Editor’s Note: This analysis was written by Julian Gothard and distributed by examiner.com.
In response to the city of Los Angeles self-inflicted fiscal crisis, the L.A. Department of Beaches and Harbors recently announced that it is considering raising charges at its Dockweiler Beach RV Park. Fees at L.A. County’s only RV park located on the beach would soar from $45 for a front row spot to $65! Unfortunately, some basic market research comparisons and rudimentary business analysis does little to support such an increase.
If you want to see what $65 could get you at an “RV Resort,” check out the Wine Country RV Resort in Paso Robles and the Oasis RV Resort in Las Vegas. Now take a look at this Dockweiler Beach. In spite of the wonderful beach views, there are a few drawbacks at Dockweiler. Its proximity to LAX airport, the offshore Chevron Oil Terminal and the El Segundo Power Plant immediately behind you, flies in the face of the three most important elements in establishing a business, “location, location, location.” Add to that the complete lack of “Resort” facilities at Dockweiler and you can only conclude that these fee hikes would not only be unjustified, but there is little chance of the “market” either supporting or sustaining them. Full occupancy of the 39 front row spots would yield $2,535 per day, an increase of $780 a day. However, if the fee increases led to a 25% drop in occupancy this would yield only
$580 a day extra on the front row. If you compare that to all the front row spots remaining full at the current $45 per day, then this would be only $100 a day less than the proposed fee hike! It doesn’t take a genius with an MBA to figure out that the county might well end up losing money on this deal, especially if occupancy rates also decline on the middle and back rows.
Now, if they wanted to add a pool and spa, improve landscaping, add more date palms, a clubhouse, fitness room, game room and group BBQ areas, then this fee hike might be justifiable. Instead of applying punitive fee increases, perhaps the county would be better served looking to a public-private partnership to maximise revenue from this great RV resource? What a concept!
More On Julian: Julian was born in Singapore, has lived in Germany, England and the U.S.A. and has traveled extensively in Europe and North America, including Canada and Mexico. He is a freelance writer and photographer and an enthusiastic advocate of the RV lifestyle. Send feedback to [email protected]