Pelland Blog

Give Your Guests More of What They Want

February 24th, 2018

I opened a box of breakfast cereal recently, and the inner bag of contents reached about half the height of the packaging. It was a classic example of the disclaimer that warns us that “contents are sold by weight, not volume”. If the packaging properly matched the size of its contents, it would have been half the size, have far less visibility on the supermarket shelf, and I probably would have passed on a purchase that did not appear to represent a very good value. You might say that I was deceived into making the purchase. Even though I liked the cereal, I am unlikely to purchase it again.

There are so many instances where corporate marketing decision-makers seem to underestimate the ability of their customers to make informed buying decisions and to alternately choose substitute products. Then there are instances that border on collusion, where companies follow the lead of a competitor who trail-blazes a reduction in product size without a corresponding reduction in price. For example, it only took one orange juice company to shrink its half-gallon container down to 59 ounces before every other company quickly followed suit. The same thing happened with ice cream, where the half-gallon container somehow evolved into a quart and a half. Perhaps the greatest offenses to consumer intelligence are meaningless comparison claims. I recently purchased a 50 ounce container of liquid laundry detergent where the label prominently stated “25% more ounces” (in a 36 pt. bold font) “vs. 40 fluid ounces” (in a 6 pt. light font). Needless to say, that claim did not influence my purchase.

Respect Your Guests’ Intelligence

People who feel that they have been somehow deceived into making a buying decision are almost never going to be return customers. When it comes to the outdoor hospitality industry, one of the biggest complaints is when guests feel like they are being “nickeled and dimed” during their stay. Although it is far preferable to avoid the imposition of add-on fees for incidentals like showers, Wi-Fi, or your planned activities, it is very important that any such fees be fully disclosed at the time of reservation. (One of my pet peeves is the imposition of so-called “convenience fees” for the making of reservations themselves!)

My best advice is to bundle as much as possible into your basic fees, promote the value within your rate structure, and stop presuming that people are comparison shopping for price without reading the fine print. One trend that I hope does not make inroads with the outdoor hospitality industry is the growing practice of hotels to impose so-called “resort fees”. This practice is so deceptive that it has generated lawsuits filed on behalf of consumers by 47 state attorneys general, who had recently negotiated an agreement with the Federal Trade Commission, until the Trump administration ordered the FTC to back off, siding with the hotel industry rather than the interests of consumers. Nonetheless, guests have little or no tolerance for deceptive rate embellishments.

Consider the All-Inclusive Approach

A far better – and opposite – approach is the all-inclusive concept, where guests are willing to pay a premium for the privilege of avoiding add-on fees. The all-inclusive concept originated with Club Med way back in 1950. It is the rule rather than the exception in some vacation destinations such as Mexico and the Caribbean. The concept has since been embraced by resort operators, cruise lines, travel agencies and online booking companies, several major airlines (including United, JetBlue, and Southwest), hotel chains (including Marriott and Hilton), and even wholesale buying clubs like Costco.

With all-inclusive pricing, as the name implies, guests willingly pay a premium fee for the privilege of vacationing without having to pull out their wallets throughout the course of their stay. All-inclusive pricing is most popular with destination resorts and highly competitive, saturated tourism markets. Probably the best known and most broadly marketed of these practitioners is Sandals Resorts International, which now promotes the tagline of “more quality inclusions than any other resorts on the planet”. Their all-inclusive stays include accommodations, dining, wine and spirits, golf, water sports, scuba diving, land sports, and entertainment. Even here, there are fee-based options such as spa treatments, premium wines, and scuba certification, as well as some restrictions on golf that vary from one resort or level of accommodations to another. The bottom line is that guests feel that they are being offered far more than they would otherwise expect.

Unfortunately, when I perform a Google search for the terms “all-inclusive campgrounds” or “all-inclusive camping resorts”, the results are pretty limited. I am more likely to find dude ranches, cabin resorts, and family resorts that do not fit the definition of a campground. Nonetheless, it seems that there is a small but growing list of campgrounds, ownership groups, and franchises that are discovering and beginning to capitalize upon the “all-inclusive” buzz words.

When I clicked through to the website of a campground in Michigan that calls itself “all-inclusive”, I found that it did not charge extra fees for most of its planned activities (something that is not all that uncommon); however, it charges extra fees for bike rentals, boat rentals, boat launching, and a few other “add-ons”. Another park in Wisconsin is promoting its all-inclusive pricing but is also charging for a short list of optional services that include boat and golf cart rentals, its laundry, and honey wagon service. Finally, a Jellystone Park in Texas is really promoting an all-inclusive pricing concept that includes full use of a wide range of recreational amenities – from miniature golf to a jumping pillow to a splash park. In each instance, the point of emphasis is not the list of fee-based options but the list of what is included at no additional charge.

The key to growth in the family camping industry has always been to draw in a new wave of guests who do not currently consider themselves campers. To reach them, offer them the unexpected and create the perception of overwhelming value that they have come to appreciate elsewhere. An all-inclusive approach to pricing may prove to be an idea whose time has come.

This post was written by Peter Pelland

The Evolution of Two Industries

July 2nd, 2015

The 2015 Outdoor Recreation Participation Topline Report from the Outdoor Foundation includes a breakdown of outdoor participation by activity for everything from Adventure Racing to Wildlife Viewing. In summary, it reports that 48.4% of Americans participated in at least one outdoor activity in 2014, translating into 141.4 million participants engaging in a total of 11.8 billion outdoor events. These are impressive numbers, many of which are skewed – either positively or negatively – by weather patterns; however, it is important to examine individual industries in order to get a better grasp regarding trends.

With the gathering of statistics going back to 2006, the report includes 3-year changes within individual activities that provide a quick snapshot of either increases or decreases in participation. There are similar trends exhibited between Alpine/Downhill Skiing and RV Camping. Putting aside the reported 3-year changes, I think that it is even more compelling to compare the 2014 participation numbers with the high water marks within the 9-year survey period. Measuring people ages 6 and up, skiing peaked in 2010, when there were 11,504,000 participants, decreasing 24.8% to 8,649,000 participants in 2014. Similarly, camping peaked in 2009, with 17,436,000 participants, decreasing 16.1% to 14,633,000 participants in 2014.

Beyond Blaming the Weather, What Is Happening?

I have been working with the family camping industry since 1982, although I started my business in the New England ski industry back in 1980. With an intimate understanding of both industries, one of my most fascinating recent reads was Hal Clifford’s “Downhill Slide: Why the Corporate Ski Industry Is Bad for Skiing, Ski Towns, and the Environment”. In this compelling exposé, Clifford documents the evolution of skiing from its roots in Scandinavia, through a growth spurt following the 1932 Winter Olympics in Lake Placid (New York), through the development of Sun Valley (Idaho) as the first destination ski resort back in 1935-1938, through the return of World War II’s 10th Mountain Division veterans, through another growth spurt following the 1960 Winter Olympics in Squaw Valley (California), through the “industrial tourism” that it became in the 1990s – when 3 major companies then controlled 24% of ticket sales from coast to coast. I believe that there are parallels between the downhill skiing and family camping industries.

The ski industry in the United States was essentially given birth in the first three decades of the twentieth century, including the development of Sun Valley as the first destination resort by railroad magnate W. Averill Harriman. By 1938, Harriman understood that there was far more income to be generated than what could be realized through lift ticket sales, adding tennis, golf, fishing, rodeo, hiking and swimming. The “golden age” of skiing took place in the 1950s. This was the period of time when 2,000 veterans from the Army’s 10th Mountain Division returned home from the Italian and Austrian Alps to kick-start the post-war ski industry, founding, managing, or running the ski schools at 62 American ski resorts. In New England alone, there are 605 former ski areas (most operating in the 1950s) that are documented by the New England Lost Ski Areas Project. Most of these were “mom and pop” operations run on snowy hills, with rudimentary rope tows run by the likes of tractors or old Packard automobile engines. In Massachusetts alone, my company has at least two campground clients with campsites that are partially located on the remnants of the slopes and trails of former ski areas.

In the 5 years following the 1960 Winter Olympics at Squaw Valley, skier days increased by 50%, with the greatest increase going to destination reports. The handwriting was on the wall for the mom and pop areas attempting to compete. A decade later, in 1975, there were 745 ski areas in the United States, a number that would drop to 509 by the year 2000. Despite the advent of snowboarding, total visits to ski areas stagnated in the 1980s and 1990s, numbers which would have witnessed double-digit declines if not for snowboarding. According to Clifford, only 15% of beginners go on to become serious skiers. Although 33 million Americans considered themselves skiers or snowboarders (at the time when the book was written, in 2003), only a third of them actually go out even once in any given year.

Part of the problem with the ski industry is the aging of the post-war baby boomers. Statistics have shown that, once they hit the age of 44, the average skiers hang up their skis for the last time. The changing population does not bode well for the ski industry. People today have less leisure time, less disposable income, and new interests – such as fitness clubs and the Internet. Another strike against skiing is that it requires a learning curve, and most people today want instant gratification.

Lift Tickets Equate to Campsites

It is a well-documented fact that most of the ski industry is no longer in the business of selling lift tickets. Even with single-day lift ticket prices topping $100.00 at many ski resorts this past season, those ticket sales cannot begin to cover expenses. In the year 2000, a Poma detachable quad chairlift would cost just under $3 million to install, plus another 15% for site preparation. Then it would cost about $14,000 per month for the electricity to turn the lift. At the same time, an 8-place gondola carrying passengers only 2,200 ft. would run about $6 million, with a monthly electric bill of about $20,000. Not pocket change, even some of the biggest corporate players have faced economic challenges.

Then there are snowmaking costs. Again in the year 2000, the air compressors to run a bank of snow guns cost about $250,000 each, basic snow guns cost about $1,000 each, fan-driven snow machines cost about $10,000 each, and the electricity to make the snow might cost a large resort $1,000,000 per season. Clifford cites an interview with the general manager of Sugarbush Resort (Vermont), who said at the time that his snowmaking costs were $1,000 per acre per inch, with a monthly electric bill of $300,000 to $400,000. For all of this money, skiers and snowboarders get snow conditions that are as predictable as a MacDonald’s hamburger … something that not every skier actually wants. Whether or not skiers demanded the industry improvements, or whether they got caught up in the competitive one-upmanship of corporate skiing, the industry has changed. Just like the cruise industry, the theme park industry, and perhaps what is beginning to happen with camping.

In the ski industry, the profit center is now real estate development, with million dollar building lots for second homes, condominiums for every middle-to-upper income level, fractional ownership, absentee homeowners, and artificial “ski villages” that are designed to keep all of the dollars spent in the resort’s pockets. People who were once attracted to authentic ski towns and their ambiance have found those towns displaced by the new manufactured village concept, with bars, restaurants, shops and hotels all designed to capitalize upon that now lost romantic notion of the ski towns of yesteryear.

At one extreme is the relatively new concept of the private membership ski resort. The Yellowstone Club, in Montana, is only open to members who can demonstrate a net worth in excess of $3 million, paying an initiation fee of $250,000 and an annual $16,000 membership fee – along with the mandatory purchase of property at the resort. Then there is The Hermitage Club, in Vermont, (located at the former Haystack Mountain, one of my favorites back in the day), with an initiation fee of only $75,000 and billboards along Interstate 91 in Connecticut and Massachusetts touting “your own private ski resort”.

The good news is that there is a backlash in the ski industry, with a growing popularity of back-to-basics skiing, often cooperatively owned, at ski areas like Vermont’s Mad River Glen, California’s Bear Valley, and British Columbia’s Shames Mountain. There are also many of the healthier “mom and pop” areas that are still maintaining their niches in their markets.

Yes, there are many parallels between what is happening in the ski industry and the family camping industry in North America. I will leave it to my readers to connect the dots. The bottom line is that there are forces that are driving up the price of camping, that profits cannot be based solely upon campsite fees, and that there is plenty of room for diversity. There are many definitions for the “perfect camping experience”, and it will continue to be the goal of every campground to effectively market itself within its niche target market. Define your park’s experience, and then do everything you can to get the word out, helping the people who want precisely what you are offering to find you.

Change might be inevitable, but the survival – and continuing success – of your business is held within your own hands.

This post was written by Peter Pelland