Owning a campground is often a family business. Dad is usually outside taking care of the grounds and the sites, while mom handles the store, reservations, and the books. The kids and grandkids grow up in the business, taking their turns at the various campground jobs before eventually taking over the entire operation. But family-owned campgrounds might be changing.
Family-owned campgrounds that were purchased for well less than $1 million just a few years ago are now being snapped up by investors for several million dollars. Parents who had planned to transfer park ownership to their children now find themselves with an asset that is either too valuable to just give away or is beyond the financial reach of their kids.
Boom in corporate and outside investor interest in camping, and prices
Mia Caetano Johnson has been a commercial campground broker in New England for the past 12 years. Caetano Johnson’s firm, Northeast Campground Brokers, has seen a boom in corporate and outside investor interest in camping—along with a corresponding boom in prices. Caetano Johnson said she is seeing fewer and fewer “legacy campgrounds” being passed down to the next generation.
“The value of a campground is now based on cash flow, and not real estate values as in the past, and everyone’s values are on the rise,” Caetano Johnson said. “Our industry has now been introduced to many investors who have never looked at campgrounds as a viable investment option. We are now dealing with a whole new group of buyers.”
Caetano Johnson said until two years ago about 80 percent of campground transactions involved a purchase by a small owner/operator (“mom and pop” operations). She said now, 80 percent of campground buyers are outside investors. “They have much deeper pockets, more financing options, and have prior experience running a business,” she said. “One of my fears is that we will be seeing far less ‘mom and pop’ campground operations.”
The end of multi-generational, family-owned campgrounds
The rise in campground prices is having one obvious effect—the next generation can’t afford to take over their parent’s park.
“I do a lot of succession planning with campground owners,” Caetano Johnson said. “The biggest issue that the parents have is that the park has basically always been their retirement plan. Now the value of their campground is so high, the children can’t afford to purchase it from the parents and the parents can’t afford to give it outright to the children.”
As an example, she said campground owners often find the park they purchased for $2 million is now worth $10 million to $15 million. “How is a 25-year-old going to purchase a $12 million park from their parents?” she said. “The family often decides to sell it to an investor and just give the kids a share as their inheritance. There just is no way to keep it in the family.”
The effect on RVers
As older “mom and pop” owner/operators leave the campground market and investors take over at many parks, RVers can expect improved facilities … and higher rates.
“Sometimes these more corporate owners put a lot of money into both the purchase and the facility itself,” said Caetano Johnson. She said investor owners also have their eye on higher rates of return.
“The more investors there are in the market, the higher the rates will go,” she said. “I’ve seen some seasonal site rates go up as much as $1,000 at one time. You don’t see mom and pops doing that, but you do see that with corporate owners.”
Caetano Johnson said investors are drawn to campgrounds with long waitlists and room to expand. “It’s really basic Economics 101,” she said. “If you have 100 people waiting to get every site, you can charge more.”
The RV Industry Association says there were 62 percent more RV owners in 2021 than in 2001. With 600,000-plus new RVs set to roll off assembly lines in 2022 and nowhere near enough new campsites yet in production, it isn’t surprising that the sale price of existing parks is climbing.
A quick look at one campground brokerage website showed even modest-sized family-owned parks listed for from $2.4 million to more than $8 million in price. Even a tiny, 15-site campground in West Texas was listed at $750,000.
“It’s still very much a sellers’ market,” said Caetano Johnson. “There just isn’t much campground inventory for sale out there.”