WCM Sits Down With KOA’s Pat Hittmeier

The network of parks in the Kampgrounds of America Inc. (KOA) system of franchisee-operated and company-owned parks had a huge year in 2015.

Not only were revenues up for an impressive 92% of KOA parks, the number of parks grew, edging closer to the 500 mark. In fact, at year’s end, KOA reported that there were 490 parks in the system across North America — 29 of them owned by Billings, Mon.-based KOA.

“Things are good,” KOA President Pat Hittmeier told a crowd of more than 700 owners and staff members attending the company’s 2015 Annual Convention at the Ocean Center in Daytona Beach, Fla., weeks before taking over the title of CEO.

KOA owners continue to invest in improvements in their parks and continue to see growth not only in revenue but also in site nights.

Short-term occupancy, accounting for 80% of KOA’s business, was up 10.5% over the previous year, with short-term revenue 17% ahead of 2014. In the big picture, Hittmeier added, registrations have grown 39.7% since 2011.

Add to that an array of positive external signals like gas prices and demographics — not only the Baby Boomers, but also the number of Millennials opening up to the outdoors — and it’s enough to make even realists like Hittmeier feel comfortable with the way things are heading. Indeed, Hittmeier was notably upbeat when pausing amid a record vendor expo for an enjoyable interview with Woodall’s Campground Management Editor Justin Leighty and Publisher Sherman Goldenberg during KOA’s mid-November, ocean-front show.

WCM: This year has continued an impressive rise in growth for the KOA system. What do you credit for this welcome turn of events?

Hittmeier: You know, I get asked that a lot and certainly there’s the outside influences that everybody knows about — the economy, consumer confidence, gas prices — but in reality our continued month-over-month growth really comes from a few areas.

One, our campgrounds have delivered better camper experiences and have been for many years.

In addition to that we have some marketing programs that really have traction. Our chief marketer Toby O’Rourke (director of franchise operations) has built some digital, social and TV coverage for our brand that is delivering a lot of great impressions.

The third thing, although it’s just getting started, is that our brand positioning is building a real image of the KOA brand that is new, different, modern. We’re attracting a new KOA guest that is building the brand along with it.

Everything’s firing on all cylinders and the rest of the business just continues to escalate because of it, so it couldn’t be better.

WCM: Any specific concerns at this point, any storm clouds that you’re eyeing on the horizon?

Hittmeier: Well only because I always worry about the other shoe falling: How high is up? But right now no, I think momentum is building.

I think that the concept of getting outdoors to not just a KOA, but all campgrounds, is a very positive image right now and we continue to drive market there.

WCM: In the aftermath of the global downturn, North America sure seems to be buying into this outdoor experience, don’t they?

Hittmeier: Oh yeah, it’s true. It came back strong after that and stronger than a lot of businesses. I don’t think it suffered quite as bad, but it certainly took a downturn. It’s come back extremely strong. We definitely benefit from the old profile guest, the Baby Boomer, and I think that retirement was delayed a bit during the recession and so there’s been some pent-up desire to retire that we’re seeing. So that’s culminating and bringing more business for us, but it’s much bigger than that and it will continue unless something offsets it that we can’t foresee at this point.

WCM: With the over-65 guests, more of them every day, is that likely to change the KOA system? You report that 80% of your business right now is short term, is that number likely to go down somewhat as more and more retirees hit the road?

Hittmeier: No, I don’t think so. Just because they’re over 65 doesn’t mean they’re in one place to camp. These individuals are extremely mobile. They want to travel, they want to see the country, they want to go to different places. And they have time. That’s the big thing that other people don’t, and so it fills in the gaps.

September and October were huge months for us in 2015. And I think that we’ll see in addition to the snowbird traffic — where you get that extended stay — people coming for two weeks, three weeks at a time and visiting the southern-tier states. That’s going to be extremely strong this winter.

So no, I don’t see us changing. That vacation, leisure market is very big right now.

WCM: Did we hear you correctly that 92% of KOA parks are up this year?

Hittmeier: Yeah. In my 34 years of being here it was always 40/60 — it’s either 40% down and 60% up or, in a bad year, the other way around, 60% down and 40% up. We’d never gotten to be outside that parameter and now it’s 90-plus, and so it’s quite different.

WCM: Beyond the RV market, how significant of an element are tent campers in your system?

Hittmeier: Tent camping is a huge factor and it’s entry level. It’s a difficult market for us, it always has been. We don’t offer always the best kind of tenting facilities. So we require an upgraded tent site at the campgrounds that are making an effort to join in our brand positioning, and those are playing extremely well.

The percentage of tenters growth this year was higher than our camping cabins, which is our non-bathroom units. That’s unusual for us. We’re seeing a strong influx of tenting.

We’re mostly known for RVing and so tenters are a hard market because they require a lot of services. They require bathroom buildings that are very close by and they don’t bring anything so they’re very needy, but they’re a great market for us.

That’s the natural starting point for individuals and certainly families and it’s sort of the heart of camping. When you think about it there’s a lot more tenters than there are RVers out there and that’s continued to grow. I really don’t know what the statistics are for tent sales. Nobody’s been quoting that around, but I suspect that it’s quite high.

WCM: What do your upgraded tent sites look like?

Hittmeier: Well there’s no magic to a tent site, we’re talking about the basics here. You’ve got to have a flat surface that’s smooth. It has to have power, lighting and certainly a fire experience and a picnic table and a parking area.

But I think the key is it’s designated for campers. It’s not just an afterthought, it’s not putting them out to just find a space out there. I think that when you focus on a particular market it tends to respond.

WCM: KOA focuses on guest feedback. What does that do for campgrounds?

Hittmeier: I think we came close to 250,000 responses from our guests this year, and I think that the most important aspect is that we get feedback immediately — the next day. It’s enough feedback that you get a real perspective of your experience that you’ve provided for your guest and you can make changes on the fly.

We’ve been doing this for long enough that I believe that our owners have come to terms with it because it’s tough to take something that you work hard at in your business and then you have someone criticize it or provide constructive criticism.

I think that they’re using it productively to guide their improvements in their parks. It’s a real advantage. So often people make decisions based on a very vocal minority of their guests, those people who overpower the majority. We get such a broad cross-section of reviews and responses from our guests that we make it easy for owners, they get a real perspective of how their total guest profile is viewing their experiences at the campground.

It goes a lot further than just face-to-face guests. It’s impressions that you make with your facility and your signage, the reservation process, and it’s that whole connection that you have. We’ve been focused on guest service effectively for 15 years now. It is a competitive advantage for us.

WCM: Another thing you talked about is changing importance of technology for campers, for operations, for marketing, kind of the whole broad spectrum. How well is KOA positioned in terms of dealing with that spectrum of technological change?

Hittmeier: I think we’re doing okay. I would give us a B on it. It’s tough to keep up. It’s tough to manage the dynamics and then stay current and stay ahead. I mean we don’t want to be bleeding edge but we certainly want to be up front.

As a software developer — that’s something that we didn’t intend to do many years ago, but we are — it’s not for the faint of heart. It’s expensive, it takes a long time, it’s tedious, it takes very talented people.

Then you go onto the technology side, the customer facing stuff, and that’s where I think I’d give us an A+. We’re doing as good as we can, I believe, with trying to make an impact with the KOA guests both in content marketing and interface with them on social media, PR, and we’re using the technology that’s available to us to get that word out.

So it’s a real advantage for a franchise company today with a limited amount of money to be able to express their brand and their experiences to a much bigger market and more personal as well.

WCM: Does KOA have plans interface with any of the online travel agencies (OTAs)? 

Hittmeier: You know, that’s a challenge that’s coming. The OTAs are a force to be reckoned with and when they finally want to turn their minds to RVing, we’ll have to consider that. Right now the OTAs provide a terrible experience for RVers. I see no reason in the world to want to get on board with them and bring them customers because the guest, the RVer, has no reason to go there when they’re looking for a campground.

If you’ve ever tried to search an OTA for a campsite, you know it’s terribly cumbersome. But I think it’s coming. We certainly have a few campgrounds that are trying to market their cabins occasionally on the OTAs, but I see a time in the near future where we’ll write the software connection to them and allow for easy access to the OTAs. It’ll probably happen in 2016 or 2017 and by that time the OTAs might decide that camping is worth trying to go after. We’re just a drop in the bucket to them; the hotel industry is so much bigger that they’re just getting around to us at this point.

WCM: As far as your brand positioning initiative, it looks like you’re at about 40% adoption with about 200 facilities listing themselves as KOA Journey, KOA Holiday or KOA Resort parks. Are you pleased with that pace?

Hittmeier: I’d like to have it more so. I think that it’s proving to be a better and better strategy, better than I had hoped. We recently did consumer research and the results were quite striking in all segments. We did segments of non-KOA campers, first-time KOA campers and then more loyal KOA campers. In every segment the brand positioning is resonating with them in a positive way.

I think it promotes this image of a fresher, newer brand: More modern, more in line with what they’re looking for and so it’s moving us that direction.

It makes our campgrounds take a look at themselves in a little different light and it helps them. There’s so many things you can focus on in running a campground, so being able to zero in a little bit on a target market helps you decide what changes to make to serve that market better. I’d like to see it going a lot faster but it’s doing well.

WCM: At the convention you talked about owners telling you about the improvements they’re making and plans they have for their campgrounds. How much of that is driven by the brand positioning?

Hittmeier: I think a lot of it. It’s sort of a roadmap that gives them to help them decide what to do. These elements that they’re working on are proven very effective.

It has to do with the outdoor experience at a campsite, whether it be a tent, RV or a cabin. It’s the availability to provide the kinds of services that a modern RV park should provide and a lot of our RV parks in the country were built a long time ago and they’re not keeping pace with the RV manufacturing side of the business. It’s important for us to provide updated services and facilities. When you do, the customer responds extremely well.