Part 2 – Is yield management right for the campground industry?

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Editor’s note: This is the second of a tw0-part series on yield management. The first segment focused on what yield management is about, and the second part focuses on how it can impact the outdoor hospitality industry.

By Brian Schaeffer

Some years ago, I had a guy call me who was in the business of putting motorhomes on the infield of Texas Motor Speedway for big races and renting them out. He got me $500 to $600 a night with a five-night minimum on my motorhome.

I stopped the program because I didn’t want the hassle of removing my personal items from the unit during rental periods.

The guy called one more time and said, “I need your rig. I have one site left and no rig for it at TMS.” I said no.

He said, “I have a race car driver’s father willing to pay $1,000 a night for five nights.” I said, yes and removed my personal items from the rig for $5,000!

The guy who stayed in my unit wasn’t mad. He was ecstatic to have the opportunity to see his son race and stay on the infield at TMS. Yield management baby! It really works.

The same father of the same driver requested my unit for the very next race at the same price. Was his behavior influenced? Was my profit maximized?

Could there be other reasons why many parks do not use yield management? Absolutely.

A big one is, “Hey, I’m full and have been for the last two years and the wait-list just keeps growing.”

OMG, how much money are you really leaving on the table.

The other big objection is, “If I raise my rates, everybody will leave.”

OK, yield management isn’t about raising rates – please re-read the definition below and then let’s look at some specific examples.

It’s easy to recognize potential yield management situations, such as sold-out holiday weekends, over-booked high seasonal months, big area projects driving monthly clientele (such as oil & gas discoveries), etc.

These could obviously fall under the “make hay while the sun shines” form of yield management and the kind of park operator reactions I described in Part 1 on this subject. But this isn’t really yield management.

Yield management is a variable pricing strategy, based on understanding, anticipating and influencing consumer behavior in order to maximize revenue or profits.

Try this. Log onto any major airline’s website and search for a route/ticket, but don’t book it.

Then wait a couple of days and use the same computer (same IP address) and try booking the same ticket. The price is higher! Why?

Because the airline knows who you are and wants to influence you to book your seat the first time at the lower price; so they don’t lose you as a client and they will know what their yield is going to be.

Otherwise, they have to charge more for open seats to make sure they get the yield they desire. And you thought it was all driven by seat availability – NOT!

What about when you have open campsites? Does yield management apply then? Yes, if you know what yield you are trying to achieve and you are committed to achieving it.

One could argue that you need yield management the most when you have open sites. But, yield management could lead to open sites. Yes, but that is not a bad thing if you are still achieving the profit you desire.

Did you read the words, maximize revenue or profits?

And, you can actually get a little work done around the park when you are not 100% occupied for weeks or months on end.

Hope this has been helpful. Keep an open mind and give it a shot. You will benefit in the short and long run.

Brian Schaeffer

Brian Schaeffer

Brian Schaeffer is the executive director and CEO of the Texas Association of Campground Owners (TACO). He is also the president of Texas Advertising and AGS, a company based in Crowley, Texas, that produces guest guides for campgrounds throughout North America. He can be reached at brian@texasadvertising.net.

Leave a Comment

  • Tracky says:

    Leave things as they are. Why complicate things…

  • Richard welch says:

    It’s not about raising rates, it’s about raising profits, the yield is money in your pocket. Think of a 100 site campground… would you rather sell 100 sites for $30 or 50 sites for $60? Either way it totals out to $3,000 for the day. But you make more money selling only 50 sites at the higher $60 rate. Yield management helps you find the price point where you put the most money on your pocket after expenses.

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