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Campground use was up slightly in the fourth quarter of 2008 at RV parks owned by Equity Lifestyle Properties Inc. (ELS) and appears to be up again so far this year, ELS management reported in an investors’ conference call on Tuesday (Jan. 27).
“For the first three weeks of the year, we have earned approximately $33,000 per day, about 1% ahead of last year,” reported Michael Berman, CFO, in reference to transient RVers. However, he added, “It appears that our booking window has shortened considerably in comparison to prior years. For example, despite January’s transient growth, February and March are facing about 15% to 20% behind last year.”
As a result, Berman projects a 10% to 12% decline in seasonal and transient RV income totaling about $2 million for the current quarter.
The Chicago-based real estate investment trust (REIT) has a controlling interest in more than 300 resorts in 28 states and British Columbia with more than 110,000 sites. It operates RV resorts under the Encore and Thousand Trails brands.
ELS projects total core RV revenues to be down 2.5% in the first quarter and is projecting flat to 3% growth for all of 2009.
Earlier, ELS reported fourth quarter Funds From Operations (FFO) of $20.6 million compared to $21.8 million in the same period last year.
Net income available to common stockholders totaled $0.0 million versus $4.7 million in the year-ago quarter.
Property operating revenue for the quarter was $110.3 million compared with $91.08 million in the previous year period.
Tom Heneghan, CEO, reported that while the company’s traditional tour-driven membership sales are impacted by new and used RV sales, ELS has already begun to adjust its business model with the introduction of low-cost Internet and alternate distribution channels that focus on the installed base of almost 8 million RV owners.
In answer to a question whether ELS is receiving additional revenues by renting RVs to its guests, management said that particular function is not tracked.
However, Heneghan replied, “I do know that a lot of manufacturers who are sitting on significant amounts of inventory have pushed some of their inventory into a rental experience just to see if they can gain some liquidity. The one thing that is preventing any of that happening in en mass is the floor plan restrictions with respect to that inventory.”
Joe McAdams, ELS president, added, “There are manufacturers, as Tom said, as well as larger dealers who are trying to utilize that inventory someway by renting it. So there is an uptick in the rental business but the rates are down because of the oversupply.”