It has been a year of growth for Leisure Systems Inc. (LSI) the franchisor of more than 75 Yogi Bear’s Jellystone Park Camp-Resorts in North America.
The growing chain of parks has recently been recognized as a “Top Global” franchise by Entrepreneur, as well as being listed as a “Top Franchise” by Entrepreneur and Franchise Business Review. It has also been named a Top Franchise for Women, a Top Recession-Proof Business and Jellystone Parks made Franchise Business Review’s “Culture 100” list.
Besides all of the accolades, LSI has also found success as it makes a westward push — intent on expanding its reach and introducing more campers to the Jellystone brand.
LSI recently signed a franchise agreement with High Mesa Partners LLC to open a new Jellystone Park in Parachute, Colo. Along with that announcement, LSI also noted that a new Jellystone Park an hour west of Knoxville, Tenn., is set to open in 2022. The development is being completed by The Jenkins Organization, which currently owns four Jellystone Parks.
There are also commitments to build Jellystone Parks in Las Vegas, Nev. and Hurricane, Utah, along with conversions of independent parks in Cape Cod, Mass., northern Pennsylvania and near St. Louis, Mo.
“In the past, we met with investors that were kicking the tires, now they are banging down our doors,” noted Jim Westover, LSI’s vice president of product development and sales. “It’s really created competition out there to buy up the good performing, large parks that have expansion capability. We have a lot of new builds also coming into the system and we’ve had a lot of folks come in from the hotel industry specifically trying to diversify their portfolio.
“These aren’t one and done developers either,” he highlighted. “These are developers that want to build or own multiple parks. When I take a call, even with people within the industry, it’s always 150 sites or more with all the trimmings, including swimming pools, water features and cabins. I think a lot of folks have done their homework on it, and that’s really boosted the industry wherewithal.”
Where is this desire to own a Jellystone Park coming from?
Trent Hershenson, vice president of marketing for LSI, just has to point at the financial growth LSI has seen to answer that question.
“2020 finished as our best year ever, which was the 14th year in a row that we have broken our all-time revenue record,” he pointed out. “We were up basically 10% over 2019, and then, this year has been crazy. It’s just smashing even last year’s records and it’s like nothing we’ve ever seen. Right now, we haven’t gotten all parks reporting for July, but based on those that have, which is more than two-thirds, we’re up year over year through the end of July essentially 50%. To have 50% above your best year ever is crazy. It’s been just amazing how well the parks are doing.”
That has created a tremendous amount of desire from developers, according to Westover, and the threat of wildfires out west doesn’t even appear to be slowing down interest.
“I’ve actually sat on a plane with some smokejumpers (specialized firefighters) on the way out to Oregon one time,” he said. “For those folks out there, it’s status quo. Sometimes it does slow the process a bit, but they feel they can overcome it. As long as there’s a market for it, there’s the ability to do it. I think Northern California and some other areas that may not be as impacted are still really good possibilities to develop.”
Westover noted that a Jellystone Park is typically more expensive to develop than a traditional park just because of the water features and other amenities that Jellystone Parks are known for. LSI has also found that its campers typically love cabin rentals and RVs more than tent sites, since the median household income for a Jellystone Park camper is $100,000, according to Hershenson.
“You spend more because you are finding ways to cater to that type of audience,” said Westover.
When asked if construction costs and the scarcity of supplies are hurting the development of new resorts, Westover said that developers are coming prepared for those scenarios.
“They’re already going into it anticipating that they’re going to build a park that’s $10 to $25 million,” he explained. “A few million here or there is not going to sway them just because of the way the business model is set. When you’re talking about 40% earnings before interest, taxes, depreciation and amortization (EBITDA) and these guys are hearing those numbers, they can afford to get squeezed on a couple of percentage points. For them, the timeline of getting up and running in this market and getting a foothold is more important than the inflated costs.”
Perhaps no part of the park development journey is more frustrating than the permitting process and there have been plenty of stories that highlight the issues developers face when working with local officials to get a project approved.
“I’ve attended some community meetings, and that has been a hamper for folks that are not familiar with this industry,” Westover said. “They still have that impression that it’s going to be an old-style campground, and we are going to lower the demographics and put up cheap housing, which is the exact opposite of what our brand is.
“It is a concern because the more you can expand these campgrounds, the better the numbers work out for the seller and the buyer,” he added. “That hindrance really stops tourism and the growth of the industry.”
Westover said that LSI helps developers push through that to some degree and helps local officials understand that the camping consumers don’t just spend money at the park.
“We have research that shows a camper will spend on average $75 outside of the park per day,” he noted. “That’s going to somebody else’s gas station and restaurant, it goes to help the town around it and that has happened at numerous parks.
“We’ve had scenarios where one guy literally had a fishing business and he thought that would deteriorate and detract from his business. We’re going, ‘If anything, it’s going to enhance your business because these are nature-type folks,’” Westover added. “But, some folks cannot see past their own vision to be open-minded enough to take a look at what the industry has done and the facts behind it. We are talking about a billion-dollar industry and they’re shutting that growth pipeline off in some respects.”
Jellystone Parks, like almost every campground, has struggled on the employment side, with many franchisees working through the busiest season they have ever had with fewer staff members.
“That definitely created some frustration, but I think it is getting cleaned up now,” said Westover. “It’s been a slower than normal process, and a lot of those folks do the cleaning of the cabins and things like that. So, that’s kind of stunted growth in that area because who wants to put in more cabins if there is nobody there to clean them.”
Cabins have become a large part of Jellystone Park’s growth, with Hershenson highlighting that Jellystone campers love cabins and owners typically have no issue selling them out.
“There are a substantial number of our franchisees that have between 50-100 cabins, and they are planning to add even more,” he explained. “There is more of an investment to build those cabins, but the revenue generated makes up for it on the back end.”
The new Jellystone! TV series on HBO Max is also set to drive even more interest to Jellystone Parks.
“We feel that it will raise awareness of Yogi and some of the other characters and we are thrilled about the new TV series,” Hershenson highlighted.
Looking forward, there are no signs that the growth trend for Jellystone Park is going to slow down.
“We are getting calls every day inquiring about franchise opportunities and our parks are busy,” noted Westover.