RV Park Business Model

RV parks are able to generate both short term fees from nightly stays while concurrently generating highly predictable revenues from long-term rentals and storage of recreational vehicles. The RV park business model allows for multiple forms of revenue and income, which makes these businesses highly economically secure. Additionally, once the most important aspects of a RV Park are that their expenses are typically low. The primary expenses faced by most RV parks are related to the mortgage, property taxes, and utility expenditures. In most instances, the fees that are generated from long-term storage or parking of recreational vehicles is enough to cover most fixed operating costs.

One of the common trends within the RV park industry is to integrate additional onsite services such as laundry and showers. Many parks have developed structures that operate in a coin-operated laundry mat capacity (which includes sales of detergent and soaps).

Another common component of the RV park business model is to have an onsite general store that carries in-demand products among people that are traveling. These ancillary revenue streams can often become major profit centers for a RV park or campground site. One of the other ways that owners can generate additional revenues is through the rental of recreational equipment (including ATVs, boats, and fishing equipment). Collectively, these smaller revenue streams can create substantial profits for these businesses.

In a previous iteration, we developed an RV park business plan that featured an onsite restaurant as well as a liquor store. Given the large scale nature of RV Park properties, these campuses can often accommodate additional business units. In this business model, the restaurant/bar and liquor store showcased revenues substantially higher than that of nightly RV space rentals and long term RV storage.

One of the best aspects of operating these businesses is that they have tremendous access to capital. The large tangible asset base (land, FF&E, and onsite structures) makes RV parks and campsite grounds a low risk investment by a financial institution (or private investor). Loans that are provided to RV park operators are highly secure and safe investments for banks. When approaching a financial institution, it is imperative to have a well developed RV Park business plan (as showcased on this website). When showcasing your RV Park business model, it is extremely important to showcase all revenue centers (which will contribute to the economic stability of the business). Generally speaking, a RV Park owner-operator typically generates 15% to 30% as a return on investment. This ROI can be greatly amplified through the additional of additional revenue centers.

The demand for RV park spaces has increased substantially over the past ten months as a result of the COVID-19 pandemic. As discussed throughout this platform, people still want to take vacations and they are seeking safe ways to do so. Traveling by RV is incredibly safe given that proper social distancing can be accomplished. It is important to note that even once the pandemic wanes, the demand for this type of travel is expected to remain incredibly strong. This is due to the fact that many people have purchased recreational vehicles during this time, and they will continue to want to use them. From 2019 to 2020, recreational vehicle sales were up almost 10%. The low cost of fuel (as a result of economic pullback) has also been a driving force behind new RV sales. Owner-operators of RV parks and campgrounds are poised for substantial revenue growth over the next five years.

As it relates to marketing, many RV park operators focus heavily on creating a repeat customer base. Many vacationers will often take similar routes on a yearly basis (especially if they are traveling by RV in order to visit family members). As such, one of the most important focuses of the overall business model should be to have a very strong marketing campaign in place in order to develop ongoing customers. There are numerous pieces of customer relationship management software that are available specific for campground/RV businesses. These software systems can integrate automated emails to customers. Many businesses will often provide ongoing discounts among guests that use the facilities on an ongoing basis.

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