Will RV parks nix fixed prices and charge based on demand?

44

By Andy Zipser

Andy and his family are the owners and operators of the Walnut Hills Campground and RV Park in Staunton, Virginia.

One of the hardest questions we get, as campground owners, is the deceptively simple query, “What’s it cost to camp at your park?”

You’d think the response would be pretty straightforward. You ask a grocer how much a pound of chopped beef costs and you get an uncomplicated answer. A lot of products have prices stamped right on them, movie theaters list ticket prices over the register and a magazine subscription costs a precise amount, even after all the alleged discounting that shows how much you’ve “saved” over the newsstand price. Unlike bazaar economies, in which prices are fluid and haggling is a consumer sport, for the most part we’re used to having fixed prices for fixed goods.

Yet more than most other commodities, campground sites are not all equal — at least not in an RV park like ours, which is hardly a cookie-cutter operation. Our rate sheet has 20 different horizontal RV categories, divided by six vertical time columns — and that’s a simplification from the 15 columns we inherited six years ago when we bought the park.

Do you want just water and electric, or do you need full hook-up? 30 amp okay, or do you need 50? Pull-through or back-in? Are you reserving during our “summer” season (which now runs into mid-November, but that’s another story) or winter, and will you be staying on a weekday or a weekend night? And on and on.

Experienced campers know all this, but it’s not unusual for new owners — or RVers more used to newer parks, in which every site is pretty much like every other — to heave a sigh of frustration when we answer their question with, “Well, it depends.” I’ve learned to blunt the vagueness by replying, “Our prices range between $34 and $68, depending on what you want,” but even that can be off-putting for those who want a definitive answer.

SO HERE’S THE BAD NEWS: What I’ve just described is going to get worse. Attend any get-together of RV park owners, like the recent national conventions held by ARVC and KOA or one of the numerous state association meetings, and you’re bound to hear the phrase “demand-pricing” (or “dynamic pricing”). All the computerized reservations systems that now pervade the industry have algorithms that make it possible, numerous workshops explain why it’s time for campgrounds to get rid of their fixed-price sheets, and demand-pricing advocates hammer at the fact that those of us running campgrounds are 20 years behind the times. Get with it!

Indeed, demand-pricing is far more prevalent than many people may realize. Consider airlines and hotels, whose customers have come to accept that prices will vary according to supply and demand. Plan far ahead and you’ll get one price. Wait too long, and the price will be higher because supply is more limited. Make a last-minute decision and possibly score a great deal, as the seller tries to move excess inventory — or find there’s nothing to be had, at any price. On the plus side, the upshot is more bookings and more cash flow to the seller. The flip side? That guy in the aisle seat next to you may have paid a fraction of what you coughed up for the exact same service.

But demand-pricing is also evident in ticket scalping, at one extreme, and in the way Amazon undercuts competitors at the other. Scalping is generally regarded as predatory, even though no one is forced to buy a ticket at exorbitant prices. Amazon, meanwhile, which adjusts its prices non-stop, has created the perception that it has the lowest prices on the web. The reality, according to an analysis by Boomerang Commerce, a dynamic pricing company, is that Amazon’s “consistently low prices on the highest viewed and best-selling items drive a perception among consumers that Amazon has the best prices overall.” Which, we should note, it does not — so is it any less predatory than the scalpers?

Is that “fair”? Is it good customer relations? Does it matter?

Walnut Hills Campground and RV Park

The reality is that demand-pricing, assisted by the wizardry of computerized algorithms, simply is a more sophisticated approach to finding the highest price that consumers are willing to pay. We already do that on a more primitive level with our complicated pricing grid, increasing our rates a couple of bucks on the weekends, and a couple more on holidays — and even then we’ll sell out on Labor Day or the Fourth of July, raising the question of whether we should have increased them even more.

Dynamic pricing can be viewed as simply a smarter approach to what we — and most of the campground industry — are already doing. And yet. . . .

And yet, there has been a lot of resistance among most campground owners against embracing this kind of pricing scheme. It does not, in fact, seem “fair.” Holding up the airline industry as an exemplar of how it works is hardly convincing to many of us, given the dread with which most people contemplate the hassles of flying. Unlike airlines or hotels, most campgrounds have had a more personal relationship with their customers and frequently enjoy repeat business because of it. Dynamic pricing may be okay for high-volume travel or hospitality industries, but RV camping historically has been more rooted in value-based pricing, in which the price campers pay should make them feel they’re getting a lot for their money.

That may sound like good news from an RVer’s perspective, but the reality also is that this resistance is fading. It’s hard to ignore the lure of higher revenues that demand-pricing promises to generate. The ongoing flood of new RVs — a recent slowdown notwithstanding— means increasing demand for a supply of campground sites that is growing only slowly, if at all. The greater spread of demand pricing throughout the economy, helped along by the same forces that gave rise to Uber and teleworking, means growing (if grudging) acceptance by the consuming public.

So here’s my prediction: Demand pricing is coming. Maybe not right away and not everywhere, but soon and ever more widely. And that means asking “What’s it cost to camp at your park?” will become as meaningless as asking “What’s it cost to book a seat on one of your airplanes?”

Subscribe
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

44 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments

Paul Terry
1 year ago

Considering the size of some of the newer RVs along with what they often tow, it should be no surprise if parks start charging on length of rigs. Larger rigs mean fewer units over which to spread cost.

BO
1 year ago

There is a campground in our area who prices by the length of your camper! Not sure what model that is, but I assume they figure the larger the rig, the more utilities are consumed?

Rory
1 year ago

Many parks have been doing something similar for years. For example in Fl., If you go in season (Dec thru Mar) there is is one set of prices to pay. If you go during the summer the prices are less. The idea explained in the article is a far more radical extension of that. But since it is dependent on supply and demand, RV’ers themselves can simply cut the demand, by boondocking, taking advantage of clubs I.E. Boondockers Welcome & Harvest Hosts and the like.

Steven C
1 year ago

All kinds of “good” comments – some pro- some con, but the bottom line is we are consumers and we have control with our dollars. But with the explosion of new RV’ers in the last few years, there are not enough sites for the number of campers and weekend warriors fill up the cg’s. But I don’t begrudge CG owners from bumping prices, but they need to update the properties also. So make your feelings known. We will pay a fair price for decent sites.

Now as far as demand pricing, I think it will bite owners sooner or later. There is no way the current glut of new campers can continue every year. The next Gen’ers are not campers like the current baby-boomer gen. Things will change, but as long as we are willing to pay to play, we will have to deal with the process. The ship will right itself someday.

Herbert Lillibridge
1 year ago

This is the stupidest idea yet. We experienced this this past summer at Sun RV Resorts, Seaport RV Resort, Mystic, CT. We have been going there 2-3 times a summer and after we experienced this we only went the once last summer. We will not be going back until this stupid idea goes away. We spoke to many others there and our friends that go there and Sun will be losing many long time customers.

Steve
1 year ago

If they gain other customers who ARE willing to pay the higher prices, demand pricing has done its job……

Russ
1 year ago

Good discussions. Campground owners just have to realize that a lot of us rate/review your parks. Those reviews are what I use when planning an extended trip. If you call your park a resort and you’re not or your prices are high when not necessary, I will look elsewhere.

Jon Katin
1 year ago

KOA has been following this “model” for a long time. It is the primary reason I avoid their campgrounds. Many of us have determined that KOA stands for “Keep On Adding”. It is frustrating to have a base price and then kids, pets, 50 Amp, length, etc are additional charges. Their next step can easily be also pay to use the pool, restrooms, WiFi, cable, your “toad”, etc. Fortunately many campgrounds have a set price, that allows us to decide if we want to pay $35 or gamble that when we pull in, tired and need a overnight stop, that $35 became $55.

Lee Ann Stephenson
1 year ago

Well, this was an interesting article, as a small seasonal campground owner, this is an issue we struggle with…mostly because we are full most every night in the summer and we’ve wondered whether it’s because our prices are too low. I can tell you, though, when we are traveling in our 5th wheel as campground customers, we HATE being charged a huge increase for holidays or events for the same spot. It’s one of our biggest turn offs and we would not frequent that park again on a ‘lower rate’ time just ’cause the charged us a much higher price for the same site during an ‘event weekend’. Call us old fashion, but we have vowed not to do it in our park. The folks who stay with us on the big weekends and don’t pay a ‘demand price’, appreciate it and are much more apt to return. Happy returning guests are better advertising than I could ever buy.
I will say, however, as a park owner, delivery of all the increasing demand of services is much more difficult on a seasonal basis and in an extremely rural setting. There is no cable company, so TV and WiFi become expensive utilities. The cost of trash disposal is very high in rural communities. Our costs keep rising each year, and it’s harder and harder to keep prices affordable. Being an owner is not a great way to make a living, but the lifestyle is the largest benefit.

Steve
1 year ago

If you are full every night in the summer, it means your prices ARE too low. Most of us who are still working would like to earn as much as possible at our jobs–I don’t know of a lot of people who are willing to turn down a raise. The same applies for you.

If you raise your base pricing, you can always run specials. One thing that is EXTREMELY useful in the RV industry is to offer a returning guest discount–and perhaps even a referral discount if your returning guests bring friends. Builds loyalty and increases your customer base.

If your base pricing is high enough, that enables you to do things like offer specials. It also means that if you have a lot of sites still available on any given night, you can empower your front desk people to offer last minute discounts.

If it looks like you have priced yourself too high, you can always offer a discount. If you price yourself too low, you are losing money–and that is money that can go to help pay for the improvements you would like to make.

BO
1 year ago
Reply to  Steve

Lee Ann, I would love to come and visit your campground! Sounds like you are the kind of owners with whom we love to do business. These tactics mentioned still don’t overcome the “fairness” issue. Why should someone who made their plans at the last minute get a site cheaper than the one who committed to the campground to be there when they said they would? Walmart does fine with their low price mentality because they create a loyal customer base. Variable pricing for anything other than additional amenities (get what you pay for) creates competition among campers and is not the type of environment I choose for my relaxing holiday.

BuzzElectric
1 year ago

To long of an article. All I know is the more you stiefel me the less chance I coming to your parking lot. The more I get for my money the better chance I’ll head your way as there are roads that lead to others.

Kevin
1 year ago

I’m fine with demand pricing as long the campground discloses what I will get and start making noticeable improvements in the campground. Reduction of the tight turns. Smooth roads. Level (I mean truly level) sites. A picnic table that looks clean and in good repair. A fire pit that has been cleaned and is far enough away from my rig that I won’t smoke out the rig (usually). Clearly defined sites. If not full hook-ups then a dump station that has the right (passenger side) of the pad elevated slightly to assist in draining. Things like stable 50 amp power. Reasonable water pressure, testing of the water if not a municipal system (and posting the results). Bath and shower facilities that are up to date and clean. Trash receptacles that are clearly marked and have been cleaned (not dumped) to reduce some of the odors. A realistic recycling program. Some knowledge of local sites and recommendations. If satellite should be available how about a designated spot (I’m sure Dish and Direct TV local reps would help with the sighting. Yes I know it is a long list of demands, but if you are going to flex the price, I will raise my voice.

Bill
1 year ago
Reply to  Kevin

You hit the nail on the head Kevin. If they raise the price at will, they need to raise the bar of the quality of their service. We are about due for some disruptive models in the RV park world. Reinvigorate Escapees park development or 10 buck Chuck’s with pay as you go a la carte offerings. The right model will float to the top. We are the consumers and have the power to drive the change.

Charlotte Lloyd
1 year ago

When Best Western bought the RV park in Prosser, they started pricing it just like their hotel across the street. Price was based on day of the week, what was going on at the time, the size of your RV, what site you wanted, etc. I worked two summers there and when I go by except for big weekend events in the town, the park is not as full as when it was a set price.

Steve
1 year ago

But…..is their REVENUE the same or higher? There can be some advantages to running at a slightly lower occupancy at higher rates. Less wear and tear on the infrastructure, room to move people if there is an issue with one of the sites, etc.

If their revenue is the same or higher, it doesn’t matter if they have empty sites–except that it opens up the possibility of running things like last minute specials to fill those sites.

Mickey
1 year ago

When we are on the road, traveling between our destination RV parks, I long for the Editor’s idea of a bare-bones chain that offers a safe place to stop for the night and maybe electricity for an extra fee if we need to run a/c. Perhaps demand pricing will have room for no- or low-demand users.

Lynn Decker
1 year ago
Reply to  Mickey

If there were bear bones parks or sites with just electricity and where I don’t have to unhook, for $10 a night, I am betting people would opt for that and not WalMart……..

Bob Godfrey
1 year ago

One more reason that after 9 years of full-time RVing and visiting 49 states and 9 Canadian provinces we will probably “retire” from RVing and buy a house again. Too many seedy, noisy, crowded, run down, mismanaged, overpriced campgrounds. It has been a great ride and this country has tremendous things to see but simply trying to find a place to stay for the night sometimes is just one huge pain in the butt and it is getting tiresome. So, go ahead and apply your “dynamic” pricing and we’ll see ya……..not!

BO
1 year ago
Reply to  Bob Godfrey

We were headed in that direction as well (we only travel half the year). Then we began volunteering, and have enjoyed every minute of it! There are organizations who help build homes, help with disaster recovery, not to mention the hundreds of state and national parks who could not survive without volunteers. Free site, new friends, productive contribution, and time for sightseeing. Can’t beat it!

Betty Dagle
1 year ago

Great article. It all makes sense. But I have experienced the other end. When a campground is empty or nearly in midsummer, high rate season, I’m not offered a discount to a cheaper rate. I’m not offered and extra night or some bonus to come back. All of these are techniques used by businesses. I have never seen a “sale” at a campground. And there are empty campgrounds out ther in spite of what the word on the street is. They are not large, chain, well known parks. They tend to be small, hidden, quiet. I still camp there, but I remember the treatment and look around at other places to go.

theresa
1 year ago
Reply to  Betty Dagle

and from the Rv operator’s standpoint – you look online at what’s is represented as a great place for a great price only to show up at way less than you thought and have already forked out for the space.. we’ve seen that quite a bit

Bob Zagami
1 year ago

Excellent article. I don’t understand why there is any resistance to such a pricing model, especially after many other industries have proven the success of pricing a product or service based on demand. If we accept this from hotels, airlines, rental care companies . . . then why is a campground owner looked upon as a predatory business entity if they employ this financial model? I find it interesting that people who have never owned any business, and a campground in particular, feel that they have the right to tell that business/campground how and what they should be charging for that product or service. If we want to have nice campgrounds and RV resorts to enjoy this lifestyle, then we should not criticize those who are providing that service to all the RVers on the road today, and the millions who will follow them.

Lynn Decker
1 year ago
Reply to  Bob Zagami

Of course we have a right to tell campgrounds owners what they should be charging…..It is with our feet, or more to the point, our wheels. If I choose to stay in a resort with multiple amenities, then I would expect to pay more. But if I am staying at a ma and pa campground with no pool, bad roads, unfriendly staff, I should not be paying the same price just cause there is a fair in town.

Bob Godfrey
1 year ago
Reply to  Bob Zagami

You “accept” this pricing from hotels, airlines, rental car companies but do you like it? Most folks I know have come to hate air travel because of this very topic.

Bill
1 year ago

What does it REALLY cost to run each individual site in campground? Pricing can be pretty straight forward. Campground owners need to honestly evaluate the cost of operating each site in their campground. Price it reasonable enough to make a profit and maintain each site. Dynamic pricing is not really required and only serves to add work for the administration of the campground. As an example, if it actually costs $15.00/day to operate that individual site, add a reasonable mark up, say, 25% and charge that price, for that site, regardless if it a holiday weekend or not. A clean, well spaced and well maintained campground, will always stay 90% full for the entire season. If I call for a site, tell me what you have available and the price for that site. Simple. As an additional question, why is a full hook up pull through, more expensive than a full hook up back in? The extra bit of gravel?

Drew
1 year ago
Reply to  Bill

Bill, Thanks for this—I think your response makes the most sense from many aspects. -Drew

Jeffrey Torsrud
1 year ago
Reply to  Bill

Very good points! Unfortunately, too many RV Park Owners want to MAKE as much money as possible for a given season, and that all goes into their pockets, instead of reinvesting some of the money back into the park. ie. Keeping up Electric Pedestals, Water Hookups and the like.

I’ve been in many parks that look good from GOOGLE EARTH, but when you get there, it is a real RUN Down DUMP! We have many DUMP RV Parks in the US.

So, going with an ON DEMAND pricing system, is NOT a good idea!

Steve
1 year ago
Reply to  Bill

I don’t know if you are still working or retired, but I assume at some point in your life you had a job. When you were working, did you figure out your expenses, come up with a “reasonable” markup, and volunteer to work only for that amount, regardless of the value you brought to the company? If you sold your house, would you take what you paid for it, add the inflation over the years you owned it and any improvements you made to it, and simply sell it for that amount, regardless of what the market prices in your area are? Why is a camp site any different?

A camp site (like a hotel room, an airline seat, and even a gallon of milk) is a perishable commodity. If that site goes empty tonight, you can never get that night back. That means the goal of what is called “demand pricing” here (most companies in the hospitality industry call it “yield management”) is to fill the maximum number of sites at the highest price possible. That helps to pay for the sites that go unoccupied during slower times, and are therefore lost forever.

And…..how can anyone here decry the poor state of many campgrounds in the US, and in the same breath complain about a way for that campground owner to maximize revenue so that he/she CAN make improvements? Where does the money for improvements come from? Once that 3-4 month season is over, the campground owner must still pay all the fixed costs for the campground, regardless of the fact that they have no income (or at least minimal income) to pay those costs. And….those folks need to make a living year-round, even if their peak season is only a few months long.

The only way we will see more campgrounds being built is to make it profitable to OWN a campground. Do you think they operate these campgrounds simply to provide a nice place for you to stay? Once the return on investment makes sense, we will see more being built. Once we see new campgrounds with nice amenities, the older, run-down ones will have to actually compete to stay in business, which means they will need to make improvements. This benefits us all.

Cary Nickel
1 year ago

I can fully understand charging different prices for different levels of service. After all, a tent camper is going to use less services than the diesel pusher that requires a 50 amp service to run two ACs, “fireplaces”, ceiling fans, and a full entertainment center. But the idea of “demand pricing” where rates jump sky-high merely because of an event, or season, has always turned me off at hotels/motels, and does the same for me concerning RV parks. We recently experienced that looking for a space in Reno for “Hot August Nights”, and see rates at one popular RV park jump from $52 to $94 per night just for the week-long event. That’s a “no go” for us on principle alone, but that doesn’t mean we aren’t going to “Hot August Nights”. Thankfully, my wife and I bought our travel trailer with the idea of “boondocking” first and foremost in our minds. A “getaway” for us means truly getting away from cities, crowds, and congestion, and oftentimes RV parks are just “little cities”. Though sometimes it’s nice to be able to just pull into a space and “plug in”, living in the wide-open west offers plenty of opportunities for finding places out there in the backcountry that cost little to nothing, and we are happy to take advantage of them.

Steve
1 year ago
Reply to  Cary Nickel

Then….demand pricing has accomplished its purpose. By having you choose to stay elsewhere, it freed up a site for someone else who WAS willing to pay that premium to have hookups for the festival.

Ed & Robin D.
1 year ago

We have camped at many Campgrounds and have paid varying rates based on: where it was located, amenities offered, time of year (season), Pull Through, Back in Site, Water, Electric, Sewer, directly on the water, WiFi, etc.! The bottom line is, if it is worth the “price of admission” to YOU, everything else is secondary. Normally, the only time we would not stay at a Campground was if we were not happy with the amenities offered, for the asking price. Or if they were packed in like Sardines. We are not the Boondocking types, so that style of camping does not appeal to us.

fred ford
1 year ago

i understand the park owners point of view. with 35 years of rv’ing under my belt maybe it is time for me to move over and let new people have my “space”. it has been a great ride. the first time i heard of this type of pricing was last year at a south carolina state park. of course we were doing business with them when they could not rent sites so i felt a little discouraged. supply and demand is real. best thing is there is a lot of land out west to be explored for the one’s who want to. time to learn to boondock. we have had good times and no problems on BLM land. i never did want to use the campgrounds hot tubs, shuffleboard, pools etc. anyway. best of luck to all. this is a amazing country. get out there and see it.

Wolfe
1 year ago

People who expect flat rates are pretty absurd — it should be obvious that a tent site is not going to cost the owners the same to operate as a 50 amp full-hookup monster-site. As a renter of cheaper-end sites, I wouldn’t want to be charged for their site, either.

Your giving a range is PERFECTLY appropriate. What seems most fair is a system of line items that generate the final sum. Say, “20 for the site, 10 for power, 5 for water, 5 for sewer, so your request, if available, rents for $40.” You can throw in a “Holiday” or “Weekend Surcharge” as a line item. As long as “the rules are the rules,” no one should complain. If they do, you can give them the “Site downwind of the dump” discount. 🙂

Tommy Molnar
1 year ago
Reply to  Wolfe

” If they do, you can give them the “Site downwind of the dump” discount. ?”

I love that, Wolfe.

Frank
6 months ago
Reply to  Wolfe

You are right on, we should have choices if we don’t want that 50 amp or on fixed income we can chose to park on gravel, back in, no hook ups camp on weekdays. How can the low income afford that huge price if we all pay the same. It cost more for the super bowl than the playoffs, playoffs more than regular game, preseason games less and so on and on. At least the low income can have choices. Don’t know why people can’t see that.