Starting a new RV campground...

[cooljim]

What would be the best way to go, and what are the benefits and downfalls of starting a newly constructed campground in an underserved area?

Franchise vs. Independent
urban vs. rustic
restrictions vs. inclusions
pets vs. no pets

Thoughts?

[Walaby]

You shoulda said you wanted to build a hotel... then people would convince you it's better to build a cammpground (grin).

Seriously, I think you've gotten some good input here. Hope you take it into consideration. Good luck.

Mike

[soren]

RGar974417 wrote:
I am an electrical contractor and Mayor of a small Borough in Pa. In our state,it is so hard and expensive to build anything new with all the regulations. I would suggest buying an existing campground and then make it into what you want.

I had a conversation with a CG owner up near the PA. Grand Canyon. He had attended a workshop at the state CG owners gathering. One topic of discussion was a woman who really wanted to create a new CG in PA. She had money and drive, but she really was unable to convince any of the seasoned oldtimer owners that she was making a wise decision, based on the anticipated ROI, and the stupid amount of hoops you need to jump though trying to get past the endless PA. bureaucracy. I also had a business associate, a few years back, who really put a lot of effort into buying an existing PA. campground. He had a million dollars to put down on a deal, and spent over ten grand in his search, a lot of it on his accountant, reviewing books. He reached the conclusion that a lot of CGs for sale only really functioned, and often barely at that, based on the fact that they were family owned, often for generations, and never valued the real estate in their thinking. Until they decided to sell. At that point, the value of the ground, weighed against fairly weak net income from the CG, typically meant that purchasing the business made little sense.

We currently live in Lancaster county, which pretty much validates the problem. Eight million tourist a year, mostly in my neighborhood, the "Amish Country" east of the city. There are a half dozen CGs here, that are jamb packed all summer, with hefty daily rates, and all of them are decades old. OTOH, you can't swing a cat in these parts without hitting a hotel, and they keep building more new ones.

[SDcampowneroper]

Mr. Boyd, (OP)
Thank you for your service. We have the freedom to travel many nations by many means under the protection your service in uniform secured.


Back to your question, in my original response I indicated the importance of education and hobnobbing with industry professionals at conventions . That is only a starting place. Of course you are aware of the infrastructure, permitting etc. I think you asked here to connect with some of us who have done it.
You have had many reponses to your topic from some in the know, some hopefuls, some wishful.
The in the know are like me or WRVPO, the wishfuls want big pull thrus, on the beach with streaming wifi for gov't park prices, the hopefuls are looking for the impossible. There is no financially feasible way to build new or renovate a run down park that has the features asked for by the previous posters that you could operate at a profit. The land cost alone in a desirable area would drive your rates above what the crowd will pay.
Underserviced areas may be in the eye of the wishful who expects to get a fine site in prime season at the drop of his hat. To get a true idea wheather an area is underserviced, talk to the c of c, look at rvs parked in business lots, why are they there, at dump stations available, at propane filling stations. The attendants of those places can tell you many stories.
From 39 yrs experience, 16 as an owner, elbow room is a must. Pull thrus rate second, design your park with half to one third easy access. There are still good backer uppers out there with rear picture windows who do not want to look out their window at another rv. ( thats me)
WIFI Forget CATV. You must get and deliver enough bandwidth and signal to allow streaming on multiple devices. Figure on 4 mb / site. There are equipment providers like RUCKUS who have throttling routers. Avoid outside WIFI providers. Do your own, with professional help. Cost is prohibitive, service sketchy, as it still must come through the local ip or sat.

[RGar974417]

I am an electrical contractor and Mayor of a small Borough in Pa. In our state,it is so hard and expensive to build anything new with all the regulations. I would suggest buying an existing campground and then make it into what you want.

[wing_zealot]

Flintstones wrote:

Finally, build a quality rv park with modern hookups, think like rv'er when you lay out the roads and sites, and do pull thru's for a good amount of sites. Groups that rally like pull thru's best. Pull thru's are easy and you are less likely to get damage to landscape or utilities.

Won't happen. Pull through sites are wholly inefficient to develop. Costs twice as much per site (or more) to develop. Not economically feasible.

[gbopp]

Now that the OP is thoroughly disillusioned with the reality of opening a new RV Campground, he's probably thinking about something more practical and realistic like a pole barn and meth lab...:)

[valhalla360]

WTP-GC wrote:

valhalla360 wrote:

Reality is there is no ideal location. If it was ideal, there would already be a park there. Undeserved areas are typically undeserved for a reason.

This is quite frankly untrue. What you're basically saying is that there's no such thing as an available market. If that were true, then no new businesses would ever be necessary or successful. When Amazon started selling textbooks, it wasn't like that was the easiest or best way to buy textbooks. But over the course of time, they became dominant in that market sector and moved on to bigger and better things. My community has been under-served for years in terms of local retail and eateries. It wasn't because people didn't try to come in and open an establishment, but rather they did so with poor planning. Many came and went, and one might suggest that such businesses were not needed. But those who came and stayed have proved otherwise. It has as much to do with the owner and how its managed as it does with the location (within reason of course).

Not at all. There are undeserved markets but as I said, there is usually a reason.

Example: If you are sitting on 40 acres in the Florida Keys with utilities and beachfront access, there is far more demand than spots available. But if you are trying to build in this under served area, I would be shocked if you could buy a 3 acre site and build from scratch for under 20 million and when you cost out what you can charge per site, there is no way you could amortize, $20million on what the sites bring in (and sites in the keys are crazy expensive).

You run into similar issues in other areas, just not as extreme and sometimes the issues are different. It might be easier to build in the middle of no where but fewer people want to camp there and you can't charge premium prices.

Most successful private campgrounds we've come across (govt campgrounds usually run at a huge loss when you consider the underlying value of the land), are run by families who have saved up and are living the dream but not getting rich. If it's 2nd or 3rd generation and everything is paid off, they may even earn a decent living but when you subtract the expected investment returns, they are usually making little more than minimum wage.

Now if you have the Amazon of campgrounds figured out, wow, I'm impressed. By all means go out and build a string of campgrounds. Of course, Amazon is still running on the dream of someday being profitable.

[Flintstones]

I would look for an undervalued rv park with great potential rather than starting from scratch, unless you have deep pockets. The permitting process can be lengthy and expensive.

I would attend/join any and all rv park owners associations, and business groups in the hospitality industry.

Finally, build a quality rv park with modern hookups, think like rv'er when you lay out the roads and sites, and do pull thru's for a good amount of sites. Groups that rally like pull thru's best. Pull thru's are easy and you are less likely to get damage to landscape or utilities.

[Busskipper]

cooljim wrote:
What would be the best way to go, and what are the benefits and downfalls of starting a newly constructed campground in an underserved area?

Franchise vs. Independent
urban vs. rustic
restrictions vs. inclusions
pets vs. no pets

Thoughts?

Hobby or Business?

Four things are Critical.

!. Location
2. Location
3. LOCATION
4. Level sites

Sounds Easy,:) ... :S ... :h

[WTP-GC]

westernrvparkowner wrote:

Underserved markets may be a illusion. Most of us travel during peak times (there is a reason peak season is peak season). An area that is appears underserved to an outside observer may only be underserved for a few days or weeks. It would be economic suicide to build a facility that was only full during the absolute peak usage. If you did, most of the sites would site idle most of the time. You would never make up the construction and land costs of those fallow sites in the few weeks it was truly "peak". You really need to be able to fill sites for multiple months, not multiple weeks. In the example above, a park on the ocean, in warm climes, is an exception to normal parks regarding occupancy. And such a land parcel would cost multiple millions as raw land, they really need that $1.5 million a year to justify not putting condos on that prime property and walking away rich.

I've seen parks in desolate areas where you wonder what the draw is, yet the parks stay full. Maybe because they turn it into a resort-style place...??? But we recently made a reservation at a COE campground right on the beach for Labor Day weekend that was more than half-empty at the time we reserved. Note that we were late the game on reserving for that weekend and all other places we checked had been booked for a long time. The COE place is nice and gets great reviews, and its the only campground near the beach anywhere nearby.

So I say all that only to illustrate that I think it has as much to do with the "experience" as it has to do with the location. Of course, this is the Southeast, where seemingly everyone has a RV.

[coolmom42]

OP is near enough Nashville to have year-round tourist traffic. And there is a big shortage of sites in that area. There are lots of people on here asking about sites near/in Nashville.

[westernrvparkow]

WTP-GC wrote:
It might be expensive, or it might not. It might be difficult in terms or regulation, or it might not. It might be hard to finance, or it might not. Too many unknowns for any one person to suggest affirmatively one way or another. The cost and impact is really dependent upon what you're willing to put into it.

One idea would be to start small. I was looking at a campground just last night on the internet with less than 20 sites, but it appears to stay near capacity for most of the year. And only some of the sites are full hookup and some don't even have water. But there's only 3 other campgrounds in the area that aren't for members only, so perhaps that area is considered under-served as well.

If it were me, though, and I owned a nice piece of land in a heavy RV area, I'd build a storage facility. I feel that's way more bang for your buck right now.

But since this is mostly speculative at this time, I'll mention this. We stay at a particular place that has an extremely ideal location near the beach. There's over 150 sites at this park. They have a full staff, pool, and some other misc facilities. As a business owner, I used my knowledge to come up with some approximate $$ numbers. At 75% capacity year round (though most of the year they're at 100% capacity), the NET profit would be somewhere around $1.5 million. That's taking into consideration all maintenance costs, employee salaries, taxes, etc. Even if I were 50% off on the number, that's still one heck of a profit. Note that this place is very well established and also started at only a fraction of this size.

valhalla360 wrote:

Reality is there is no ideal location. If it was ideal, there would already be a park there. Undeserved areas are typically undeserved for a reason.

This is quite frankly untrue. What you're basically saying is that there's no such thing as an available market. If that were true, then no new businesses would ever be necessary or successful. When Amazon started selling textbooks, it wasn't like that was the easiest or best way to buy textbooks. But over the course of time, they became dominant in that market sector and moved on to bigger and better things. My community has been under-served for years in terms of local retail and eateries. It wasn't because people didn't try to come in and open an establishment, but rather they did so with poor planning. Many came and went, and one might suggest that such businesses were not needed. But those who came and stayed have proved otherwise. It has as much to do with the owner and how its managed as it does with the location (within reason of course).

While starting small sounds like a good idea, it probably will not work unless you already own the property. The economics of building on only fraction of your land investment just won't work. Also, you will be adding significant costs to the final project. It will cost much more to tie into the first phase and upgrade the facilities and infrastructure from the phase than it would be to build it all to begin with.
Underserved markets may be a illusion. Most of us travel during peak times (there is a reason peak season is peak season). An area that is appears underserved to an outside observer may only be underserved for a few days or weeks. It would be economic suicide to build a facility that was only full during the absolute peak usage. If you did, most of the sites would site idle most of the time. You would never make up the construction and land costs of those fallow sites in the few weeks it was truly "peak". You really need to be able to fill sites for multiple months, not multiple weeks. In the example above, a park on the ocean, in warm climes, is an exception to normal parks regarding occupancy. And such a land parcel would cost multiple millions as raw land, they really need that $1.5 million a year to justify not putting condos on that prime property and walking away rich.
If this is something you really want to do, buy a run down park and rejuvenate it. At least the public opposition, governmental permitting, and basic infrastructure will be less of a hurdle. An existing park can be financed, a new one no way unless you have a long, stellar development history with your financial institution. Great credit and a strong net worth isn't enough to get development financing for a park.
Finally, figure on three years for any new park to become anywhere close to occupied after it is opened. Advertising takes time to reach the masses, even with the internet. Organic search results take months to years to become optimized. Paying for hits will eat up a lot of money. With no reviews out there, you will not get as many guests taking a chance on your new property. You will have to budget the fact that positive cash flow won't happen right away. Have sufficient reserves or that nice new park you build will be owned at a discount by a savvy operator like me who will swoop in and gobble it up at a fire sale price.

[rockhillmanor]

You biggest hurdle is going to be getting a permit for a multiple use sewer system.

I wouldn't invest one thin dime until I was assured that the county would approve/issue a permit for the sewer system.

They have really clamped down on issuing septic fields and in some instances even septic tanks when associated with numerous open dump lines.

[Ivylog]

Way too many variables with only one post by the OP although some realistic advice on the permitting and cost. 20 years ago I didn't find ARVC much help, hopefully that's changed.

About the only reason I'd build another CG is for the same reason you see Hunt Public Storage facilities...a short term use of what hopefully will be a prime location in 20+ years OR a way to grandfather in higher residential density for down the road.

A close to the Interstate, automated, no frills, pull through, overnight CG might meet the above goals.