Editor's Note: Following is an e-mail sent out this week by David Gorin.
The last few years have been very exciting for David Gorin & Associates. As the recession rolled across the landscape, I’ve been fortunate to be associated with several successful ventures.
Best Parks in America Inc. has expanded to 80 highly rated RV resorts across the U.S. This marketing group has made a deep impression on RVers and outdoor enthusiasts who seek superior RV resorts and campgrounds. Our business building programs and tools for affiliated resorts are being increasingly embraced by park owners and I anticipate that the network will expand to over 100 resorts within the next 12 months. For information about Best Parks in America, please visit www.bestparks.com (the consumer website) or www.bestparks.net (the business to business website). If you've got a park that is at the highly rated level, please consider becoming affiliated with Best Parks. It is the brand for the higher end of the park industry.
Holiday Cove RV Resort in Cortez, Fla., has been wonderful project. David Gorin & Associates initially became associated with this park when the former owner engaged our services to evaluate strategies for growth and re-development. As a result of the consulting work, I was fortunate to team up with an investor partner and together we purchased the park and implemented a total redevelopment plan. The park today has 97 beautiful sites and approximately 50% of the sites have been sold. Sale prices were initially established in 2008 and the prices continue to escalate as the number of sold sites continues to grow. Rental rates are at the top end of the scale, occupancy is strong year round and the resort receives the highest ratings from all those who evaluate and review parks.
I was especially pleased that my participation in Holiday Cove gave me an opportunity to gain additional and current experience directly in the day to day development and operational challenges associated with park ownership and management.
In recent years, David Gorin & Associates as served as an expert in several cases involving RV resorts and campgrounds and we now work directly with attorneys and through TASA, the technical assistance service for attorneys. Each opportunity to work on issues that come up through these contacts, further expands my ability to serve the operational needs of park owners and managers.
There is great interest in the RV park industry on many levels. We continue to receive a steady (actually an increasing) flow of calls from developers and investors. We continue to monitor carefully trends and developments in the industry. Every effort is made to share some of these trends through a new website that was put in place several months ago. Please visit www.DavidGorinAssociates.com to stay abreast of many of the industry issues, challenges and opportunities.
Exceptionally Unique RV Resort Opportunity
If you’re reading this e-mail, I surely don’t need to take your time to rehash what has transpired in the real estate world since 2007. As a result of the devastation in values that has taken place, everyone is touting the unique, never before available investment opportunities that now exist. David Gorin & Associates receives inquiries almost daily from distressed land owners looking for RV resort operators who might be interested in joint venturing in the development of their land as another RV resort.
Here’s a brief presentation on an opportunity that I believe is truly exceptional and provides an astute investor with an opportunity to gain a foothold in what is unquestionably one of America’s top tourist and recreation destinations where land has been exceptionally expensive and heretofore unavailable and uneconomical for RV resort development. And of course to achieve higher than typical returns on a reasonable investment.
A highly qualified, experienced and financially sound investor group based in the Knoxville, Tenn., area has 84 acres about ½ mile from the center of the Sevierville/Pigeon Forge commercial tourist area that serves as both a tourist destination in its own right, as well as the gateway to the Great Smokey Mountain National Park, America’s third most visited national park. The land is approved for outdoor hospitality use – an RV resort, cabins, hotel, folk school, corn maze, river tubing/canoeing and kayaking, and a variety of other related recreational uses. There is about ¾ mile of river frontage along the Little Pigeon River. The location is within walking or golf cart distance of numerous attractions including the new Titanic Museum Attraction, Wonder Works, restaurants, including the very popular Apple Barn restaurant and country shopping complex, and is very near a new $100 million Water Magic attraction that will be constructed soon. The Tanger Outlets are just 0.7 of a mile from the location.
The Sevierville/Pigeon Forge/Gatlinburg market hosts over 12 million visitors a year and has a solid, long-term track record as a destination for families, empty nesters and generation Xers seeking active outdoor recreational experiences.
A video showing the property and some of its uses can be viewed at http://www.youtube.com/watch?v=3lSiKmbg3kl.
Financing for the project is in place. The owners are seeking a financial partner who also may be an experienced RV resort operator to join the group as the RV resort development and operational expert or to team with David Gorin and David Gorin & Associates to lead the RV resort development.
An investment of $1 million will bring a 1/3 interest in the RV resort project. Interest in other aspects of the development is available.
The outdoor hospitality and RV resort industry has weathered the recession in very strong shape. The affordability of this vacation, travel and tourism market makes it very attractive to mainstream America. And this particular location is exceptionally strong since it is located within a day’s drive of about 50% of the American population.
Please give me a call at (703) 448 6863 or drop an e-mail to email@example.com if you would like further information about this opportunity.
This week's ARVC Business Forum, held on the campus of Keystone RV Co. in Goshen, Ind., featured a typically lively give-and-take among the leadership of the National Association of RV Parks and Campgrounds and some of the nation’s key campground vendors.
Forum members met in conjunction with the Recreation Vehicle Industry Association (RVIA) Committee Week and Annual Meeting functions held not far away in downtown South Bend. The week’s agenda also included an industry party in recognition of what RVIA has designated in 2010 as the RV industry’s centennial.
The ARVC Business Forum brings together members of the ARVC Executive Committee and key players in the RV parks and campground business to discuss topical issues.
Shane Ott, director of campground relations for Thor Industries Inc., Keystone's parent company, who helped orchestrate the meeting at Keystone, said the forum meeting at an RV company, a first for the forum, will help narrow "the huge gap" between the campground and RV industries. "There is no reason we shouldn't do this more often," he said.
A few forum highlights:
Mark Anderson, former ARVC chairman and owner of Camp Chautauqua Camping Resort, Chautauqua, N.Y., reported that his park and many others in the East “had almost a perfect Memorial Day weekend,” providing “a great start” to the season. The summer’s outlook for the Northeast is good as travel is up, he added. He noted that while the state of New York is “broke,” the governor found funds to reopen the state parks, which Anderson considers “an important baseline to private campgrounds.”
Vic Nolting, vice chairman of Leisure Systems Inc., franchisor of the Yogi Bear’s Jellystone Park Camp-Resorts, Milford, Ohio, began by summarizing, “In general, things look oh so much better than last year.” He then deferred to LSI’s COO, Rob Schutter Jr., who went into greater detail. Schutter echoed Anderson’s holiday observation. He said business in the Northeast is “leveling out” after “a disaster last year,” due to weather.
Schutter, noting that Yogi operators are seeing an upturn in campers’ ancillary spending after a 2%-3% downturn in such spending last year, reported that the rental market at Jellystone Parks is “through the roof,” thanks in part to its non-dependence on good weather and the growing number of visits of campers new to the Jellystone system.
LSI’s rental business was up 8% in 2009 and he expects another rise this year. The rental business, which puts campers into lodges and cabins, is bringing a lot of non-traditional or first-time campers, added Nolting. They explained that many Jellystone Parks maintain good working relationships with area chambers of commerce and hotels, which also spurs business. Cabin rental rates were $145 a night in 2009 and have been raised by $10 a night for the 2010 season, said Schutter, adding that LSI opened its first company-owned park this year in Bloomington, Ind.
Cindy Halley, publisher of the Trailer Life RV Parks and Campgrounds Directory and vice president of Good Sam Club marketing, Ventura, Calif., reported that TL’s rep teams are well underway in their collection of data and advertising sales for the 2011 directory. Team members “are very upbeat and expect a better year overall,” she said. On the club side, membership growth is exceeding forecasts and currently totals about 950,000. Good Sam Club members average 62 years of age and are typically retired, empty nesters. However, she added, the club is always trying to recruit younger members.
Eric Stumberg, president and co-founder of Wi-Fi provider TengoInternet, Austin, Texas, reported that TengoInternet’s acquisition of Nomad ISP is complete with Nomad’s clients integrated into Tengo’s in May, bringing its market penetration to some 800 parks and between 67,000 and 100,000 guests a month, depending upon the season.
Wi-Fi remains a key criteria in RVers’ decision on where to camp, he noted. He sees mobile point of sale terminals, such as an ice cream cart that accepts credit card swipes, becoming the next popular phase in parks and campgrounds. He is targeting 25% growth for 2010.
David L. Berg, ARVC chairman and owner of the Red Apple Campground in Kennebunkport, Maine, said business appears to be “back to where we used to be.” He had sold out his 140 sites for the July 4 holiday by Memorial Day and his tent and popup trailer sites sold out first for the first time ever.
Berg, at the same time, said he remains “boggled” by the growth and popularity of the cabin business. He charges $120 a night for a cabin, even though “the motel down the street charges $29.” He can explain the willingness to pay more because customers “want it all today, the safety, the experience…” He also is getting into the RV rental market, charging about $1,000 a week to rent a unit on-site.
Al Johnson, president of Recreational Adventures Co., an 11-park chain based in Hill City, S.D., reported “an exceptional Memorial Day” and stated that nine of his 11 KOA-affilitated properties are ahead of plan so far this year. He has begun to replace aged cabins with new park models. He is putting on hold an overhaul of RV sites until he can better determine size requirements for the next RV generation. He, too, saw more guests with tents and folding camping trailers last year, but said it’s too early to tell whether that trend will continue this year.
David Gorin, who wore multiple hats to the forum as a campground consultant, ARVC lobbyist, park owner and state association director, reported that his Holiday Cove RV Resort in Bradenton, Fla., experienced a 25% increase in business last year, with his rental business up 20%-25% annually.
Gorin says he sold approximately half of the lots for sale in his park in the last 19 months. As director of the Virginia Campground Association, he said that state’s parks are looking for a good year, but that they’re concerned about whether the Gulf oil spill will make its way eventually up the East Coast. Meanwhile, Gorin says his Best Parks in America network has grown from 22 to 63 parks in the past year, has recently finished a long-term strategy session and will be publishing its first print directory. Finally, Gorin announced that he will be building a new 250-site RV park in Palmetto, Fla.
Ann Emerson, ARVC Business Forum chairwoman and vice president of Woodall Publications, publisher of the Woodall’s North American Campground Directory, Ventura, Calif., said sales consultants are reporting overall that most parks are doing well. In general, parks near metro areas are still faring better than those in remote areas. And there’s a serious concern among tourism-related business operators — parks among them — in many Southern and Southeastern locales regarding the long-term impact of the Gulf oil spill, prompting some owners to defer decisions on marketing expenses.
Emerson began a discussion on the explosion of social media in the campground business. At her parent company, Affinity Group Inc. (AGI), parent company of RV Business and Woodall’s Campground Management, almost all the websites have a Facebook page and each publication has at least one staff member assigned to increase its social media presence and AGI is developing a SmartPhone “app” for both of its campground directories. This discussion elicited comments on mobile marketing, which fueled a wider discussion on the explosion of mobile phone use in society. Some 90% of all U.S. homes have cell phones, and a significant percentage of Woodall customers have SmartPhones, she said. Stumberg noted that one study showed that almost as many people today access the Internet via their SmartPhones as from personal computers.
Bruce Hoster, president of Coast to Coast Resorts, the membership camping wing of AGI, said, “We think membership camping is due for a renaissance.” He cited a number of ways Coast to Coast is attracting new parks and members to the concept. As an aside, he observed that membership campgrounds are finding new revenue streams by developing storage facilities for their members’ RVs while they are not camping. For example, one membership park developed a 7-acre storage facility and realizes an estimated $1 million in revenue in annual storage fees. He reported that Camp Club USA, AGI’s discount camping club, “has come back strong after seeing a slight dip during the recession” with high renewal rates and is up to nearly 50,000 members. Coast to Coast, which has taken membership camping under its wing, sponsored a membership camping conference in February in Las Vegas and will sponsor another in February in New Orleans. He is working to make inroads with developers of hotel and condo complexes to consider integrating campgrounds into their projects, he said.
Pat Hittmeier, president of Kampgrounds of America Inc. (KOA), Billings, Mont., said camping was “soft” over the winter, hindered by cold weather in its Southern campgrounds. But it’s taken off since May and was up 7% through Memorial Day. KOA is projecting an 8% increase through Labor Day, said Hittmeier, adding that use of the Internet to make reservations is up 12% over last year, a reflection of more business in general and the migration of campers to the Internet.
KOA has 4,000 units in its lodging pool and that business is strong, he said. Lodges make up 13% of the total KOA sites, but the company is aiming to raise that figure to 20% at 50% of its campgrounds. KOA also is looking to increase its first-time visits, which now make up 15% to 19% of its total guests.
ARVC loyalist Ian Steyn, owner of Jellystone Castle Rock Campground, Castle Rock, Colo., noted that his business is up 38% year-over-year, and 2009 was a good year for his business. He discussed an integrated approach to promoting the outdoors with other hospitality businesses in his community seeking to make it the epicenter for outdoor recreation in his state.
Larry Weaver, park model sales manager for CrossRoads RV, Topeka, Ind., briefly outlined the preferred park model program his parent company, Thor Industries Inc., has established with ARVC. Weaver stressed that campground owners should make sure they buy “ruggedized” park models for their rental units and refrain from features such as carpeting that will not hold up well under the rigors of long-term use.
Mogens Hermansen is what you’d call a working Snow Bird.
He lives in Memphis, Tenn., but spends much of the winter enjoying the sunshine in southern Alabama.
But unlike most Snow Birds, Hermansen and his wife don’t have to worry about trying to reserve a site for their 45-foot Beaver motorhome. They own an RV site at Bella Terra RV Resort in Foley, Ala. (Learn more about Bella Terra in today's Featured Video.)
“It’s our home away from home,” said Hermanson, 59, a full-time operations manager for a global packaging company.
In fact, their RV site at Bella Terra is not their only home away from home. The Hermansens also own a site at Traverse Bay RV Resort in Acme, Mich., where they like to enjoy the summer months.
The Hermansens are part of a growing number of RVers who are purchasing RV sites at upscale RV resorts across the country.
“This segment of the industry is generating increasing attention from consumers,” said Linda Profaizer, president and CEO of the National Association of RV Parks and Campgrounds (ARVC) in Larkspur, Colo.
While most campgrounds, RV parks and resorts rent their sites by the night, week or month, there are growing numbers of parks that have started selling their sites, particularly Sunbelt parks that cater to Snow Birds.
Nationally, more than 25,000 RV sites at nearly 200 RV parks and resorts are privately owned, according to David Gorin, a longtime campground industry consultant and principal of MacLean, Va.-based David Gorin & Associates.
That’s still a fraction of the market, when one considers that there are more than 8,000 private campgrounds and RV parks nationwide. But it is a significant trend, and an attractive investment option for working professionals, empty nesters and retirees who want to spend all or part of the winter in the Sunbelt, said Gorin, who also owns Holiday Cove RV Resort in Cortez, Fla., which offers RV sites for sale.
While prices for RV sites vary from roughly $50,000 to $250,000 or more, depending on the park’s location and amenities, the numbers make sense for Snow Birds who plan to spend extended periods of time in the Sunbelt.
“If someone comes down and spends $3,000 or $4,000 a year every winter in Florida, and let’s say they come down five years, they have already invested $20,000 in Florida,” said Eduard Mayer, president and CEO of Elite Resorts Management Inc., which has developed several RV resorts in Florida that sell their sites. On the other hand, many consumers do not want to commit themselves to a single location, which is why most people rent RV sites, Profaizer said.
Most RV resorts that sell their sites also set up rental pools, which enable RV site owners to generate income from their campsite when they’re away. The resorts take a percentage of the rental income to cover their management services.
The economics of modern RV resort development are also leading growing numbers of private park developers to build upscale resorts that sell their sites. “When you consider the cost of land in attractive locations, the cost of design, engineering, permitting and construction costs, it’s almost impossible to justify building a new park for a rental market only,” Gorin said.
And while the downturn in the economy has taken a toll on RV site sales, some RVers have found that they can purchase RV sites through their Individual Investment Accounts (IRAs) and 401K plans, said Tripp Keber, COO of Bella Terra Resort, which recently announced plans to begin building its second phase. “With the income that can be realized through our rental management program and the lot’s appreciation, this represents a great investment,” Keber said.
Many RV enthusiasts also like the upscale nature of RV parks and resorts that sell their sites as well as the convenience of owning their own site.
“The advantage of owning our own site is we can come and go as we please,” said Emile LaChance, an Ontario, Canada, resident who recently purchased a site at Silver Palms RV Village in Okeechobee, Fla. “If you’re renting a site,” he added, “you’ve got to be on a schedule.”
Looking to the future, Gorin said the concept of owning an RV site will continue to grow in popularity, especially in highly attractive vacation destinations and in resort locations within a two-hour drive of major cities. Gorin added that the development of new, upscale RV parks and resorts that sell their sites will also create a new supply of modern RV sites for the rental market.
Between 2000 and 2005, as real estate prices rocketed to unprecedented levels, developers pulled out their wallets and encouraged owners of RV parks and resorts to sell their properties because they wanted to replace them with shopping malls – all more lucrative uses of these properties, or so they thought.
As the real estate market has tumbled, however, many developers have not been able to get very far with their plans, and several of the RV parks and resorts they acquired have not only survived, but prospered during the current economic recession, according to a release from the National Association of RV Parks and Campgrounds (ARVC).
In fact, one lesson that developers have learned is that high quality RV parks and resorts are more economically resilient than hotels, shopping malls or condos, particularly when investments are made to improve these parks.
“Camping is a recession-proof business,” said David L. Berg, ARVC, adding that most of the nation’s campgrounds, RV parks and RV resorts have reported stable to slight increases in income this year, despite the recession.
Berg cited his own campground as a case in point. The park, Red Apple Campground in Kennebunkport, Maine, scored an 8.5% increase in business compared to last year, while hotels and motels in his area saw their business drop by as much as 25 percent. “Camping is more family oriented and more reasonably priced than other travel and tourism options,” he said, adding, “The state of affairs of our economy has not hurt the camping business at all.”
Developers, on the other hand, have mistakenly assumed that land is always more valuable when it’s used for hotels, shopping malls and condominiums. While this kind of thinking may apply to poorly maintained RV parks, in resort destinations, high quality RV parks and resorts remain economically resilient, even when times are tough.
Consider the story of Emerald Desert RV Resort in Palm Desert, Calif., one of the top winter vacation destinations in the country. Several years ago, Scottsdale, Ariz.-based Taylor Morrison bought the park with plans to replace it with high-end housing. But the recession pulled the rug out from under the real estate market before Taylor Morrison could finish its project. And while Taylor Morrison had converted portions of the RV resort to housing, the rest of the resort remained standing, including all of its RV sites, clubhouse and other core buildings, which prompted the company to put the RV resort back on the market.
La Jolla, Calif. based SunLand RV Resorts bought Emerald Desert last summer and plans to keep as a resort. “I’ve had my eye on this property for 20 years,” said Reza Paydar, SunLand president and CEO. “It is very valuable. There is nothing like it.”
SunLand, in fact, has already invested more than $1 million in improvements to the 251-site property and plans to operate it as a year-round luxury RV resort. It’s newly designed 1,200-square-foot lobby features a custom designed floor mosaic and reception desk with inlayed stone. Luxury furnishings are also being added to the newly designed fitness center and swimming pool area.
Meanwhile, the economic downturn has given La Pacifica RV Resort in the San Diego, Calif. suburb of San Ysidro a chance to assert its economic resiliency. An investor purchased the property several years ago with the idea of re-selling it to a housing developer. But as the real estate market tanked, the investor’s plans evaporated and he wound up selling the property to another investor, Bart Thomsen, who plans to make improvements and keep La Pacifica as an RV resort.
“The park is in very good condition already. But we’re absolutely intent on making it an even better place,” Thomsen said. “We’re putting money into fixing up the bathhouse and clubhouse and investing in better utility pedestals and making improvements to its streets. We’re planning on it being an RV park for the long haul.”
Developers’ plans to convert RV parks and resorts to other uses have not only been put on hold by the recession. In some cases, local residents and businesses and city officials have discouraged them from replacing RV parks and resorts, which they value as important pillars of a tourism economy.
Consider Holiday Cove RV Resort in Cortez, Fla. A few years ago, the property was purchased by an owner who wanted to replace it with condominiums, but the developer ran into opposition from local residents, businesses and city officials. “They claimed the plan was out of character for the community and they were concerned that residential use wouldn’t support the local businesses that are geared primarily to the tourist and vacation business,” said David Gorin, who recently purchased park from the developer. “The previous owner was simply unable to get the zoning and planning commission to approve his plan. He fought with them for five years and then gave up and sold the property to us.”
Gorin and his business partner have since invested $1.4 million improving the property and making it into a high quality RV resort.
These investments in RV parks and in RV park improvements are paying off because camping and RVing enthusiasts have shown a consistent willingness to pay for parks that offer high quality facilities, amenities and service, said Linda Profaizer, ARVC president and CEO. RV parks and resorts are also aided by the fact that they offer the nation’s most affordable vacation option, she said.
John Grant, owner of San Diego-based Park Brokerage Inc., said growing consumer interest in camping and RVing is also helping RV parks and resorts to retain their real estate and business value during the worst recession since the Great Depression. “RV parks are holding on to their value because people are downsizing their vacations, taking their RV or tent and going camping,” he said. “This translates into higher property and business values for parks.”
With the developers confident in growing demand for quality RV sites in Florida, Holiday Cove RV Resort, Cortez, Fla., announced a price increase on selected RV sites effective Nov. 1.
With just 66 sites remaining and with the resort experiencing strong and increasing interest in the purchase and rental of sites, the price increase will bring the site pricing closer in line with the demand, according to a news release.
In today's economy, many RVers are staying closer to home (a new trend known as staycationing) and seeking good locations and value. Many families, empty nesters and retirees are taking to the highways this year. Today's economy might not leave room for a weeklong Caribbean cruise, but a growing number of people have sought more cost-effective vacations in well located RV parks. In addition, Florida lot owner RVers reap the benefit of the Florida lifestyle and beaches without the concerns over property taxes, property insurance or mortgage issues which discourage many potential home buyers.
Holiday Cove was completely remodeled in the last quarter of 2008. In addition to the all new generously-sized brick paver RV sites and patios, the resort has 34 boat slips on an intercoastal canal a quarter mile to the Gulf of Mexico. Fishing from the resort boat docks and canoeing and kayaking along the waterway are just two of the on-site recreational activities available. A newly remodeled clubhouse, heated pool and sun deck and a fitness center are other amenities.
The resort is less than a mile from Bradenton Beach and within easy walking distance of restaurants, shops, fishing, boat charters and all water sports. Golf courses, theaters, shopping, spring training baseball and all kinds of festivals and special events are all within minutes of the resort.
"Sales and rentals have been very strong and interest is growing each day," said developer Ed Rymer. "Our phone is ringing off the hook and we know we've got a very unique product in a very exciting location at a great value. RVers are responding."
As ownership RV resorts throughout Florida are cutting prices and giving away all kinds of incentives to get people to buy," said Rymer, "we realize we have a unique product in a great location."
"There's a diminishing supply of quality RV sites in Florida and there are very, very few RV sites in a location similar to Holiday Cove," said David Gorin, Rymer's development partner. "There's no more cost efficient way to assure the availability of an RV site this close to the beach and the Gulf, than to own your own RV site. And with very strong winter and summer demand, the value of Holiday Cove lots is assured."
The new Holiday Cove RV Resort was developed by Rymer, an experienced real estate developer, and Gorin, former president and CEO of the National Association of RV Parks & Campgrounds (ARVC), president of Best Parks in America and a well-known consultant in the RV park industry.
Prices at Holiday Cove currently range from $85,500 to $179,000. Price increases on most sites will be in the 5 - 7% range.
For information on site sales at Holiday Cove RV Resort, visit www.holidaycovervresort.com or call Ryan Billib, sales director, at (866) 580-5020.