InSites - Featured

July 27, 2020

Penny Wise and Pound Foolish

Written by - Don Westphal, Landscape Architect & Land Planner, and Jayne Cohen, Partner Gorin+Cohen Consulting Group LLC

Demand for modern campsites and RV sites has never been stronger. The growth in consumer interest in RVing and camping has resulted in the development of new RV parks and the expansion of established campgrounds throughout the country at unprecedented highs. It is critical that a practical and prudent plan be developed before a shovel is put in the ground. Too many campground and RV park owners and developers have been penny wise for not seeking professional help or pound foolish for shopping for the most inexpensive professional services available. This mentality has resulted in a proposed expansion or development being rejected by planning and zoning, expansion or development not being the best it could be, the site density not being maximized to produce the highest revenue, building the wrong business model, paying higher construction costs, or by making costly mistakes and wasting time using inexperienced consultants and land planners or none at all. This shortsighted behavior occurs at many stages in a project. Before plans are prepared, and applications are made, a trained expert in the camping and RV park industry can provide valuable guidance in determining the probable success or failure of a new RV park development or expansion.

New RV Park Development

A Market & Competitive Analysis determines the viability of the project and provides the client with an early risk assessment and market analysis for a proposed RV park development. This is the first step. The goal of the study is to provide developers with the guidance and knowledge to make future decisions concerning building an RV park on a specified property. This analysis answers such questions as to where the project will fit in the existing marketplace, what might be the most productive business model, what competitive factors should be considered, and the size, quality, facilities, and amenities recommended for the model. The report offers the developer expert recommendations on the business model leading to a go- or no-go decision to continue or discontinue RV park planning. The most valuable advice ever given is “Don’t do the project!”

Campground Expansion

Most campground owners, who are expanding, understand their market and what is needed. In some cases, expansion is geared towards new clientele and may require a particular level of market and rate analysis.

Operational Audits completed prior to committing and investing in an expansion help ensure current sites are being used optimally. These audits are designed to fine tune day to day operations to improve guest satisfaction, revenue, and profitability.

Land Planning for new RV Park Development and Campground Expansion

Land planning starts with the land planner’s visit to the property or existing campground. Fitting the project or expansion into the natural terrain is especially important. A land planner, who specializes in RV park and campground planning, understands the challenges, and will incorporate natural topography into their plans. This allows for a more visually pleasing and environmentally sensitive plan and the developer will save the land planner’s fees many times over starting with the movement of the earth. It only takes a few hundred cubic yards of dirt moving savings to pay for a plan prepared by an industry expert land planner.

Following a site visit, the land planning research begins with the land planner reviewing surveys, topography maps, aerial photos, wetlands, amenities, and a facility/amenity wish list.

For a new development, this information is organized into a site analysis plan and bubble document demonstrating the ideal arrangement of the project’s elements. The bubble diagram is now the basis for the hand-drawn sketch plan to follow.

The sketch plan is a free-hand colored rendering that outlines circulation, campsites and open space patterns, location of the drainage facilities, recreation spaces, and facilities outlined in the project wish list. It also identifies the expected unit numbers and densities of each site type. This sketch plan can be used for zoning and marketing. After the sketch plan is further refined, it will be produced in an Auto-cad format to be used by the local engineer in the approval and construction drawing phase.
During the zoning and approval phase, many projects are rejected because the proponents did not seek professional assistance to make a professional presentation. They failed to realize the real value of a capable and experienced professional who will properly prepare for the cumbersome process of many community approvals, attending hundreds of public meetings, and answering all the difficult questions raised by officials and the public. True professionals understand that if a project is not properly “marketed” to the local approval body, the project will never be marketed to the public. It is costly to hire an outside consultant for informal meetings early in the process to make the presentations at a public hearing. However, it is a fact that the value of a land parcel increases significantly when its designation is changed for a higher and better use.
A feasibility study is the last step in the initial planning stages. It is generally needed for financial institutions or investors who will be associated with financing the development of the park. This report incorporates the findings of the market analysis and sketch plan, as well as, operating recommendations and pre-opening marketing plans. A high-level review of local and state development regulations and ordinances will identify any health department and environment concerns. The financial planning segment includes rate setting, absorption, occupancy projections, ancillary recommendations, construction cost estimates, and a detailed Pro Forma Five Year projected operating analysis, statements, and return on investment analysis.
Clients benefit from an industry consultant who understands trends in site size, rates, ancillary recommendations, amenities, and facilities, as well as, industry best practices which are essential to the efficient design of new RV parks and expansion of campgrounds. In addition, sketch plans and marketing materials prepared by creative and knowledgeable industry professionals, as part of the planning and approval process, can inexpensively be adapted for use in the marketing of the RV park and campground expansion to the public.
Campground and RV park owners and developers who engage industry consultants to assist in the initial planning and as needed throughout the project, find it contributes significantly to the quality of the project and saves money, time, and aggravation. The right professional may be more costly initially, but the end results should pay their fees many times over.
In your next endeavor, will you skimp on the preliminary planning and be “Penny Wise and Pound Foolish” or will you seek capable and experienced professionals to produce a better, more cost effective, and attractive final project?

Jayne Cohen is the managing partner at Gorin+Cohen Consulting Group LLC. She has extensive knowledge and experience in park operations, expansion, and development. Donald Westphal, Land Planner and Architect is a leader in campground and RV park design. For more information visit www.gorincohenconsulting.com or phone 800.897.8836

May 19, 2020

A Bakers Dozen Lessons from Covid 19 for Small Business

Since March 15th, the day my wife and I decided it was best we begin to take shelter in place and remain at home for the foreseeable future, I've had the time and the motivation to read just about everything I could get my hands on about the US economic pandemic, the heartache and hardships being encountered by small businesses of all kinds, and the financial distress of millions of Americans who count on the tens of thousands of small businesses for their livelihoods to support their families.

In thinking about my own life growing up in a family with an independent smaller business, my adult life managing associations with a preponderance of small business members, and my various ventures into entrepreneurship as the owner of small retail sporting goods stores, developing and owning a small RV resort, investing in RV and mobile home park ownership and to building two small consulting companies, I've reflected back on lessons I've learned from my father, my colleagues in the association world and most of all from my 32 years in the RV park and campground industry.

Thought it might be helpful to share some of the lessons I have learned over the years and that I've taught at the School of RV Park and Campground Management and at many state association conventions. And I am proud to say I've put these lessons to good use in my business ventures over many years.

  1. You can only spend money that is yours.
  2. Deposits are liabilities until earned. You have not earned a penny of the deposit until you provide the service. Deposits are not your money until you deliver what was promised to the consumer who entrusted you with their money with a certain expectation.
  3. Depreciation is not additional profit. The federal tax code allows you to deduct depreciation on assets not so you can pocket extra money that would have otherwise been taxed but so you can put aside dollars to replace assets as they age and need to be updated.
  4. Understand the meaning of EBITDA - earnings before interest payments, taxes, depreciation, and amortization. Deducting these items from your earnings tells you exactly how much money you have to spend after you meet your interest and amortization payments on loans after you pay your income taxes, and after you've set aside money to fund depreciation. What's left is your profit and free cash flow to do as you wish.
  5. Put away 3-5 months of operating expenses in cash for the unexpected emergency, even if you have income loss insurance. From your profit, decide how much to put away for unanticipated personal and business needs.
  6. Re-visit your insurance coverages very carefully, especially income loss provisions and all exclusions. Wow, did we all ever learn this lesson in 2020.
  7. Plan to cover insurance exclusions. No matter how things turn out going forward, insurance companies are not likely to remove pandemics, acts of God, and other exclusions from your insurance. You need to somehow be prepared to self-insure for these losses and emergencies.
  8. Need a good reason to plan for larger sites in new developments? Larger RV spaces with 40' + widths are critical, not just for comfort and privacy, but for all kinds of safety reasons as we are learning these days.
  9. Re-think cancellation policies to meet your needs and the emergency needs of your guests. Offer credits for future use enhancing them with added bonus amounts for accepting a credit in lieu of a cash refund. If you take these lessons seriously, you will be able to be flexible with refund policies in the event of an emergency or unexpected event and able to demonstrate kindness and compassion to your guests.
  10. Increase focus on individual family activities rather than group activities. Everyone brags about camping as quality family time. Put your activities where your advertising is.
  11. Consider a return to more traditional camping - more like state parks. There is no doubt that people love their state and national parks. Be more like them.
  12. Always, always have a backup plan. Financial plans for one year or two years or longer should always be stress-tested by playing out a variety of "what if" scenarios. What it...your clubhouse burns down? You are hit by a tornado? Your water supply goes bad? Your pool is closed for health reasons? Your revenue or expenses cannot or do not meet expectations or expenses exceed revenues? Are you prepared with a backup plan?
  13. During good times, prepare for the bad times. Lines of credit are best put in place during profitable periods.
  14. These are lessons we all need to learn and put into practice. Small business is fun when things go right and very stressful when things go wrong and you are not prepared for the unexpected.

    The RV park, campground and RV industries will recover but we've all learned valuable lessons from the 2020 Pandemic. Use the lessons wisely.


    David Gorin
    Gorin+Cohen Consulting Group LLC

May 19, 2020

Outdoor Hospitality and COVID - what does the future look like?

First and foremost, we hope you and your families are healthy and safe during these crazy and stressful times. The Gorin+Cohen team is well and has been working from home since mid-March. We have been busy assisting clients with action plans and PPP strategies, writing a Standards of Operations manual, and working on several market analyses and feasibility studies. The time grounded from travel has allowed us to catch up on all the organizational and administrative items you tend to push aside when busy with other projects. Most importantly we have done our best to keep our fingers on the pulse of the industry; attending industry-related webinars, reading all the reports and trade info we can get our hands-on, and attending the two days "Back to Camping Summit" this past Monday and Tuesday.

My career in the camping industry has not just survived but flourished through 6 recessions including the great recession in 2008 and the first half of 2009. The industry grew each year through gas shortages, high unemployment rates, soaring gas prices, high-interest rates, the September 11th attacks, and the subprime mortgage crisis. In fact, throughout my 36 years of operating campgrounds and RV parks, beginning with my first season in 1972 through my last season in 2011, gross revenues and profits increased each year. This said, there were times through certain crisis and recessionary periods where policies and procedures needed to be adapted to achieve this success.

Prior to the pandemic, the outdoor hospitality industry was in the midst of many years of double-digit growth. As the economy reboots and states begin to reopen for business, what does the future hold for the camping and RV industry? No one has a crystal ball to accurately predict the future but let us share some of our thoughts with you regarding the anticipated impact of COVID-19 on the outdoor hospitality industry.

For the most part travel is at a standstill. Cruises are down to nothing; air travel is seeing 5 percent and hotels 10 percent of their respective typical volume. While consumers are eager to travel, they are frightened; fearing for their health, and for many finances are strained. Of all travel options available, camping in their own RV is the most attractive to travelers because it is the safest means to vacation in the COVID world we are living.

Camping naturally lends itself to social distancing. Renting a cabin at a campground or RV resort is more attractive than being in a hotel with rooms side by side, shared corridors, lobbies, elevators, and HVAC systems.

Campgrounds and RV parks are organically adaptable to COVID safety measures especially compared to other travel options. There is an opportunity for our industry to bring camping into the mainstream of travel, and market to consumers who may have never camped before or even considered camping. KOA's 2020 North American Camping Special Report reveals that 46 percent of all leisure travelers (campers and non-campers) view camping as the safest way to vacation.

Campgrounds, RV parks, RVshare, an online RV rental marketplace, and RV Life, a network of consumer-facing camping websites, report reservation traffic has begun to tick up since mid-April. KOA began seeing more reservations than cancellations on April 15th.

Campgrounds, that have been allowed to open, report sold-out weekends, and increased summer reservations. Changes in camping behavior because of COVID are evident. Most people will camp closer to home by choice or because they are confined to camp within their state. Many will choose seasonal or longer extended stays rather than traveling the country as they had planned. Guests making reservations are seeking flexible cancellation policies which at the very least allow credits after booking, contactless transactions, and transparency in the park's COVID safety and cleaning policies.

Many RV manufacturers are back to work. 2020 RV shipments were ahead of 2019 through February. Many RV dealers are reporting steady sales. Camping World stock prices increased by 35 percent. RVshare and other RV rental companies reported record reservations before the March downturn. Since mid-April there has been an uptick in reservations and strong but different growth is projected. Campers are not booking as far in advance as in the past instead of reserving closer to their trip date.

The future of camping is bright. There is strong short-term optimism for June, July, and August. The fall will be determined by what is happening with the virus come late summer. Post vaccine the outdoor hospitality is projecting a surge possibly greater than ever seen.

Parks will need to rethink how the business looks for the remainder of 2020 and be prepared to change course if needed. Marketing will need to focus more locally even for those in national destinations. Parks which are primarily transient may want to offer more seasonal or extended stays. Delaying repairs and maintenance or capital improvements may be advisable if a park is unsure of their occupancy and cash flow.

The RV and camping industry has had tremendous resiliency during the past economic downturns and proven to be significantly recession-resistant. The recommendations for social distancing, staff and guest masks in indoor areas, daily staff health checks, and watching for guests with obvious health issues, and for "staycations" benefits RV parks and campgrounds.

A fundamental reason people purchase RVs is for independent travel. Unlike cruises, where thousands of people are traveling together, and airplane travel, where passengers may be exposed to unknown viruses, RVers travel in small family groups in their own vehicles staying in their own RVs. Further, the nature of RVing and camping as an outdoor activity keeps RVers and campers from large gatherings in closed spaces.

In tough times, people still take their vacations, although the way they vacation often changes. The RV and camping industry offers safe and fun alternatives for people who still want to vacation. Consultants expect the RV and camping industry to ride out the current economic downturn and come out of this situation far better than other travel and recreation sectors.

Like campground and RV park operators we at Gorin+Cohen have had to adapt our way of doing business. While nothing replaces visiting an RV park or potential property for development, or meeting with our clients face to face, through the use of modern technology, internet, and phone we have been able to continue with our feasibility studies, operational audits, and other services offered. There is no better time to get on our schedule than now. Our schedules will be filling up quickly once travel restrictions are lifted. Visit www.gorincohenconsulting.com for a full list of services offered.

Thank you for your continued trust and confidence in our services.


Stay healthy and safe.
Respectfully,

Jayne Cohen
Principal
Gorin+Cohen Consulting Group LLC

DEBBIE SIPE JOINS GORIN+COHEN CONSULTING GROUP LLC AS IT EXPANDS ITS PRACTICE INTO WESTERN STATES

The former campground association executive from California joins the firm as it faces unprecedented demand for feasibility studies for new and expanding campgrounds and RV parks

Debbie Sipe, who built a four-decade career with California's campground industry association, has joined Gorin+Cohen Consulting Group LLC, which is expanding its practice into Western states as the firm experiences unprecedented demand for feasibility studies for new and expanding campgrounds and RV parks.

"Debbie spent most of her adult life learning about California's famously complicated regulations and permitting processes. She adds considerable campground and RV park industry knowledge to our firm, not only as we expand our services into Western states, but as we recruit additional consultants to help us keep up with an unprecedented increase in demand for our consulting services," said Jayne L. Cohen, a partner with Gorin+Cohen Consulting Group LLC.

The firm, which has a nationwide network of nine consultants, produces independent feasibility studies that current and aspiring park operators often need to obtain financing for their projects. The company is experiencing a sharp increase in demand for its services as growing numbers of investors see RV parks and campgrounds as worthwhile investment opportunities as rising demand for quality RV sites outpaces the supply.

"Our phone is ringing off the hook. I have never seen anything like the growth we are seeing now in terms of new parks being built and expansions of existing parks," she said.

Cohen herself has spent nearly four-decades in the campground business, including 28 years operating a Jellystone Park Camp-Resort in Ashland, N.H., eight years developing parks as president of Adventure Bound Camping Resorts and many years working as a self-employed campground industry consultant before becoming a full-time business partner with David Gorin in 2015.

Nearly a decade of record and near record RV sales has dramatically increased demand for RV sites, she said, which is prompting developers and existing park owners to build new parks and expand existing ones, wherever it's feasible to do so.

"In many areas of the U.S., there is quite a bit more demand for RV sites than there is supply," Cohen said. "Even marginal parks are seeing their occupancies go up."

Gorin+Cohen Consulting Group LLC , for its part, is well positioned to provide feasibility studies for new and expanding parks, having some of the most experienced and best known consultants in the private park business. The firm was founded by David Gorin, a longtime lobbyist, campground industry consultant and RV and Manufactured Housing Hall of Fame inductee who helped establish the National Association of RV Parks and Campgrounds (ARVC) as the voice of the North American campground industry.

Gorin established David Gorin Associates LLC in 2002 and served as CEO of the Virginia Campground Association from 2002 to 2011, a client of his firm. He also continued to work for the national association for many years as a lobbyist and legislative affairs consultant while also building his consulting work with private park operators, developers and investors nationwide. Gorin has been a leading proponent of luxury RV resorts and has consulted for numerous developers who have built high end RV resorts in Florida and other Sunbelt states that sell their sites to RV owners. He and a business partner recently developed Holiday Cove RV Resort in Cortez, Fla. in 2007 and 2008 and are currently working on another new RV project in the southwest part of Florida.

Sipe, for her part, has adds considerable expertise and experience as Gorin+Cohen Consulting Group LLC expands into Western states. She has spent her whole life in the campground business. She grew up working for her parents, Tug and Judy Miller, who built the Auburn KOA, which they sold in 1984. The Millers also helped run the association now known as CampCalNow RV Park and Campground Alliance from its inception, when it was known as the California Travel Parks Association (CTPA).

Tug Miller worked with other industry consultants to successfully persuade the California Department of Housing and Community Development to create an exclusive set of guidelines for campgrounds and RV parks under Title 25 of California's Code of Regulations.

Sipe started working for CTPA in 1981, during her first year at California State University, Sacramento, where she earned a Bachelor of Arts degree in English. She became intimately familiar with her father's government affairs work along with the permitting and regulatory hurdles that new and existing park operators face as they try to build new parks or expand existing ones.

Sipe was promoted to executive director of CTPA in 2004, which was renamed the California Association of RV Parks and Campgrounds in 2008. Camp-California! Marketing, the association's marketing arm, was formed in 2002 and Sipe became its CEO in 2004 at the same time she assumed the leadership of CTPA. Sipe also served on the CalTravel Board of Directors and Government Affairs Committee for 12 years between 2006 and 2019. Sipe retired from the association last year after it was renamed CampCalNow RV Park and Campground Alliance.

"I'm excited to join David Gorin and Jayne Cohen as I enter this new phase of my career," Sipe said. For more information, please visit https://www.gorincohenconsulting.com.

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"Jayne understands what is needed to make a business successful. Her tried and tested suggestions and recommendations have been sensible, practical, affordable and profitable. She listens and is responsive to our needs. Her services have paid for themselves through either increased or new revenue streams and/or savings on the expense side!"

Gina & Mike Lenhard, Jellystone Park, North Hudson, NY

"Jayne has been extremely helpful with both the business opportunities and the family issues we face as a fourth generation campground. She has a wealth of experience and a very pleasant manner."