The campground industry ability’s to overcome the rash of economic headwinds this year was a key topic during the Kampgrounds of America Inc. (KOA) 2008 Jamboree, Nov. 8-10 at the Sheraton Myrtle Beach & Convention Center in South Carolina.
President Shane Ott noted that at KOA’s 2007 convention in Phoenix, the Billings, Mont-based firm and its franchisees were celebrating the best year in its 46-year history.
“While we might have guessed that we would be challenged by higher fuel prices in 2008, I doubt last year at this time we could have said we’d see gas over $4 a gallon,” said Ott, addressing around 600 attendees. “And who would have guessed that we’d see the near collapse of worldwide stock markets on the eve of a presidential election? But before you think that our current challenges are unprecedented, let me tell you about a conversation I had a few weeks ago with one of KOA’s original home office executives, Jerry Hanson. Jerry reminded me about living through the Arab Oil Embargo of the late 1970’s. For those of you old enough to remember – and yes – I’m old enough – it was a time when it wasn’t just the price of gas, it was the fact that there wasn’t any gas at all.
“Jerry also reminded me that Kampgrounds of America is a tough survivor. In our 47-year history, we’ve been punched in the nose by circumstances before, and we’ve always come through. As I think we’ve all been reminded this year, you never want to go through challenging times alone. Being part of the KOA system means that there are literally hundreds of helping hands out there, ready to pick each other up when one of us gets knocked down.
“Remember,” he added, reiterating the theme of the Jamboree, “together we thrive.”
Having said that, Ott reminded the franchisees that KOA has been in a rather enviable position relative to the rest of the U.S. and much of the recreational vehicle business. That fact was borne out in the company’s annual report, which Ott reviewed in detail at the Jamboree.
“When you’re living through a year like this, it’s easy to feel overwhelmed by circumstances,” said Ott. “But folks, I’m here to tell you that the downturn of 2008 feels really, really bad right now because things for the past several years have been really, really good for the KOA system. Despite everything we’ve been dealing with the past few months, 2008 will go down as the second best year – in terms of revenues – in the 47-year history of KOA. We, as a system, are generating more revenue than we did even in 2006, which was also a very good year.
Indeed, in the face of an emerging recession in 2008, KOA, which currently has 460 parks, 28 of them company-owned, is currently looking at a relatively softer yet respectable performance, with:
• Nationwide camper nights off 6.6%
• Total registration revenue slipping only 2.9%
• A steady growth through 2008 of nearly 39% in total registrations over the last 10 years.
• Regionally, Northwest KOA’s were off 10.7% in camper nights and down 5.5% in registration revenues from 2007. The Southwest dipped 7.2% in camper nights and 2.3% in registration revenues. The North Central zone slipped 7.2% in camper nights and 4.5 percent in revenues. The Southeast, with its snowbird crowd, edged down 7.3% in camper nights and 5.5% drop in revenues, while the Mid Atlantic region retreated 6.9% in camper nights and 1.9% in registration revenue and the New England area slowed 8% in camper nights and 2.6% in revenues. North of the border, Eastern Canada camper nights were down 1.3% and revenues up 3.7%. And although camper nights were down about 6% in Western Canada, registration revenues were actually about flat with 2007 year-to-date.
• Regarding the various types of parks, or “segments” that KOA tracks, “attraction campgrounds” – those deriving more than 40% of their camper nights from campers registering for two to 28-night stays – were down 7% vs. 2007. “Overnight parks,” with more than 35% of their camper nights stemming from guests registering for one-night stays, were down more than 8%. “Snowbird/seasonals,” where more than 60% of camper nights stem from 29-plus night stays, have seen a 3% dip, while business at “combination campgrounds,” those that don’t fit firmly in any one category, slipped 7% in 2008.
In his turn at the podium, KOA Chairman and CEO Jim Rogers told the Jamboree attendees that they, as entrepreneurs and sole proprietors who control their businesses and don’t have shareholders or boards of directors to answer to in most cases, are just what the country needs right now to lead it out of its economic malaise. “You don’t have to deal with those demands,” said Rogers. “You have the ability to continue to take risks, grow your business and remain as enthusiastic as you are. We have to remember that. This economy, this country needs you right now. You create and make revenue every day.”
Rogers also maintained that KOA’s operators, who continue to reflect a younger demographic, will not only survive – but thrive – as the nation emerges from the current downturn.
In other news, KOA’s management team reports:
• The company’s 6-year-old Kamper Satisfaction Survey (KSS) reflects a 6.5-point increase in four years for overall camper satisfaction. Those KSS surveys also indicate that one out of five campers in the KOA network this year had never before been to a KOA.
• Launching the company’s upgraded online Value Kard Rewards loyalty program in March proved to be a challenge, according to Marketing Vice President Lorne Armer. “That (the launch) went very well,” said Armer, “but there are some things that didn’t end up quite like we expected so far. Our projection was that by the end of the year, we wanted to have 262,000 (individual campground sales) of Value Cards from all sources. We think that by the end of the year it’s going to be 210,00.”
• Despite the vagaries of the current economy, the KOA network of franchise parks grew marginally in 2008. “You might think that with all of the challenges that came with 2008, that we should have seen a steep decline in the number of campgrounds added to the KOA system,” said Ott. “You’d be right to say that it certainly is more challenging, but it’s also been a year when a lot of independent park owners decided they no longer wanted to do this alone.”
• KOA plans to expand its new partnership next year with Australia’s BIG4 Holiday Parks, according to Rodger Powell, chairman of the 175-park concern. Part of that linkage involves cross-training employees.
• The cabin business continued to grow among KOA’s parks, just as it is among many of the nation’s other RV parks and campgrounds. Occupancy of KOA’s “Kabins” and “Lodges” grew 2% in 2008
• The Montana franchisor has announced a unique partnership with Thor’s Airstream Inc. subsidiary to station the classic towable RVs at participating parks.
• Since KOA started the Come Camp and Care With Us charitable event in 2004 to assist kids with cancer, KOA has gone from raising a total of $29,000 its first year to $250,000 this past May. In 2008, more than 370 KOA campgrounds participated in what has become one of the industry’s true charitable success stories.
• The fact that 100% of KOA’s parks have now adopted the KampSight reservations program has greatly enhance the company’s ability to track progress and report various data. And plans call for further integration of the system in 2009.