a great way to insure everyone – the owner, customer and employee – can win.
As part of its new “Rate Your Stay” feedback loop, KOA guests get an automatic e-mail from KOA thanking them for their business and asking them to rate their experience and add verbatim responses if they so choose. Consequently, KOA owners received over 120,000 immediate, catalogued responses from guests so far, allowing them to take quick action on operational issues.
“This response in addition to the verbatim feedback, comes back to our KOA owners immediately,” says Hittmeier. “Each morning they can open up their responses and we provide an organized list of where their scores are at, verbatim, ranking them by site types, and so forth. So, they can manage their business on a daily basis. They use this to reinforce good service practices with their staff. It's a real good tool that will help us move those service scores up.”
“We've continued to refine and focus our quality process where now, we wake up in the morning and see what our customers said about us yesterday and we respond to it,” Rogers explained. “We are able to make a phone call if they are disappointed. We are dealing with one guest at a time to make sure their stay at KOA was satisfactory to them.
Rogers Addresses Financially Strapped Public Park Sector
In what amounts to a real turnaround for the RV park and campground arena, Rogers is appealing to the private park sector to take heed of the sorry current state of public parks faced with critical budget cuts.
“The public sector is in a world of hurt,” he maintained. “I don't care if you are at the federal or state level. They represent 8,000 campgrounds. We have 8,000 commercial campgrounds. They have 8,000 very distinguished specific locations that Americans enjoy, as do our visitors. So, you have to begin to ask the question: Are there any things that we're doing on the commercial side that can be of assistance to the private side. That's where the doorbell is being rung.”
Although KOA isn’t interested in any concessionaire relationships, he adds, they’d like to figure how KOA franchisees near public facilities can be of assistance or can “create an opportunity to take park rangers and teach them the free enterprise system.
“They are at a clear dead end,” said Rogers. “What we are hearing from the Forest Service is that they can't find anybody (entry-level personnel) in the channel. They are retiring all these people and there's nobody to replace them.”
So maybe, he argues, the private sector can help.
“We're here in the state of Georgia,” added Rogers. “Their park budget was cut 30% and they lost a referendum in California for an $18 million license fee that would have collected $500 million. They are threatening to close 126 parks. If this feeder system gets sicker and then closes, the commercial campground business is in trouble.
“So much of what you get is that entry point (for first-time campers) in the state parks. You're going to lose that beginning point. If you take all the KOA campers and aggregate their camper nights, 20% of those are spent in public facilities. They're on their way to a location. They stay with us on the way, but they are going to Yellowstone. If a state park is closed or doesn't provide the service they want, we're going to lose the traffic in between.”
While the private park sector is opposed to using public funds to build new parks to compete with them, Rogers observed, everyone needs to be careful not to forfeit in the current budget crises tens of thousands of camper nights. “We need to be more robust by putting our heads together to see if there's a new paradigm that we can operate under,” he noted. “If we do, I think we're going to find those state and national parks are going to upgrade their services and increase their rates and better service the camping public. We'll all benefit from that.
KOA Honors Franchisees At Savannah Convention
KOA honored a number of franchisees with awards. The top honorees were Michael and Kristi Kuper, owners of the KOA in Thunder Bay, Ontario, recipients of the Franchisee of the Year Award for 2011.
The Kupers, who first met as teenagers and worked together on the campground with Kristi’s parents, won the award during the convention’s first day.
The Kupers purchased Thunder Bay KOA in 1998 from Kristi’s parents, and have worked tirelessly for the past 12 years to added new features and improvements for their camping guests. Their efforts have led to a KOA President’s Awards every year, as well as three KOA Founder’s Awards.
The award was presented by Hittmeier and Rogers as well as last year’s winners, Sam and Renee Scialdo Shevat from the Herkimer Diamond, N.Y., KOA.
Along with a large bronze statue by Billings artist Mike Capser titled “Always Welcome,” the Kupers will be the one-year guardians of the “Dave’s Hammer” traveling trophy. The trophy includes a well-used hammer once owned by Kampgrounds of America founder Dave Drum, who founded KOA in 1962.
Other award recipients were:
- David and Helena Johnson were honored as KOA Rising Stars for 2011. The Johnsons are the owners of the Willits, Calif., KOA. The award goes to a KOA franchisee who has been part of the KOA system for five years or less who demonstrates extraordinary dedication to guest service and support for the KOA system.
- Rob Althoff and Marianne Bartels won the KOA Work Kampers of the Year for 2010. The couple was nominated for the award by Kathy and Stuart Marshall, the owners of the Montpelier Creek, Idaho, KOA.
Midwest Leasing Inc. has joined forces with Thor Industries Inc. on an exclusive basis to provide the RV park and campground industry with financing solutions.
Midwest Leasing Inc. originated in Milwaukee in 1985, but is now headquartered in Crested Butte and Gunnison, Colo. Midwest Leasing will provide conventional financing, as well as structured financing to coincide with a campground owner's seasonal cash flow on terms up to 60 months. "At the end of the financing term your campground owns the park models/rental units. We will finance park model/rental units, including freight, as well as other capital equipment related to your campground, throughout the United States and Canada," he said.
Advantages of Financing With Midwest Leasing Inc:
- Will finance 100% of total purchase.
- Allows you to finance other equipment for your campground.
- Conserves cash resources for other priorities.
- Allows for structuring of your payments to coincide with seasonal cash flow.
- Allows you to pay for units as you are receiving revenue from their use.
- Allows for the same tax benefits as if you had purchased the units.
- Does not affect your bank line borrowing ability.
“We have been financing capital equipment for 25 years," Wickenhauser said. "We have looked long and hard at the park model/rental unit marketplace and feel comfortable with the products from Thor Industries Inc. We are excited and optimistic about our ability to help campground owners in the U.S. and Canada who want to acquire park model/rental units, as well as other related equipment, for their campgrounds. Campground owners are finding that park model/rental units are providing two to five times as much income as a traditional RV site, so we think the time is right for us to enter the financing arena to help campground owners acquire these units.”
To learn more specifically about how Midwest Leasing can help your campground call or email: Fran Wickenhauser at (800) 203-8920; Bryan Wickenhauser, vice president, at ( 800) 398-2604; email@example.com; and firstname.lastname@example.org.
CrossRoads RV, Topeka, Ind., has become the fourth Thor Industries Inc. company to join an exclusive promotion that provides special pricing for recreational park trailers to be used as rental lodges by members of the National Association of RV Parks and Campgrounds (ARVC).
CrossRoads President Mark Lucas and Shane Ott, Thor Industries’ director of campground relations, announced CrossRoads’ entry into the ARVC-Thor promotion last week during the during the California National Association of RV Parks and Campgrounds’ (CalARVC) annual convention and trade show in Reno, Nev.
Three other Thor companies participating in the ARVC-Thor promotion include Airstream Inc., Breckenridge and Keystone RV Co.
All four companies offer unique lines of park model cabin and travel trailer units that have been specially designed to meet the durability needs of private park operators who are anxious to expand their offering of rental accommodations.
“CrossRoads is taking a very assertive approach in reaching out to private park operators,” said Ott, who developed Thor’s rental accommodations initiative after previously serving as president and COO of Kampgrounds of America (KOA).
Lucas, for his part, said input from private park operators has enabled CrossRoads to design its rental units to withstand daily wear and tear from campground guests. As a result, its rental units feature:
- 5/8-inch pine plank tongue and groove interior paneling instead of 1/4-inch paneling or gypsum board.
- No carpeting. Instead, the floors are covered with Beau Floor linoleum, which is easy to clean and more resistant to furniture scratching and cracking due to cold weather than other floor coverings.
- No curtains because the materials used in draperies can tear and hold odors. Instead, CrossRoads uses miniblinds, which can be easily cleaned and replaced as needed.
- Residential style refrigerators. Guests prefer them over compact RV refrigerators because they hold more and work better. They can also be easily replaced as needed.
- Custom designed deck plans. CrossRoads has provided Lowe’s with architectural drawings for patio decks that it designed specifically for its rental units. So whenever park operators want to install a patio, they can simply contact Lowe’s, which will provide them with the deck plans as well as the lumber and other supplies they need.
During the Cal-ARVC tradeshow, Lucas and Ott also introduced park operators to Fran Wickenhauser of Midwest Leasing, whose company has been given an exclusive contract to provide financing to park operators who purchase rental accommodation units through the ARVC-Thor promotion.
Other lodging units featured in the ARVC-Thor promotion include four Breckenridge park models ranging from 22- to 36-feet; two Keystone travel trailers, including one 29- and one 37-foot model; and one 25-foot Airstream travel trailer.
The world’s largest RV manufacturer, Thor has a long history of financial stability and annual growth. The Jackson Center, Ohio company and its subsidiaries currently produce 30% of the RVs and park models produced in the United States, which Ott said should assure ARVC members of a mutually beneficial and stable business relationship.
ARVC, for its part, is the largest association of private parks in the world, representing more than 3,600 commercially owned campgrounds, RV parks and resorts across the country. The association is based in Larkspur, Colo.
Editor’s Note: On Tuesday (March 23), Thor Industries Inc. announced it has joined with Midwest Leasing Inc. to provide the rental lodging industry with leasing and financing solutions. Added to Thor’s previously announced association with the National Association of RV Parks and Campgrounds (ARVC), Midwest Leasing brings Thor’s team of RV lodging professionals full circle. Thor manufacturers Airstream Inc., Breckenridge, CrossRoads RV and Keystone RV Co. provide quality, “ruggedized,” rental lodging units customized to industry standards. Midwest Leasing, which originated in 1985 in Milwaukee, Wis., but is now based in Crested Butte, Colo., will provide the financing to get them on site. “This Midwest Leasing announcement could not have been timed better, as ARVC owners are looking for the opportunity to add lodging inventory before the upcoming summer season,” said Shane Ott, director of campground relations for Jackson Center, Ohio-based Thor Industries and former president of Kampgrounds of America Inc. (KOA) Within an hour of the story’s posting on the RVBUSINESS.com and WOODALLSCM.com websites, a campground owner from the Memphis, Tenn., area called Ott to inquire about the program. It’s been hectic for both Ott and Midwest Leasing president Fran Wickenhauser ever since. WOODALLSCM.com spoke today with Ott and Midwest Leasing’s President Fran Wickenhauser, who is based in Crested Butte, Colo. Portions of those interviews appear below.
WCM: Why is this deal with Midwest Leasing Inc. important to the campground industry?
OTT: The No. 1 hang-up for campground owners right now is the lack of the ability to obtain financing. Banks have routinely struggled to understand the campground model anyway because our industry doesn’t have a lot of publicly traded companies. They don’t understand the dynamics. With the downturn in the economy it became increasingly tough. We’re providing an option. If you want to pursue lodging accommodations, we think we have an outstanding offering of park models and ruggedized RV units. It’s exclusive to Thor products.
WCM: How did this relationship unfold?
OTT: I pursued it. I talked to a couple of national lenders (about the program) and it was apparent it was going to be a long road. They didn’t say no to us but it was apparent this would be an arduous process going through two large companies, Thor and the institution. The window of opportunity is right now! Midwest Leasing, a smaller regional lending group, was able to move quicker and be more flexible with our needs at Thor. I spoke with Fran Wickenhauser, the president.
(Ott suggested WCM contact Midwest Leasing. Ott added, “Don’t be surprised if Fran answers the phone." WCM called Midwest’s 800-number and sure enough, Wickenhauser answered the phone.)
WCM: Why are you entering the RV park and campground sector?
WICKENHAUSER: It is a brand new market for us but we have always known that sector of the market was out there. We’re a general equipment leasor; we finance any type of equipment, computers to school buses to construction and production equipment. We have leased motorhomes and travel trailers in the past; we just haven’t done it on an organized basis and we haven’t done it for the campgrounds
In this economy, credit is tight all over. Campground owners are not unique. We realize we are coming into a segment of the market in a time when credit is still tighter than it was two to three years ago. That is true in the lending community in general. We are confident this economy is on the slow rebound and recovery and that lending will get more relaxed in their requirements as times goes on.
WCM: You are in a sense a middleman in this operation. Please explain.
WICKENHAUSER: We are a privately held company and have been in business since 1985. We have bank lines of credit. That’s typically how it is done in the leasing community. We have a fair amount of staying power and have gone through a number of cycles and survived them all.
WCM: You have offices in Colorado and Arizona but you see this program as a nationwide program, right?
WICKENHAUSER: Yes. In lending community, it’s somewhat impersonal. Ninety-nine percent of the clientele I deal with, I never meet them face to face. All work is done on the Internet and in e-mail and the electronic world we are all in. We cover the entire U.S. through the Internet. It’s a very expeditious way to handle that. You attach documents and quotes and can have it on a campground owner’s desk within 30 seconds. We’ve been covering the entire U.S. for 25 years. Now the campground industry will become a part of our world.
WCM: Walk me through how this would work for a campground owner seeking to use your service.
WICKENHAUSER: The campground owner will come with a borrowing request. Let’s say he wants to buy five park models, $40,000 each for a total of $200,000. The campground owner would ask for a quote. We say we’ll provide a quote within 24 hours, but typically it might be within the hour. We’ll e-mail the quote. If the quote is acceptable, we will send them a credit application. Within two to three days of the return application, the campground owner would receive a credit decision. If the decision is positive, we would move forward with a lease agreement. At this point, we would wait for Thor to deliver the park models. As soon as they are delivered, Midwest would pay Thor and the lease commences, with the campground paying Midwest Leasing. Typically, a lease would be for five years. At the end of 60 payments, they own the park models.
An analogy would be school buses or modular classrooms for schools. We’ve been working with school districts for years.
WCM: The initial response has been good, we understand.
WICKENHAUSER: I’m getting calls daily from interested parties, be it KOA, Jellystone, associations or sales and marketing people. The information is so new it’s just now being released. I’m hearing from marketing and sales people from Thor Industries, from people who want to better understand the program.
WCM: How do you see this business unfolding this year?
WICKENHAUSER: I have no idea, only because I don’t know if Thor knows how many people will be interested in financing their products through Midwest Leasing. I think we’ll get a good feel for this in the next six to nine months, after the summer season and some trade shows. I’ll be in Reno in April and standing next to the Thor people in their booth as they market their products to the campground owners…We’re all very hopeful it will be very productive for both of us. It’s all based on the strength of the individual campground entrepreneurs. As I told Thor Industries, each opportunity has to stand on its own two feet.
Thor Industries Inc. announced that it has joined with Midwest Leasing Inc. to provide the rental lodging industry with leasing and financing solutions.
Added to Thor’s previously announced association with the National Association of RV Parks and Campgrounds (ARVC), Midwest Leasing brings Thor’s team of RV lodging professionals full circle, according to a news release.
Since its inception in 1985, Midwest Leasing has provided customized and structured finance options for virtually any type of equipment. Now they will design those options to meet the specific needs of campground owners seeking lodging opportunities. All financing products can be customized and structured to meet the unique requirements with appropriate term and repayment schedules needed by today’s campground owners.
This threesome – Thor, Midwest Leasing and ARVC – is a first in the campground industry. Thor manufacturers Airstream, Breckenridge, CrossRoads RV and Keystone provide quality, ruggedized, rental lodging units customized to industry standards. Midwest Leasing provides the financing to get them on site.
ARVC’s commitment to promoting the campground industry continues. All three successful organizations combine to provide a first-time collected resource for campground owners.
According to Shane Ott, Thor’s director of campground relations, “Our commitment to meet the needs of our customers continues as we develop efficient and profitable ways of doing business. This exclusive offer from Thor sets us as the premium brand of choice for lodging accommodations. Right now the biggest need of campground owners is finding financing. This Midwest Leasing announcement could not have been timed better, as ARVC owners are looking for the opportunity to add lodging inventory before the upcoming summer season.”
Contact Ott or Fran Wickenhauser for more information on Thor’s Rental Lodging opportunities by calling (406) 670-7181 or e-mail Ott at email@example.com.
Private campgrounds and RV parks and resorts are continuing their move into the accommodations business with park models, yurts and site-built cabins, despite continued difficulties obtaining financing in many cases.
The reasons are clear: Rental accommodations broaden a park’s business base while generating at least two to five times as much income as a traditional RV site, depending on the park’s location.
At Yosemite Pines RV Resort & Family Lodging in Groveland, Calif., for instance, 26 park models and eight yurts generate nearly as much income as its 181 RV sites combined, according to park co-owner John Croce. That’s roughly five times the income of a typical RV site.
In the 465-park Kampgrounds of America Inc. (KOA) network of franchised and corporate-operated parks, in turn, recreational park trailers account for two percent of campsites, but generate 6% of income, or triple the typical RV site revenue, according to Mike Atkinson, KOA’s director of lodging.
And while the recession has hammered the hotel industry, private park operators have found that their rental accommodations have remained resilient. KOA alone saw a 14% increase in “same store” park model rental income from 2008 to 2009, Atkinson said.
This kind of market success with campground rental accommodations is spawning intensifying competition among park model manufacturers as they vie with one other to provide private parks with increasingly attractive, competitively priced units.
And that competition more than likely heated up last fall when Jackson Center, Ohio-based Thor Industries Inc. announced a new strategic partnership with the National Association of RV Parks and Campgrounds (ARVC) to provide rental-lodging at special discounted pricing for ARVC’s nearly 4,000 affiliated parks.
“The immediate response since we made the announcement last fall has been overwhelmingly positive,” said Shane Ott, Thor’s director of campground relations. “We’ve literally had dozens of serious inquiries regarding both park model and travel trailer rental options.”
The ARVC-Thor partnership involves “ruggedized” park models and travel trailers tailored for rental use by Thor’s Breckenridge, Airstream Inc. and Keystone RV Co. subsidiaries.
Possibly adding to the impact of that new partnership is the possibility of Thor finalizing terms of finance package with “a major financial institution” that could sweeten the deal by helping ARVC campground owners obtain financing for Thor’s campground lodging products, Ott said a press time.
Cavco Pursues Eastern Market
With Fleetwood’s Virginia Plant
Meanwhile, one of the nation’s largest park model manufacturers, Phoenix, Ariz.-based Cavco Industries, has ratcheted up its competitive edge by developing its first ever East Coast manufacturing presence with the acquisition of an 80,000-square-foot manufacturing facility in Rocky Mount, Va., which it acquired through its purchase of Fleetwood Homes. The plant helps Cavco significantly reduce its park model shipping costs for its Eastern U.S. customers, since the company’s other park model manufacturing plants are in Texas and Arizona.
Tim Gage, vice president of Cavco’s specialty division, said the Rocky Mount plant has been a boon for KOA’s East Coast franchisees, who can now order custom designed Kamping Lodges with lower shipping costs than they could in the past from Cavco – a preferred KOA provider.
KOA, in fact, is increasingly embracing park model accommodations. While KOA parks have traditionally provided their guests with site built cabins and cottages, Atkinson said the company’s focus today is on fully furnished park models. “As we grow our accommodations business, park models are the product of choice over site-built cabins – not because of quality, but because of ease of installation,” he said, adding that KOA expects to have 1,000 park models in place across North America this year, up from 640 in 2009.
Unlike site-built cabins, park models manufactured by members of the Recreational Park Trailer Industry Association (RPTIA) can usually be set up in private parks without building permits because they have an RPTIA inspection seal.
Nor are building permits typically required for travel trailers manufactured and inspected by the Recreation Vehicle Industry Association (RVIA). Permits are usually required, however, for yurts and site-built or kit cabins.
“The need for building permits (for yurts) will vary depending on the local site, intended use and conditions. But most of the time a permit will likely be needed,” said Pete Dolan, a customer service representative for Pacific Yurts Inc. in Cottage Grove, Ore., adding that the company offers its customers documentation regarding the fire resistance of the yurt materials as well as a structural analysis of snow and wind loads to assist with the permitting process.
“Ultimately,” he said, “(whether or not a permit is needed) will be the local building official’s decision, since the yurt is a unique structure and can fit into a number of different categories within existing building codes.”
Dolan added that Pacific Yurts is seeing growing demand for its products as rental accommodations. “Although it’s only February, we expect our sales figures to be stronger than last year,” Dolan said. “The demand for yurt rental accommodations has been steadily building for the past decade and a half. We are seeing this trend continuing to build steam as more people experience the unique comfort and durability that our product offers.”
Dolan also said the private parks are seeking larger yurts with more amenities, including bathrooms, kitchens and television. “These deluxe accommodations offer the comfort of a deluxe cabin, but still offer a closer connection to the natural environment that tents provide,” he said.
There’s Nothing Like a Rustic
Cabin — Park Model or Not
Of course, while park models and yurts are becoming increasingly appealing to park operators as rental accommodations, some parks retain a soft spot for the traditional log cabin or site built cabin. Log cabin builders also tout the value of their products.
“Typically, park models don’t appreciate while a custom-built house appreciates,” said Mike Sokol, owner of Distinct Discovery Homes in Greenville, Mich., which specializes in high-end custom log cabins for consumers and private park operators. Units can be built with cathedral ceilings, ponderosa pine interiors, stone fireplaces, and wraparound porches.
“We can build their lodges, their bathhouses and their activity centers,” Sokol said.
Clayton Eash, owner of Ligonier, Ind.-based Riverside Cabins, started building log cabins three years ago after purchasing the business from his father-in-law. He said he started building custom log cabins for campgrounds to use as rental units last year and has had “an amazing amount of calls” after promoting his log cabins in WCM.
Eash uses white pine logs and believes that his structures will last longer than park models. “They’re built a lot stronger,” he said. “I also insulate them. It doesn’t take a lot to heat them.” He also uses log purlins instead of rafters to help support the roof. “People really like them,” he said.
Private park operators thus have a growing array of accommodations products from which to choose, and the list keeps growing as the RV park and campground sector turns toward these types of accommodations. Only time will tell how far this trend will extend, and how much it might ultimately change the face of the business.
“Units for rental purposes are a growing percentage of our business,” said Dick Grymonprez, vice president of marketing for Texas-based Athens Park Homes, whose company announced an agreement this month to provide park models for RVC Outdoor Destinations, which has private parks in Arkansas, Georgia and Florida.
“We’re real encouraged about the number of resorts that are looking at park models as either a rental unit or a unit to sell,” Grymonprez said, adding that the only thing keeping parks from purchasing greater numbers of units is continuing difficulties obtaining financing.
Athens introduced a rental cottage series last year. “It’s a series of units that have 6-foot front porches, Hardiboard siding and very sturdy interiors so they can handle the wear and tear of rental use.”
Breckenridge, Chariot Eagle,
Others Look for Solid 2010
Tim Howard, president and CEO of the Breckenridge Division of Thor’s Damon Corp., Nappanee, Ind., said the recent ARVC-Thor agreement has helped to energize the accommodations market sector. He also sees this year being a turning point of sorts for the park model business, which suffered a decline in sales during the recession along with other segments of the RV business.
“If I was doing a line graph and graphing the overall prevailing business, last year that line would have been headed down. This year it’s heading up,” he said.
Park models utilized as rental units by campgrounds are becoming an increasingly important market segment, according to Chariot Eagle founder and CEO Bob Holliday, whose company has manufacturing operations in Ocala, Fla., and Phoenix, Ariz. Rather than spend money to purchase their own park model, many consumers may be inclined to rent one, he added. Chariot Eagle is also seeing more market optimism among its dealers and retail customers. “We expect business to be better this year than last year, which was the toughest in our 25 years,” he said.
“We see (campground rental products) being a growth market for us,” says Larry Weaver, national sales manager for CrossRoads RV, a Topeka, Ind., Thor subsidiary that introduced a travel trailer at ARVC’s annual InSites Convention in Orlando that has been “beefed up” so that it can be used as a rental unit.
So, too, does Nappanee, Ind.-based Fairmont Homes take an optimistic view of 2010, according to General Manager John Soard.
While 2009 was a tough year, Andy Davis, sales manager for Pinnacle Park Homes, Ochlocknee, Ga., says his company managed to stay profitable through the worst of the recession and is off to a “phenomenal” start this year.
And Western Homes’ Silvercrest Division, a Corona, Calif.-based subsidiary of Champion Enterprises, which has traditionally targeted consumers with its high-end park models, is looking for a continued surge of business from the high quality units the company is providing for timeshare developments in Northern California and Arizona. “These units are designed as rental units,” says Western Homes General Manager Al Whitehouse. “That’s why the timeshares have come to us. They sell at intervals, a week at a time, and they are specifically interested in the durability of the units.”
Thor Industries Inc. showcased its new strategic partnership with the National Association of RV Parks and Campgrounds (ARVC) — providing discounts to ARVC member parks on selected destination-style units — during ARVC's InSites 2009 Convention and Outdoor Hospitality Expo that ends today (Nov. 12) in Orlando, Fla.
Three Thor divisions — Airstream Inc., Breckenridge Division and Keystone RV Co. — displayed units at the convention/expo that are designed specifically for campground rental.
"Essentially, as a preferred vendor of ARVC, we are offering incredible pricing," said Shane Ott, Thor's new director of campground relations and former president and COO of Kampgrounds of America Inc. "(Units) are specifically built for ARVC members (at) a substantial savings (compared to retail)."
Specially designed Airstream Flying Cloud, Keystone Springdale Fireside travel trailers and Breckenridge recreational park trailers are being made available to ARVC members through a special arrangement that was announced in mid-October.
This is the first time that ARVC, the nation's largest RV park and campground organization with 3,000-plus members, has entered a marketing program with an RV manufacturer.
Units designed for ARVC campgrounds will not be available on the retail market. "All of these units were ruggedized to extend their life as rental accommodation units," Ott said. "They probably would not be viewed as attractive to a retail customer because they don't have some of the creature comforts."
Airstream Flying Cloud and Breckenridge park models will be available directly from the manufacturer, while Springdale Fireside travel trailers will be marketed through Keystone's 270-plus dealers nationwide.
"One thing that is critical in our minds to the success of this is for both the dealers and campgrounds to benefit from it," said Nick Eppert, production manager for Keystone's Springdale division. "We see an upswing in campgrounds wanting to provide extended-stay units."
To whom are these new rental units targeted in a market that is seeing growing demand for all sorts of "cabins" and later-term accommodations?
Ott said there are several markets that campground rental units appeal to. "There are campgrounds that want rental accommodation units to market to a leisure camper who may be coming in with their family for a long weekend or a few days," said Ott, who joined Thor during the summer. "Others are marketing to folks on a more seasonal or annual rental basis."
Ott said units were designed with ARVC members in mind.
"What's unique here is we used ARVC members in the design of these units," Ott said. " We went through a series of phone calls and meetings all summer asking for feedback based on (campgrounds) rental experiences — what were the things we needed to do to build these units?"
Ott suggested that the campground sector is on the verge of reaching "a critical mass" of rental units that can augment campgrounds' traditional customers.
"Today we can effectively go out and tell the rest of the world that going to a campground is something that you can do without owning an RV," he said. " Ten years ago, the distribution of rental units wasn't strong enough to make that announcement. But today, we've probably reached the point that the vast majority of commercial campgrounds in the country have some kind of accommodation unit."