Editor’s Note: WOODALLSCM.com (WCM) caught up with Kampgrounds of America Inc. (KOA) CEO Pat Hittmeier and President Toby O’Rourke during the 2018 International Convention & Expo in Fort Worth, Texas. Below is a portion of our edited conversation. Look for the full interview in the January issue of Woodall’s Campground Management.
WCM: Would it be an exaggeration to say that KOA is in a good place right now, from every business perspective?
Hittmeier: Yes, I think we are. We got a lot of momentum going, which tends to create a lot of good opportunities. It seems like every aspect of our business is helping another part of our business, so they’re all sort of connected. As this part improves and our marketing gets better, our revenue goes up and our budget for dollars we have to spend on marketing goes up. It’s ratcheting itself up all the time.
I think we have our technology on track now, which has taken a while, but it’s in a good place and I expect our technology to really support our growth in the future.
WCM: 2018 marks eight years of continued growth for KOA in both revenue and camper nights, and along with that the number of parks has grown to 515. For years it would seem like you would approach that 500 mark then there would be some attrition, do you anticipate seeing the number of parks continuing to grow in 2019?
O’Rourke: Yes. We had healthy conversion numbers this year and a few more in the works that are set to close by the end of the year. The other positive thing that we see happening is people are building campgrounds. We signed four new construction contracts this year and that is on top of nine others that already have franchise agreements. That’s 13 new KOAs that are in the process of being built. I think that’s another good indicator of the health of this market.
Hittmeier: The construction activity is quite unusual. It is the first time ever in 20 years that we have seen numbers like this for new constructions. That is a new aspect of the campground and RV park sector that has been taking place. I see more campgrounds being built today than ever before and I suppose it is because with the margins, profit and demand it makes more sense now.
WCM: We hear conversations about whether there is enough inventory out there right now, enough places for individuals to camp, especially short-term sites. The growth you guys are experiencing plays into that conversation, KOA is stepping up, right?
Hittmeier: I think so. I hear that a lot and I think it’s a pretty broad statement when you say there’s no place to camp or that we have to do something. I think it really comes down to the fact that there are no specific types of sites that people are looking for or there’s no place to camp during a specific holiday weekend.
I think, in general, there’s quite a bit of inventory in North America. It’s just that peak season period where it becomes difficult to find just the right full hook-up, pull-through, 50-amp site that’s just the right length, that kind of thing. So, when you broad brush it and say there’s no place to camp, I don’t think that’s a very accurate statement.
WCM: KOA has seen growth in its branding initiatives as you aim to have all parks branded either a Holiday, Journey or Resort in the next few years, right?
O’Rourke: We will have 400 parks branded in the 2019 directory. We started this program in 2012 and we still feel really good about it. We feel it is important for us to differentiate our parks, since we have a large system, and tell the guests what they can expect. We want to better set those expectations so that our guests are not surprised by something.
But the great outcome of this initiative has been our campground owners really investing in their parks and the quality and the level of innovation that’s been happening at the parks. It’s been a direct result of the brand positioning programs, so all campgrounds will be branded by fall of 2020 and we’re right on track to achieve that.
WCM: KOA has also seen a rise in owners managing multiple properties. Do you see that continuing to trend up in the future?
O’Rourke: Oh, absolutely. I think we have 27 owners now, across 86 campgrounds, not counting company owned properties. As we speak, we’ve got several contracts in the works with current multi-park owners adding more and new owners that are adding more. We had sessions at our convention on running multiple operations and multi-park reporting, and they were full sessions. It’s definitely of interest to our owners to keep expanding their portfolio.
It’s a good way to add more parks for us within existing territories and reach more people. There’s a lot of synergies of operating multiple businesses people are finding. So, we’ve got some sophisticated owners taking on more and more and I think that’ll continue to grow. It’s been a push of ours. We’re trying to provide more services for multi-park owners and enable more of that.