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For KOA, 2017 will be full-steam ahead

For KOA, 2017 will be full-steam ahead

CHATTANOOGA, Tenn. — Kampgrounds of America President and CEO Pat Hittmeier had nothing but good news for the 700 people attending KOA’s annual owner’s convention here this week.

In a presentation to open the conference, Hittmeier noted same store sales were up 34 percent last week compared to the same period in 2015, a trend that now sees just as much traffic in September as the campgrounds see in May.

“Most of our campgrounds were built in the 1960s, 70s and early 80s,” he explained. “But our brand is just starting to hit its stride.”

Corporate campgrounds and franchisees have been working hard to improve their facilities in order to live up to KOA’s brand promise, he noted. As a result, KOA enjoys recognition levels that are the highest in company history.

Playing off Jeff Foxworthy’s stint “you might be a redneck if,” Hittmeier applied it to KOA campgrounds. He suggested franchisees might be in the right business if:

  • Every idea works — “It’s amazing how good we all are when business is good and campers like camping, KOA and KOA owners,” he said.
  • You consider buying a “no vacancy” sign because you’re selling out every weekend.
  • You open a gift catalog and start seeing a lot of gifts with camping themes. He recalled a recent trip to a gift store where clearly one-quarter of all the items displayed were camping related.
  • More people than ever ask what it is like to own a KOA.
  • You have 15,000 people following the brand’s Instagram activity, which is up 184 percent over last year. He encouraged owners to open Instagram accounts to see the pictures and images that define camping and the owners’ particular campgrounds.
  • Your company has 400,000 Facebook fans, up 30 percent from the year before.
  • A total of 500,000 people download your app, and 90,000 people use it every month
  • Your web reservations alone produced $115 million in revenue, up 21 percent in a year.

Hittmeier announced that KOA campgrounds as a whole succeeded in raising the company’s net promoter score from 45 to 60 in just five years. The score is based on the percentage of people who indicate they would recommend the company to others. It can range between -100 (everyone hates the firm) to 100 (everyone loves the firm.

Pat Hittmeier

“The fact that our 500-campground family with locations of all sizes across all of North America has been able to move that needle from 45 to 60 in five years is a testimony for your effort to create great experiences at KOA,” he explained.

The climate for outdoor experiences is on fire, Hittmeier said, noting that KOA owners are fortunate to own a campground at the same time the business climate for camping is exploding.

“Our marketing department has been throwing gas on that fire, and we’re all doing much better because of their efforts,” he added.

KOA campgrounds are often better the competitive campgrounds for several reasons, Hittmeier explained. First, the corporate office is obligated to live up to the brand promise. Second, the franchised campground owners are exceptionally competitive as they work to make things a little better and nicer at their facilities in light of what other local campgrounds are doing.

He praised those owners who were making an investment in their business by modernizing sites, facilities and service.

“Because our customers have enjoyed multiple years of great service with the KOA brand experience, it’s like putting money in the bank,” said Hittmeier. “As you continue to create great experiences for guests, that deposit goes into an account that will continue to serve you later on.”

In 2003, when KOA first started measuring guest experiences, 237 of the franchise’s campgrounds could boast of a satisfaction score of 40 percent or more. Today, that number is 368, he noted.

“That tells me that each one of you is doing a great job of providing memorable campground experiences, which is being paid forward to the next KOA campground our guests visit.

Soaring registrations

KOA’s growth in online registrations has been meteoric, said Hittmeier. In 2012, 5.8 percent of all reservations were made online. In 2013, that number climbed to 13.5 percent, and then to 23.2 percent in 2014.

But, in 2015, the number of online reservations jumped to 39.7 percent and, in 2016, more than half of all reservations were made online at 53.9 percent.

“This is the second year in which September has been a bigger month for camping than May,” said Hittmeier. “In fact, we experienced an 18 percent growth in occupancy between September and October.”

The growth is causing some inventory challenges for the KOA system in that many campgrounds are completely sold out on summer weekends.

Between 2014 and 2015, KOA’s occupancy rate grew at a 13.6 percent pace. But, between 2016 and 2016, that number climbed only 10.5 percent.

“While occupancy growth is slowing, we are predicting a 5 percent growth on short-term visits next year, which will correlate to a 9 percent increase in revenue,” he explained.

He predicted that 2017 will be just as good, if not better than 2016 as gas prices are expected to remain low through 2020, and the propensity for travel to see North America is stronger than it has ever been.

“Every year we provide the experiences to customers we do so well, and everyone is talking about it to their friends and family, it just amplifies the desire to stay at a KOA, said Hittmeier.

Demographics are in KOA’s favor, too, he added. Baby boomers continue to stay healthy and active. They are buying RVs, retiring and traveling as they have been for a decade — and will continue to “fuel the business” for the next 10 years.

Millennials, which is a greater number than baby boomers, aren’t buying RVs as much as boomers, but they love brands and love KOA, he added. For them, it’s all about the experience that KOA delivers.

Although the election will bring changes to the federal government, Hittmeier expects there to be continued government involvement in business simply because of the bureaucracy that is in place.

Hittmeier encouraged his franchisees to go full steam ahead with capital improvements, and even offered assessment tools to help them identify neglected projects and prioritize them.

“We can’t stop now. Things are too good and we’re not where we need to be, yet,” he explained.

The increased business was exemplified by the fact 75 percent of KOA owners have opted to brand their campgrounds as a Journey, Holiday or Resort. All KOA campgrounds will be required to adopt a brand position by 2020. However, he pledged support to make the transition as easy and painless for everyone.

“We’re going to work with owners on a one-on-one basis,” said Hittmeier. “We aren’t going to issue a mandate and leave it up to you to figure it out.”

Going forward, he pledged an increased focus on research and development by trying new things at corporate-owned campgrounds and identifying new services and amenities franchisees can use to improve their business.

“Our goal is to develop some signature amenity and service items — like patio sites — that KOA will ‘own’ in the market and help our franchisees implement them to help grow their business,” he explained.

The convention continues through Thursday and will cap with an auction to benefit KOA Care Camps, a fundraising effort to help send kids with cancer to camp for a week each summer.

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About Greg Gerber

Greg Gerber is a freelance writer and podcaster who has been writing about the RV industry since 2000. He is the former editor of RV Daily Report.

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