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Why, some may wonder, would a successful park like the Wagon Wheel Campground in Shelby, Ohio, give up its independence and join Kampgrounds of America Inc. (KOA)?
After all, Wagon Wheel was owned and operated by the same family since 1968. And, by all accounts, it was a fruitful operation whose success continued after Verne and Violet Cole sold the 92-site family business to their son, Gary, and his wife, Vicki, in 1991. But while business was strong enough to enable the second-generation Coles to double the size of the campground to 200 sites, they joined KOA as franchisees in 2002.
It was a tough decision, Gary Cole told RV Business, but they have no regrets. “This year,” he said, “we’ve had visitors from 44 states. That would have never happened if we had continued to be an independent campground. We wouldn’t have had visitors from half of those states.”
KOA, Cole said, has more marketing power, both through its brand name and Internet presence, than most independent campgrounds could ever hope to achieve on their own.
Other independent campground operators have reached similar conclusions. “Even during the slow months, our business is up 20% to 25% from what it was,” said Eleanor Ranniker, manager of the former Southern Oaks campground in Perry, Fla., which joined the KOA fold in October 2005. She said the campground especially benefits from KOA’s live Internet reservation system, which gives consumers the ability to instantly check campsite availability and to make reservations using a credit card.
Ranniker says her park also benefits from the company’s corporate accounting systems and procedures, which have been fine tuned with years of experience involving hundreds of campgrounds across North America. “The bookkeeping and accounting is so easy,” she said. “Plus, all of the KOAs work together. It’s like, you scratch my back, and I’ll scratch yours.”
But the biggest benefit, she said, beyond the Internet exposure and standardized accounting, are KOA’s field representatives, who are available by phone and in person to coach campground operators through virtually any problem, from front desk operations to deciding how to reconfigure one’s campsites or to install cabins — and their services are covered as part of KOA dues.
Same goes for Mary Wilson, manager of the former Clewiston-Lake Okeechobee Travel-L-Park in Florida, which joined the KOA network three years ago. “It’s the exposure, the marketing, the technical support. Anything you need, you call them and they’re there,” she said. And while it’s true that KOAs have to contribute 10% percent of their gross margins to corporate (including 8% royalties and 2% for marketing), Wilson and other converts say the cost is more than offset by the additional business KOA and technical support that KOA provides to their parks.
All of this, of course, is music to the ears of Jim Rogers, KOA’s president and CEO, who vowed since he joined the company in 2000 to take KOA “from good to great.” Widely admired in the campground business for his enthusiasm and knowhow, Rogers is continuing to attract growing numbers of independent campground operators into the KOA fold. And he’s done it by setting a good example by making KOA parks more profitable, better run, and more attractive to consumers.
In fact, Rogers maintains, KOA has achieved a 15-point increase in guest satisfaction during the past four years alone while growing both revenue and occupancy, despite rising fuel costs which historically have put the damper on travel plans for many RV and camping enthusiasts.
Rogers has done this by spending a small fortune on annual guest satisfaction surveys, which arm each KOA campground operator — as well as corporate headquarters — with what Rogers calls the “brutal facts” about their operations. While some parks readily embraced the survey concept, others initially rejected the methodology. Eventually, however, parks have realized that they stand more to gain by putting their preconceptions aside and listening to their guests. “Every campground owner thinks they run the best campground in America,” Rogers said. “They don’t.”
But the willingness of campground operators to accept this fact and to improve their operations based on guest feedback on an ongoing basis, he argues, will eventually lead them to success.
About 250,000 KOA campers are surveyed each summer, and approximately 85,000 return the completed surveys each year. “We measure 37 dimensions of satisfaction,” said Erik Gothberg, KOA’s director of brand products and services. “The survey helps campgrounds understand who their camper is and what makes them happy. With that information, we’re able to make the right adjustments to improve their campground. That’s something no one else does.”
These surveys have, in fact, produced results. “Systemwide, KOA has improved overall customer satisfaction from 45% to 60% during the past four years,” Gothberg said. “We have twice as many compliment calls and half as many complaints as we did a year ago.”
KOA corporate, by the same token, has also used these surveys to pinpoint troublesome parks within its own network. Indeed, the size of the KOA camping network dropped after Rogers took the helm. This reflected attrition as well as Rogers’ deliberate efforts to remove parks that were either unable or unwilling to step up to the plate to meet KOA’s improving standards.
Rogers’ approach, in fact, has been to improve KOA before expanding the network. The Billings, Mont.-based franchise had 438 parks as of late summer, down from 508 in 2000, when Rogers took the helm. But Rogers has put in place a program to push the number back up to 500 by 2010.
The expansion will be fueled in part by conversions of independent parks because it’s easier to convert existing facilities than to build new campgrounds from scratch. “It’s not easy,” reports Pat Hittmeier, KOA’s vice president of system development, “because a lot of entrepreneurs out there are doing just fine.”
He added that the best conversion opportunities usually materialize when a campground operator is looking to do something major with their business, such as expand their market base. This means that KOA needs good market intelligence to spot these opportunities. Consequently, the company is working closely with campground real estate brokers to look for these kinds of opportunities.
KOA is also aiming to sweeten its allure with a new incentive, which it plans to unveil in an advertising campaign this fall: If independent campgrounds that join the KOA network aren’t fully satisfied with their decision to franchise their business after their first two years, KOA will refund their initial $22,500 franchise fee. “This puts our money where our mouth is,” Hittmeier said.
KOA has also teamed up with Independent Bank in Montana to provide campground operators with favorable financing rates for park improvements.
KOA, meanwhile, is finding new ways to improve guest satisfaction. The company recently partnered with LRA Worldwide Inc. to offer customer service training to staff members and owners at its national network of franchised campgrounds. The new “Making it Great” program, jointly designed by KOA and LRA, provides specialized materials, guides, videos and workbooks written to ensure all staff members at the more than 450 KOA locations in North America receive the same comprehensive customer service training.
“This is really the first time this level of training has been attempted in the campground industry,” Rogers said. “And it dovetails nicely with our effort of the past two years to raise our brand awareness among campers by having all staff members wear our bright yellow KOA shirts while working on the campground and interacting with guests. As the training becomes an ingrained part of the KOA service culture and brand, its impact will grow exponentially each year.”
Considering these initiatives and the successes of recent KOA converts in Florida and Ohio, the company should have no trouble convincing independent parks of the merits of KOA franchise. Rogers, for his part, is excited about KOA’s future and about the future of the camping industry. “A total of 1.2 million family tents were sold last year,” he said. “That’s four times the number of RVs sold.”