After Kampgrounds of America Inc.’s (KOA) senior management team completed its main presentations at the outset of the organization’s International Convention Nov. 15-18 in Phoenix, Ariz., President and CEO Pat Hittmeier and COO Toby O’Rourke paused for an interview in which they shed some light on the impressive year-end report Montana-based KOA issued during the gathering. Fully 90% of KOA’s parks, they told some 600 attendees, posted gains in 2017.
Here’s an edited look at that conversation conducted by Woodall’s Campground Management, sister publication to RVBusiness, at the Phoenix Convention Center with Hittmeier and O’Rourke, whose 55-year-old company currently oversees a system of about 500 U.S. and Canadian parks, 30 of them company owned.
WCM: Everything appears to be coming up roses for KOA right now, judging by the presentations we’ve just observed, just as it has for much of the RV park and campground sector and the RV industry at large. Is that your take?
Hittmeier: Yes. It is very good. I mean it’s six years of continuing growth and as (Thor Industries Inc. President and CEO) Bob Martin pointed out in his video during the convention, we don’t see an end to it. There’s a lot of momentum and I characterize that momentum as meaning a lot of energy associated with the progress that we’ve made as a company and as a brand and our campgrounds, and then the overall business climate we’re in.
Park operators just have to take advantage of it and grow with it. And I think it bodes well for a fantastic future for our campgrounds, the RV industry, outdoor hospitality, all of those things. And it’s good for society as well.
O’Rourke: It’s not just the increase of campers coming in. It’s also the resurgence of interest in the outdoors, a trend that’s attracting the attention of large investment companies. People are seeing the value in campgrounds and are investing in existing parks and building new parks – inside and outside of KOA – more than we’ve ever seen before. So, there’s just a lot of interest in the general marketplace about camping. People see it as a very profitable venture.
WCM: With regard to KOA’s future goals, it sounds as if expansion – growing your system from, say, 500 to 600 parks – isn’t the main goal at hand as much as honing the skill sets of the independent parks that already are in the system.
O’Rourke: Yes, we’re very strict on the quality of the campgrounds that we approve to come into the system. We’ve got standards in place that have to be met for all of our parks and a quality review process that every campground undergoes.
And, as Pat mentioned this morning, there’s really no one holding back the system anymore. You know, I think historically there may have always been a few (substandard parks) in a system this large. But all of our parks today have elevated in the modernization of their facilities and in improving their guest services. Having said that, we’re very particular about who we let in. So it’s not a numbers game for us; it’s a quality game.
WCM: So, which of your corporate initiatives for 2018 do you find most intriguing and challenging that you’d like the industry at large to know about?
O’Rourke: Well, I think from a message standpoint, if we’re going outside the walls (of KOA), we’re still very focused on the brand positioning program. We have the goal to have everybody in a position as a branded park (designated as a KOA Journey, Holiday or Resort) by 2020.
So, now, with about 163 parks left to bring in, it’s a big focus for us, and I think the message to the industry is we’re going to hit it. We’ve got really good momentum. Everyone’s on board and committed. There are a few stragglers here and there we’ve got to work on, but I’m fully confident we’ll get every campground on by 2020. And five years ago when we were first launching it, I think a lot of people wondered if we ever would. So, we’re pretty committed to that within the next year.
WCM: Why, for the uninitiated, has KOA placed such a priority on this new system through which parks are branded according to the level of their services and facilities?
O’Rourke: Well, we’ve got such a vast system and we have so many different types of parks, we wanted to recognize that variety in our parks and allow them to be marketed in their own right for truly what they are. For example, an overnight park is not a KOA Resort. It doesn’t mean it’s any less important to our system, but we want to market it accordingly.
And also this is about setting expectations for the guest to know what to expect. Not every KOA is the same, and we want to set the expectations on those experiences. The bigger benefit we’ve seen is the investment in our campgrounds, the improvements of the sites and facilities to meet the criteria for brand positioning. So, it’s elevated our whole system, and a lot of the growth you’re seeing today is a result of the past five years of investment in our parks and a focus on the improvements that are getting us to where we are right now.
Hittmeier: When we started this initiative to improve the professional way that we manage our properties as they relate to the customer — the camper — our scores from the perspective of the guest were pretty marginal. And to have made the kind of progress we have by simply focusing time and attention on it, I think, is pretty amazing. I’m not sure how great service companies are born, if they initiate themselves and start out that way, or if they’re reinvented. And I think that KOA has been reinvented that way.
I think it’s pretty unusual to find a company like KOA that was able to take something that may have been mediocre only a few years ago and create this presence of excellence within our ranks and our campgrounds as it relates to the customer. I think I’m more proud of that than almost anything I can think of that we’ve accomplished, and it’s really on the backs of our campground owners because they have changed. They look at the world differently. They see the customer differently. They know that they have to provide that kind of service if they’re going to be successful and they’ve done it.
WCM: Another takeaway from your on-stage presentations was the emphasis that KOA’s been placing on marketing in general across the board in recent years.
O’Rourke: Yes, we shifted our marketing strategy six, seven years ago toward what we call broad-based awareness tactics. We introduced TV, digital advertising for the first time, upped the amount of money we invest in research, and that’s all been driving the increases in our awareness. As a result, you’re seeing online reservations tick up, more campers coming in, more loyalty.
I think the transition in our marketing has probably been the biggest fundamental change at KOA in the past few years for sure.
Hittmeier: While we’ve done a fantastic job of focusing dollars where they need to be spent, what I find most intriguing is that with six consecutive years of growth, not only did the registration revenues and the profitability of our campgrounds grow, but our ad fund is so much bigger than it was five years ago. We have a lot more money to spend on marketing than we did even five years ago. So we’re able to do so much more and, at the same time, be very efficient on how we deploy it. And so, it’s a cumulative effect and it’s quite dramatic and I think that’s a real key point of why our success is going to continue.
O’Rourke: We’ve shifted to a new ad agency this year – MMGY Global — that really has just spent most of the year learning about us, trying to understand the brand. So we’ll start to see their work next year. They’re a travel-focused company. They know how people spend their leisure time, and we think that’s going to help our space in thinking about it that way, right? How do we capture people’s leisure time because time is so precious? How do we get them to make that decision to come camping versus going somewhere else, going to a hotel or taking another type of vacation?