Outdoor Hospitality Myth Busting with Mike Harrison and Wendy Heineke

Welcome And Guest Introductions

SPEAKER_01 0:05

Welcome to the Outdoor Hospitality Podcast. I am your host, Sherry Halala, and today we've got a little bit of a new fun format for you. We are going to be busting myths in outdoor hospitality. I have got two of the greatest minds in hospitality with me today. First of all, speaking of myths, we've got the man, the myth, the legend, Mike Harrison with CRR. And we've got the illustrious Wendy Heineke with Hospitality Across America. Before we get started, Mike, could you tell our listeners a little bit about yourself and your company?

SPEAKER_00 0:44

Absolutely. Thanks for having me, Sherry. And hello, Wendy. My name is Mike Harrison. I am the Chief Operating Officer of CRR Hospitality. We are an upscale outdoor hospitality management company. We're owners and operators of upscale RV and glamping resorts as well as hotels. We have large storage properties, a few car washes, a manufactured home neighborhood, lots of different verticals in the space that we own and operate. We also do professional consulting as well as third-party management for other owners that don't want to manage their glamping or RV properties. We all come from the hospitality world. I have more than 25 years in the hospitality and food and beverage industry before coming to the outdoor hospitality world about six years ago. And I'm very excited to be here.

SPEAKER_01 1:32

Thanks, Mike.

SPEAKER_02 1:33

Wendy. All right. Well, my name is Wendy Heineke, hospitality across America, and I do full outdoor hospitality consulting. So really what I do is going from the operational side to revenue management side. I've come from the hotel background and started doing this years ago, probably six years ago for the outdoor hospitality, but I've been in the field for about 35 years. So really I'm a chameleon, as I call myself. I can assist in anything from operations, sales, and marketing to asset management.

SPEAKER_01 2:09

Great. And I happen to know that you've been a full-time RVer.

SPEAKER_02 2:14

Yes, I was a full-time RVer. Three years, for three years, sold everything and decided to go full-time RV and travel the country about 75,000 miles. We went to over 150 different campgrounds and retired from the hotel industry and decided to get into this wonderful outdoor hospitality and use the skills as a hotelier and really see the great need that is in the outdoor hospitality space.

Myth 1: A Beautiful Property Is Enough

SPEAKER_01 2:44

Awesome. Thanks, Wendy. Well, let's jump into it. We've got a list of myths that we want to bust here. And I'm going to start with the first one, which is a beautiful property is enough. You've got a great property, it's got a great view. How can you miss, right? What do you think?

SPEAKER_02 3:03

I'll take this one, Mike. You know, beauty is gets the first booking, right? I mean, no matter what, the if your property looks good online, it gets a first booking. But then after that, operations will always get that second one. So, you know, it's all about repeat guests. It's a consistency. It could get you the first booking, but it will not get you further than that. What do you say, Mike?

SPEAKER_00 3:31

Yeah, I mean, I think, you know, this was true in both the after hospitality and the hospitality world. You know, what I always say is the owner developer, you know, gives us, you know, the physical structure, right? You know, you may be placed a piece of land that's next to the river, you maybe you have a beautiful clubhouse, but is it a transaction or is it an interaction? Because in the end of the day, we're in the hospitality business. So just because you have an incredible property, it doesn't mean that you're going to provide the experience to the guests that they need. You still got to have a clean property, a safe property, your staff has to be friendly. We want to be providing programming and events and have incredible experiences for them, you know, that provide memories, right? And emotion, memories are tied to emotion. So does your property and experience evoke emotion, or is it just stale and bland because it's pretty? We all know that you know Wendy is pretty, but it's more than just a hollow shell, right? You know, you gotta there's gotta be more of behind the mask.

SPEAKER_02 4:25

Well, that's where the operations comes in, right? Yep.

Myth 2: If You Build It They Will Come

SPEAKER_01 4:29

Yeah, and I think even from a design perspective, is it comfortable and what is that experience in the unit as well? Might look good, but but what is it like to stay there? And does a guest feel comfortable? So a beautiful property is a great start. We could change it to that, perhaps, right? And how about this one? Wasn't it Field of Dreams that said if if you build it, they will come? And I've heard the following.

SPEAKER_00 5:00

That is a lie. We have opened up more than 10 properties from the ground up in the last five years during COVID, which sucked. And if you build it, they will come. That might have happened in 2020 and 2021 in the heart of COVID, where there was just no availability and the national parks were full, and and you know, people had to look for new spaces, but that's certainly not the case in general. You know, obviously, you know, as you do your feasibility studies, you know you've changed your ramp up, you know, considerably from you know what it was to what it is now. And you know, obviously, if you're looking after transient, is a majority of your mix, it's even longer. And so it requires a considerable lift for marketing and sales and and and pre-development efforts. You know, I always say, you know, with the hotel business, you know, there's no such thing as an expedia.com in the RV business. People don't go to one place, right? They go to 30 places Cambendium, RV parky, tripwiz, rv life, good Sam, et cetera, et cetera, et cetera. Plus, there's such an established pattern of behavior from guests. You know, they've stayed there for the last 30 years, their family stayed there before them. And so breaking folks of that mold and introducing them to new property, it takes a lot of effort. And I think that's one of the biggest misnomers. And, you know, sometimes Sherry has experienced this. I'm like the king of no or the fun killer, you know, when I, you know, explain to folks just you know how long it's going to take to ramp, you know, new property and and what the expectation should be of stabilization.

SPEAKER_02 6:28

And I agree. I mean, you really look at the overall picture of it, you've got, you know, you build it wrong, and your customers are gonna drive right past, right? And I think the the the deep dive is you've got to do the concept analysis. And Sherry and I just kind of had a conversation about this, you know, and and the location is a location, especially nowadays. How how good is the location gonna be? And then are they really gonna come? We really are gonna talk about, you know, how if the outdoor hospitality is recession proof, and we're gonna talk about that in a minute, too. But will they come? They might not, you know, it could be beautiful. Back to the first question. They might not come. Yeah.

SPEAKER_00 7:08

Well, people have to know about it, right? I mean, I think that's the, you know, I we just spoke with a prospect, you know, hopefully we saw in the next two weeks up in the Pacific Northwest, it's by far the nicest property within 50 miles, and they opened a year or so ago, and they're struggling at 20%. And like, how how how are we not full? And we're looking at their website and we're looking at their digital marketing because you've got to do more marketing and ramp. And again, if you build it, they will come, it's just not true. So, in if we if Wendy or Sherry, if one of you guys says something, you know, EarthShot, you're you're you're gonna get the that's an important moment uh in the is that the moment or is that edit?

SPEAKER_01 7:52

That is a kazoo, and we are totally fine with the kazoo. Thanks for the last time I saw or heard one.

SPEAKER_00 8:01

Yeah, well, that's we did this at our leadership conference of last year, you know, about you know being comfortable and you know, especially in operations, and I handed out kazoos to everybody, and then I had a random pack of cards with famous songs, and it's like pick a pick a card and play the song on the spot. How do you do? And it was just a great lesson for you know, how do you think on your feet? How do you problem solve? Do you suck at music? Uh, you know, those kinds of things.

SPEAKER_02 8:25

So I have but the one I'm working with a client right now that they built it and nobody's coming. And the the main reason why, Mike, you're 100% correct. It is the marketing. They thought, oh, we can, you know, it we can just open the doors and we're gonna have the COVID demand, and that's not happening. And it's because of the rates and because of the lack of revenue management. Is and the main reason why is because the marketing, nobody even knows that they're there. And there's 20 other resorts around the location, and nobody knows they're even there, and they have such a great resort. Why they will build, yeah, you have to put money into marketing.

SPEAKER_01 9:08

And I think gone are the days where you just put a beautiful unit on a beautiful property. If you don't have demand drivers nearby or an experience that's unique on the property or something for people to do, it's very difficult to draw people in compared to five, six years ago, I think. So all right. How about this one? I've I've heard this many times and probably five, six years ago. Glamping is just a trend. It's a fad. We love and we love talking about the definition of glamping too.

SPEAKER_00 9:47

Yeah, yeah. Absolutely not. You know, no matter what report you look at, you know, glamping continues to be the fastest growing part of our segment. It doesn't matter if it's the KOA report or one of your reports or Scott, you know, Karen Consulting's reports, it continues to grow, you know, triple digits each year. And this year, I think I don't even know it's the triple digits, it's at least at high double digits. You know, but there's a reason that the major hotel brands have gotten into the space as well. Hyatt Hilton and Marriott are all in the space, as well as Best Western just announced their best western hotel outdoor collection also. You know, Marriott is all in and the space, you know, 400 plus properties with the new Bonvoy outdoor collection, and it's evolving, right? It was, you know, first, and and Connor and I used to get into these discussions all the time about what is glamping, right? And you know, he would argue with me that what I had on my property at our Vernie Ranch RV was not glamping. I'm like, of course it is. Well, it's in an R V park, R V resort. How can it be glamping? I'm like, it's still glamping. Where, you know, first glamping was three yurts on the side of a cliff, right? You know, now it's in R V resorts. Now, I mean, it can be you know many different things, but where it's certainly evolving to are these larger, more amenitized outdoor hotels. And, you know, this is where institutional capital is starting to get involved in the space as well. And it'll be far more exposure, and Marriott will absolutely help with distribution. So it is not a trend. As all of the reports also show, not just in our industry, but also the co-star and the hotel industry, the upper upscale and the luxury pricing is outperforming currently, you know, the economy and lower pricing tiers of both the hospitality and outdoor hospitality. And glamping falls into that. And it's a different customer than the RV industry. So I dispute that myth. Yeah. Busted.

SPEAKER_02 11:29

We need like a breaking sound. People want nature, people want outdoors. And actually, I learned about the whole glamping when I was in the hotel industry working for a real estate investment trust. And what they they were, you know, we built tree houses out in Washington at a huge, huge hotel. It was a lodge, it was a resort. And that's when the, you know, I first saw the whole glamping on the Reed side. And the tree houses were a million dollars a tree house. I mean, it was a high end, and they're getting the money for it. And why? Because people want that nature, they want that outdoor. It's a permanent shift. It's not a trend at all. I'm just gonna make it short and clear.

SPEAKER_01 12:16

I think that's that's easily busted at this point. Time has told that story, and yeah, we just got hired for regional hotel groups clamping strategy as well.

SPEAKER_00 12:29

I just think that was the rock, Wendy.

Myth 3: Glamping Is Just a Trend

SPEAKER_01 12:32

Mike's got a little bit. I know he's got something for everything. Holding up anything here. That's great. All right, clamping is here to stay. Whether the term clamping stays or not is yet to be determined. There's a love, people have a love-hate relationship with it, but certainly outdoor lodging, landscape hotels, cabin resorts, all those kind of things, unique stays. Unique stays here to stay. All right, here's a good one. Put on your see if we can get a kazoo out of this. Outdoor hospitality is recession proof. That's a very relevant question for today.

SPEAKER_00 13:18

I don't believe that is true. I think we're certainly seeing indications of that now. However, we're going through, I think, probably one of the first cycles ever in the outdoor hospitality industry. You know, camping had been kind of puttering along for years until COVID came along and really exposed it to a broader market. And that generated the first real huge building of additional properties in decades really. And, you know, that added new supply. You know, everybody saw the demand for COVID all-time records, 2021, even 22. But, you know, we've certainly seen softening over the last couple of years. Now we see what's happening with the economy and tariffs and the drop in you know Canadian travel and gas prices. And you know, there are many banks that aren't even lending on ground up anymore, right? There are many companies that are pivoting back towards long-term and away from transient to insulate themselves against some of the transient loss. There are many campgrounds and resorts and parks that were overperformed and overbuilt during COVID that are now going back to the bank or missing their disker. And so part of it is it isn't just necessarily recession proof, but there's obviously industry headwinds and trends that you know we've got to muddy our way through some of this post-COVID cycle and understand what the new norm is and absorb the new supply. So I certainly think there's noise in that statement based on a first ever cycle, so to speak, you know, that the outdoor hospitality industry is really experiencing.

SPEAKER_02 14:45

I look at it two ways. So it's resistant, recession resistant. And if you look at the glamping, it's kind of like the luxury hotels, a lot of the glamping is. So, you know, I think that's that is going to get and is being hurt more than like the RV travelers. And when I say the RV, I'm also talking the campgrounds, not really RV resorts. So the campgrounds are still holding their own that that I can see, especially my clients are really starting to see a push in the summer. Our reason RV resorts are struggling a little bit because of the rate side. I say when I see it, I also see that people are trading down on sites. So instead of going a premium site, they're going to go into a back-end site, a lower, lower-rated site. So again, it's recession resistant in some segments, the way I look at it.

SPEAKER_01 15:41

Yeah, I agree. I think let's take it a step further and talk about a little more of the headwinds now, because you know, we've been dealing with the pullback in Canadian travel into the US and some markets. And now we have international forces at play and gas prices through the roof. So, you know, on the one hand, you know, you've got spirit airlines going out of business, you've got international flights being canceled. So some of this is good for domestic travel, but it's it's also you've also got gas prices here that are high. So people are gonna want to stay closer to home. Or are they gonna just want to save money altogether because everything feels so tough?

SPEAKER_00 16:28

Yeah, I don't mean to be doom and gloom, but I don't think we've seen the worst of it yet. You know, obviously, you know, these aren't the exact stats, but you know, US is something like uh, you know, the largest oil producer in the world, I think it's like 16 million barrels a day, but we're using 20 million a day. So that's obviously why we have to import. And so, you know, making our way through our reserves, and obviously with everything that's going off, you know, overseas and Strait of Hormuz and Venezuela, et cetera, et cetera, you know, once those reserves are depleted, you know, and if the Strait of Hormuz opens anytime soon, it's not like, you know, ta da. You know, that stuff's still got to get through the refinery, it's still got to, you know, come across the seat. So I think summer gas prices are gonna be astronomical, right? You know, we're looking at four, five, six bucks a gallon right now. We may look at seven, eight, nine, ten dollars a gallon. And, you know, what does that do? What does the trickle down do of transportation costs and shipping, you know, from things that we get imported? You know, you know, how does that change the cost model for these properties as well? So, and what not just the properties, but you know, cost of goods. And to your point, you know, what does that do to everybody's pocketbook? You know, does some of that discretionary travel, you know, go away? So, you know, we're insulating ourselves against what we think is an inevitability in the summer of a decline, but we'll we'll see.

SPEAKER_02 17:46

Yeah, my hope is people will just they will still travel, but they'll travel within 100 miles, right? So, you know, again, back to the RV resorts versus the campgrounds. So your RV resorts versus campgrounds. The campgrounds are gonna probably do better, and the national parks will do better. When I say national parks, I mean like Gulf State Park down in Florida. I think they're gonna people are gonna because they have their campers, right? So I think they're gonna do a lot better. Lamping again, luxury. What do you think?

SPEAKER_00 18:17

Oh well, hard hard to say though, because if you're and and yeah, who knows? Because if if you are a like to think about the hotel, you know, upper upscale and luxury, you know, a six, seven dollar, eight dollar gas price doesn't affect you as it does somebody who is making forty or fifty thousand a year, which is a lot of the campers, right? Because camper is an affordable activity. But if your you know gas price doubles or triples, it's already doubled, right? If it triples, do they have that you know ability to absorb that as much as you know? So I I don't know the answer to that. I think we're we're gonna we're probably in a first ever condition, right? So we'll we'll we'll we'll see.

SPEAKER_02 18:58

Well, I know when we were traveling back in 2020, you know, gas prices were high. They were, I mean, for a diesel pusher, they were at six to seven dollars a gallon, and you run four miles per gallon. So, you know, going across the country cost us thousands of dollars. So what we had to do is we were looking for campgrounds that were lower priced because we had to pay so much more. And it it it that whole summer was a tough summer. Was it 2020, 2021? I think it was. 2021.

Myth 4: Outdoor Hospitality is Recession-Proof

SPEAKER_01 19:33

That's exactly what I was gonna say. It just supports your point of guests looking for maybe the the more affordable options to make up for the gas money that they're having to spend. Yeah. All right. Well, good one. Thanks for the kazooing yourself, Mike. I think you did give a great answer. All right, moving on to the next one. About this one's about clamping. Glamping gas are just are just millennials chasing Instagram shots. That that's that's the primary target market for glamping.

SPEAKER_02 20:06

Well, you guys you guys have the data for that. I don't, but what I've seen is that most of the glamping gas I've seen is 45 to 65 years old. Now, I don't know if that's right or not, but they're not the Instagram grammars. Go ahead, Mike. Then you can because that's kind of what I've seen in the glamping side. Now, then you go to, you know, your your property in Arizona might be different.

SPEAKER_00 20:31

Well, I mean, Sherry, you probably have broader statistics, but I think the demographic is very diverse and it's leaning towards younger than older. You know, it's really the Gen X and the Millennial, you know, that are glamping now. And we hope the Gen Z gets into it with the experience, you know, portion of it. But no, it's not just the Instagrammable, it's families. It's people who have RV friends that also don't have an R V but want to go and experience. It's couples that, you know, want to get away and go to Sedona. It's it's a much more diverse group than just you know, Instagrammers.

SPEAKER_01 21:04

Yeah, I think having an Instagrammable property definitely helps, but millennials and gen X are the primary, primary customers. But yeah, the younger customer is growing and there's becoming more options for for families. And I think that there's a lot of different positioning that can happen between glamping offerings and that there's, you know, there's something for everybody. So absolutely a wide target market.

SPEAKER_02 21:34

So when I was working with Camp Margaritaville and also the Margaritaville Hotels and Resorts, we were, they did have Instagram moments. So they had the flip-flop that was their Instagram, everybody should would be shooting there. And the same thing they had at the Camp Margaritaville's. And what they did is I saw a lot of older folks taking pictures. When I say the 45, I shouldn't say older folks, but 45. But also the families. It was very big on the families.

Myth 5: Glamping Guests are all Millennials chasing Instagram Shots

SPEAKER_01 22:05

So a wide variety for sure. Okay. We are on to the next one. And I I'm pretty sure I wrote this question because it's a it's a common thing we're dealing with right now. If your project isn't penciling, just find ways to reduce construction costs to make it feasible. That's all you have to do. Or just reduce the number of just reduce the number of units so your construction costs go down.

SPEAKER_00 22:33

It depends on what you mean by isn't penciling. That can be true sometimes, right? You know, if it's not penciling because your basis is too high and you need to, you know, find another three or four million dollars to get your basis down, then maybe it does need to be done in phases. Maybe you don't need a 10,000 square foot clubhouse and you can do 5,000 square feet. Maybe you should start with 15 lamping units and not 40. So that's part one of the answer is that might be the case. Part two of the answer is you know, don't talk yourself into a project because you're emotionally tied or you know, let the data and facts do the talking for you. You know, sometimes gut and intuition, you know, certainly go into it. You know, but we're definitely a very facts and data-driven company. You you know, numbers have a hard time lying as long as they're you know accurate and and and you know good fundamentals behind them. But if the project doesn't pencil, be careful of you know making a swooping statement like that. But it could be true. It has been true in some cases, but it's be very careful. If your project doesn't pencil, it might not work.

SPEAKER_02 23:35

I look at like you should build 30 great sites instead of 60 mediocre ones. And I was just working with a client up north, and you know, we focused on the building 15 sites and we did it right. And now he's already almost full, running a$400 rate. And the main reason why is you've built the you know the 15 fabulous sites. He's going to another 15, so he's gonna be up to 30. So that's really what you want to do to me, and just don't reduce, just if you have to cut, you don't just don't cut in quality. Make it make it work.

Myth 6: I'll Just Find Ways to Reduce Construction Costs to Make it Feasible

SPEAKER_01 24:15

Hello, listeners. This is Sherry Halala, founder of Sage Outdoor Advisory. If you're launching an outdoor hospitality project like Lamping, we can help. We offer feasibility studies and appraisals. What that means is we look at your specific market and proposed business offering and complete an in-depth analysis to make sure that your planned business will be profitable. Getting a second opinion on your proposal and forecasted financials is critical to understand before you spend years of your time and hundreds of thousands of dollars. This is particularly important if you are looking to raise money for your project from a bank or private investors. They are going to want to see this type of deep dive analysis from an independent third-party specialist in the industry. We at Sage have completed well over 250 feasibility studies and appraisals in outdoor hospitality in North America in the last four years. So we understand what it takes to bring a project from concept to reality. If this sounds like it could be helpful to you, you can go to our website, SageOutdoorAdvisory.com, and schedule a call with our team. While you're there, check out our proprietary glamping database map too. Thanks. Now back to the show. Yeah, I think every situation is different, right? The trap that a lot of our clients fall into is they want to keep the same amenities, but reduce units to reduce the budget. And unfortunately, you need revenue generating units to cover the cost of your base infrastructure and amenities. So that's a common, a common kind of fallacy that doesn't work. The other thing is if you if you cut construction costs and you're taking out amenities that went into your revenue assumptions, or you're lowering the quality of your offering, then your revenue assumptions go down too. So it's a much, a much more complex model. The other thing that you should look at is, and that's what we help our clients with, is what's the ideal unit mix? What's the ROI on each unit type? And should we be, should we be adjusting that to maximize the ROI? And going through that exercise with a couple clients right now. It's also, you know, like you said, Wendy, though, you don't want to just take a hundred good size RV sites and redo your site plan to make them all small and at 90 degree angles so that you can fit more in to try to make the numbers work because that changes the revenue and viability of the project altogether, you know?

SPEAKER_00 26:40

Yeah, I mean, the hardest part is so many of these projects are passion projects. And when you have passion, you have emotion. And, you know, we do almost all of our underwriting. I think we've used you maybe twice, Sherry. And one of them was I sort of thought I knew the answer, but I wasn't sure. And you know, Connor, if you remember, we did that glamping only resort up on the rim. And you know, I was like, I think it can work, but and then you know the numbers came back and said it couldn't. And I was like, damn it. But it, you know, I wanted to do it, but but the numbers told me I I shouldn't. And that's so hard sometimes, you know, for a developer and owner to separate passion and emotion from fact. And and that that's where I think so much of this can get really get dangerous.

Myth 7: Pricing Should Stay Consistent Year-Round

SPEAKER_01 27:29

So it it is hard with these clients. We get called dream killers often. And it's tough to be in that in that in those shoes, but getting the right information is better than than being told a story that it's gonna work when it's gonna not, so you know what the risks are. And and some people push forward anyway anyway. And you know, some of it's more about a lifestyle than just the the ROI and what what what else you could do with that money. So all right, moving on. I know that I know that Wendy's got something to say about this, and so does Mike. Pricing should stay consistent year round.

SPEAKER_02 28:08

I know Mike's gonna say a lot, but I'll just I'll start it.

SPEAKER_01 28:11

It's easy, just set it and let it go.

SPEAKER_02 28:15

Yeah, yeah. That's I mean, that is this industry right now, is you know, people are starting to see what dynamic pricing is. And I've got so many owners out there that are like, oh, just set it and forget it, no big deal. And that's not the way you want to do it. You have to, you're leaving money on the table. Your weekend pricing should be different than your weekday pricing in most of the places. And it really depends on your location, right? But you should never set it and forget it. You've got peak weekends, you got holidays, you got event dates, you know, you've got shoulder season, you've got, you know, the your peak season. So consistent pricing is just not the way you want to go in that in that direction. Being in the hotel industry, and I know Mike's gonna get into this a little bit because this is his favorite topic. We've seen dynamic pricing for years and years, and and those who are new to it, I always go back to look at the airlines, look at not hotels. That's what you should be doing. You should be able to say when you have demand, you should increase your rate. Most of the systems will do that for you, and you can set it, and you can also do, you know, work on it. Now, what I've seen with like CRR has a revenue manager, which is great. There's other management companies who have revenue managers. That's what they need. And this is a new thing in the industry. It just used to be the set it and forget it, but now it's the hey, let's get into the revenue management, but it should never be consistent year-round. So, Mike, I'll give this to you. I knew you'd have something.

SPEAKER_00 29:57

So, you know, set it and forget it is absolutely not the case. Now, I know what you said about revenue manager, but certainly not every campground, not every property can afford it. But, you know, I remember six years ago, you know, we were talking to our manager at Bernie Grant when we first opened. And, you know, we were looking, this was right just in the heart of COVID, and you know, it was on October, and we're talking about March, like, wow, look at our oxygen. We're already at like 60% for March and we're six months out. We're gonna sell out. We should raise our rates. And she said to me, We can't. And I said, Well, what do you mean we can't? You know, I'd come from the hotel industry, and she's like, Well, you set your rates once a year and you print them, and that's it. And I'm like, Print them? She's like, Yeah, you put out your rate sheet, and like you can't change them. I'm like, says who? She's like, Well, that's just how everybody does it. I'm like, says who? Like, you're gonna sell out. Why can't you pivot? And that was kind of my first introduction into this industry of how you know, just antiquated they were on you know, seasonal pricing, demand pricing, you know, and revenue management techniques. Our vision statements to evolve the industry to the modern world. And we've been committed to that from the very beginning of helping to push the industry forward with revenue management and you know, teaching revenue management classes. And and, you know, it's interesting. I just came back from the Florida Alabama outdoor hospitality conference and expo and talked a little bit about it, but you know, also AI. And you know, there's so many different ways now that you can use AI to help you with revenue management and do comp shops and and you know, especially most properties, I would say 90% of the properties out there don't have access to a revenue manager. And the PMSs, you know, every single one of them now has dynamic pricing that you know a lot of the properties don't use. I I did a session a couple weeks ago at a different conference, and I you know asked, you know, you know, who knows their occupancy for the last year? And less than a quarter of the room raised their hand. And you know, how can you not know your occupancy? How do you know your you know your forecast? If you don't know your forecast, how do you know your cash flow to predict expenses? And you know, but if I had asked the question two years ago, it would have been eighth of the room, right? So it's just continued evolution and education as it becomes more of a commonplace thing. You know, only Camp Spot had dynamic pricing maybe two or three years ago, and now they all have it, right? And you know, it's just like the hotel industry, you know, if you think back to the motels that say color TV on their sign, right? And then everybody had color TV. Or if you think back to, I'm dating myself, you know, the first hotel that had a coffee maker. Now I'm like, oh my god, they have coffee. Now every hotel has a coffee maker or an iron. Now every hotel has an iron or the white linen. Now every hotel has white linen. And so the opto hospitality industry will continue to push forward revenue management and evolve. But no, please do not set your reads and forget it. Change them, look at them, evolve them, be dynamic, use the tools that you do have at your disposal, even if you don't have a revenue manager.

SPEAKER_02 32:40

And I think it's the one thing that oh, what? There you go. The one thing I noticed is that you just don't know what you don't know, right? And I know AI can really help a lot, which is great, but you don't, you know, I'm working with a client, actually, Mike, you gave it to me. It's somebody up in North Alabama that she's she just doesn't know what she doesn't know. Like, how do I even get started? What do I do? And that's where the the you know the camp spots, the new books can can definitely help. But there's also going to be like blogs and webinars and and you know trainings that are so important for the people who just don't know. And how do you how how how do I even look at my occupancy? What I do, and that's where your your PLS systems also can help.

SPEAKER_01 33:31

CR and what about monthly parks? Should their pricing vary throughout the year?

SPEAKER_02 33:39

Yes, they should. And the reason why is because you know you have seasonal, you have yearlies, and a lot of these year-round parks still need that. They still need to be able to increase. So if you look at your yearly rate, of course, but it should go up every year. Then you've got your seasonal, then you got your monthlies, then you got your snowboards that will stay for six months. And what do you the winter Texans for those Texans? I don't want to call them snowbirds, but you know, you do have to always look at your rates and you know, vary them and do displacement analysis like Mike has done be in the past.

SPEAKER_00 34:16

And it's not only that, you know, no one's 100% occupancy year-round, right? And if you are, then you need to raise your rates. But, you know, for those, especially long-term properties, even with annuals, if you aren't full, you know, take a look at what your demand is. There's just because you set, you know, this last, you know, customer signed this annual rate for this last site last week, it doesn't mean that you have to charge the exact same annual for the next customer that comes in. You know, you use the same revenue management and occupancy and demand factors and your pricing for your annual sites as well, based on what your availability and your demand is. So there's, you know, that is a very unusual tactic and something the industry hasn't done, something that we've been working on and pushing, you know, especially for the you know long-term RV parks, if you will. It's here's our annual rates, and everybody just signs it. Maybe maybe next year we'll go up 3%. But there's no reason to say that you know you can't change it for the next annual customer that comes in. So that's where I think revenue management needs to evolve for the long-term parks, if you will.

SPEAKER_01 35:12

Absolutely. I kazoo that as well.

Myth 8: It Runs Itself once it's Built

SPEAKER_00 35:16

All right, Wendy, how about the myth? It runs itself once it's built.

SPEAKER_02 35:20

A resort is a live operation. It it does not run itself. You know, you've got staff turnover, you've got deferred maintenance, you've got, you know, inconsistent guest experience. I mean, everything. It will not run itself once it's built. To me, it's you've got to get your SOPs in place. You have to have your onboarding in place, you have to make sure your daily operations, your, your, your standups, your communication is always there because it won't run itself. And if you think it does, you're gonna be in a load of a world of doo-doo.

SPEAKER_00 35:58

I mean, this is where we get a lot of our calls. You know, an investor came in and they thought it'd be easy. They're gonna do it themselves, and they realize they have no idea, you know, what they're doing. It isn't the same as multifamily or apartments, or you know, it's a live hospitality operation. And, you know, people check in and they check out. You got to do revenue management, you have to do payroll, you got to do accounting, you have to have you know cleanliness standards. And, you know, this is where we get most of our calls in this area of like, oops, I didn't realize how hard it was. You, you know, so no. Now, I definitely think there is some truth to that in the long-term world where it is far more streamlined. However, you know, all those same principles still apply. If you don't have SOPs, it can be a mess. You know, if you're not, you know, upholding your site standards and being maniacal about your quality and you know what that looks like, or you know, et cetera. But yes, myth busted again.

SPEAKER_02 36:47

You know, when I talk to the clients, I'm like, do you have SOPs in place? And everybody thinks, oh my God, SOPs is just a bad word. Well, it's really not. It's more just processes in place. And if I always say, if the owner it has to go to the bank, does somebody know how to react to a guest, good or bad, to have that guest experience? You know, can that park run without you? And that's where your systems come in place. That's where your onboarding comes in place, that's where your training comes in place, you know, and it yes, it can run smooth, but you have to have your systems.

Myth 9: Online Booking Platforms Handle all your Marketing

SPEAKER_01 37:22

Excellent. All right, how about this myth? Online booking platforms handle all your marketing. That's all you need.

SPEAKER_02 37:32

Go ahead, Mike.

SPEAKER_01 37:34

They're both shaking their heads.

SPEAKER_00 37:38

First of all, you're giving away 15, 20, 25% of your own pocketbook. Secondly, it's not true, right? I I mean, they'll distribute to a particular kind of customer, but the majority of customers aren't looking on the online platforms, the OTAs. You know, it's still a grassroots, you know, try and protect as many bookings on your own website as you can. And you've got to do marketing outside of that. You have to do prospecting. You know, we do a lot of grassroots sales and marketing. There's a difference between sales and marketing, right? Marketing is obviously bringing awareness to your brand. Sales is the actual direct contact of you know, booking those reservations. And so again, another misnomer where folks think, oh, we'll just put it on and and you know, I mean, O'Nara is a great example, you know, Ben Wolfe's brand of you know how they were struggling and only on one platform, you know, being relying on the OTAs to distribute and how they were able to turn that around to you know triple their brand value, you know, in another way.

SPEAKER_01 38:34

No, I was gonna say, what about if you're a KOA franchise or you're part of Marriott's outdoor bonvoy collection someday and you're using their platform? Do you still need marketing?

SPEAKER_00 38:47

Absolutely, because they're only doing brand marketing and national branding. You still need to do local marketing. You know, they're never gonna touch your construction workers that you know at the using, you gotta go visit the solar farm, right? You know, the battery plant and talk to those customers, right? You gotta make sure that you're in the local chambers and the you know, the visitors bureau. And so so they have nothing to do with that, you know, piece of the of the puzzle.

SPEAKER_02 39:10

Yeah, and you know, I look at it and I see a lot of our customers nowadays, their website is just not really good. And that's where you need to get your your website up to speed because you can't, when Mike says the 15 to 25%, that's a lot of money on your booking. So why not get the direct booking and focus on the book, the direct booking? Because that's where your margin lives. I mean, you think about it, it's the direct booking. Look at the you look at the hotel industry, though I'm sure we're gonna be moving too soon, is the OTAs have to have the rate parity. So you have to have the right rates. You can't be lower on the on the OTAs, and that's because your the the brands and everybody wants all the bookings to come direct through you instead of through the OTAs. They help a little bit, but not for that big of a percentage.

Myth 10: Five-Star Reviews Mean You're Doing Everything Right

SPEAKER_01 40:08

Yeah. Makes sense. All right, I'm gonna skip ahead. We've got two more myths we're gonna bust. And the next one is five-star reviews mean you means you're doing everything right. So holy grail, just keep doing what you're doing.

SPEAKER_02 40:25

Go ahead, Mike. The holy grail.

SPEAKER_00 40:29

Well, it's certainly helpful. I mean, obviously, it's the first glance that a customer has into your business if you're 3.7 versus a 4.8 on Google, you know, it's absolutely going to help you know drive business and decision. But clearly it's only one indicator, right? It's only one KPI of the puzzle. You know, it there's no such thing as 100% guest satisfaction. You know, I used to use this example in the hotel world, you know, even the top-rated marriage at 95, 96%. You know, if you have you know 10,000 surveys over the course of a year, you know, that still means that 500 weren't, right? There's no such thing as perfection, right? It's excellence. And excellence is the quest for perfection, right? You know, how do you always get better? How do you always improve? Good is not good enough. And, you know, you know, it might be some particular guest sentiment, but it's not all the guest sentiment. You know, many properties don't have more than 100 or 200 reviews, but have obviously had thousands, hundreds of thousands of campers. It also is only an indication of the guest sentiment. It doesn't mean that your operations are clean, meaning uh smooth. It doesn't mean that you're hitting all your revenue components. So certainly one KPI, but but not the whole, not the whole pie.

SPEAKER_02 41:33

And I'm gonna expand a little bit because the one thing that I've noticed the most is that we don't focus enough on that three and four star review. So, oh yeah, you can be five star, but if you get a three or four, nobody's really looking at it and diving into that. And that's what's really important is that that even though it's a five-star review, that that that's great. No the properties aren't and but should be looking at that three and four-star review. Another KPI that's really good, that secret shopping. You know, you look at okay, five-star review means you're doing everything right. No, it could be, but then you got your KPI's secret shopping. Mystery guest program is awesome. Operational audits. I don't see a lot of those out there that I've been starting to build because the operational audits are so important. But we actually did secret shopping for Margaritaville, Camp Margaritaville. So we went all over the the country with their properties and did secret shopping and it showed a lot. Showed definitely a lot. So yeah, maybe it's it can't be everything right because you never know what happens out there.

SPEAKER_01 42:45

So secret shopping is is you staying as a guest without revealing who you are.

SPEAKER_02 42:50

That is correct. That is correct.

Myth or Not a Myth, That is the Question: It's Easier to Run a Small Resort than a Large One

SPEAKER_01 42:53

Got it. Fabulous. Well, we're down to our final myth, and that myth is it's easier to run a small resort than a large resort. You can interpret easier however you'd like.

SPEAKER_00 43:16

Yes and no and no and yes. They're both very different. In general, sometimes there's less complexity to a small park or a small resort, but it also means less staff, you know. So if your manager leaves and there's only one other person on the team and you're an owner, you know, or even a management company, what do you do? Right, you know, to backfill and to provide that support is far more burdensome than if you have, you know, staff of eight or ten or twelve or fourteen or twenty or thirty. You know, so you know, there there is absolutely less complexity, you know. So communication is simpler, you know, in general the business is simpler, but you know, it's also easier to muck up because there's very few you know levels of. Of staffing. A large resort, yes to know. On the flip side, far more complex, right? You know, is the accounting, revenue management, or all the different outlets set up properly, different site types, you know, there's a lot more to clean and to look at and to maintain. You know, do you have talented staff, staff that are capable of doing the job? You know, there's a lot more at stake in terms of revenue. At the same time, on the smaller park, if you mess it up, there is very little revenue, very little NOI. You know, so every dollar matters. You know, so uh that's an it depends answer. So I don't know if that myth is busted or or upheld, or you know, maybe it's neutral.

SPEAKER_01 44:37

I think it's fair that we don't bust all of them necessarily. Yeah.

SPEAKER_02 44:40

And I I I have nothing to say on that one. I mean, that's exactly it, what Mike said. You know, smaller resorts have less marger for margin for error, but you know, it just depends. It really, really depends. So we can't really bust that one. There you go. Final last one.

SPEAKER_01 44:56

Well, speaking of margins, I'll I'll do a follow-up question to that then. Which is more profitable? Smaller or larger? Probably have a similar answer.

SPEAKER_02 45:07

It depends. It really depends. You know, it depends on your amenities, it depends on what you have, it depends on your staffing, it depends on your rate, depends on your location.

SPEAKER_00 45:20

And profitable, you know, how are you defining profit? Right. If it's if it's margin, right, in general, a smaller resort is going to have a higher margin, less costs, right? 50, 55%, maybe 60%, even if especially if it's a long term, you know, where a larger resort, because maybe you have food and beverage, you have other ancillary fees, that might be 40%, 45%. However, dollar-wise, a larger resort, unless it's a disaster, a larger resort is always going to be more profitable because you have more dollars. You know, so it's it's an it depends answer and kind of what number are you measuring. But I'm always very careful to answer that, you know, when somebody asks me to build a model or you know, we on that exact question because it's there is not one size fits all, and every property is different. You know, it's such a, you know, you know, like from a hotel standpoint, right? If somebody builds a courtyard, it's a very courtyard by Marriott, a hotel, it's a very predictable model. You know, in general, you have very little landscaping, you know there's a utility cost per room, you know what your housekeeping cost is. But you know, you could have a 50-site RV property that could be on five acres or it could be on 50 acres. And, you know, what is your utility cost, landscape maintenance management cost on five acres versus 50? It could be astronomically different. So there's so many different factors that play into this industry because of the uniqueness of every single property that every single property needs to be looked at, you know, independently and differently. There are some guidelines, sure. And you guys use your guidelines when you build your models, of course, but there has to be some variability based on you know particular property unique features.

What Is Next And How To Reach Mike and Wendy

SPEAKER_01 46:54

Yeah, I I agree. I think that you know, we get asked that that magic unit count question all the time. And, you know, depending on what the vision is and the the experience, the target experience is, there will be a minimum number of units that it's going to take. If you don't have enough revenge revenue generating units to cover the amenities and the experience you want to offer, then yeah, a small, if you say smaller in unit count, that could be less less profitable. It does, like you said, make it harder to staff. And it depends on if you're looking to live there as an operator and live and own it and operate it yourself, then there's a lot more flexibility with fewer units. But if your goal is to hire an operator and your goal is to eventually sell it, then it becomes a little bit different equation and the unit counts tend to get bigger as well as the minimum revenue. So great. Well, good job, myth busting team. I wanted to that concludes our myth busting. I want to ask both of you, Wendy and Mike, what's next for you and what are you focused on? And then please, please let us know where people can reach you. I I want to personally say I've done work with both Mike and Wendy, and they are true professionals and the best at what they do in the industry. So don't hesitate to reach out to them. But yeah, tell me a little bit about what you're what you're working on and what you see and how people can reach you.

SPEAKER_02 48:36

Go ahead, Mike. We'll let you talk first.

SPEAKER_00 48:41

We continue to evolve our brand. You know, we are hunting for additional third-party management contracts. So growing CRR, you know, in that venue. You know, we're absolutely hunting for the glamping, you know, where the hotel crossover is. We're an approved Marriott manager as well. We also continue to buttress the industry. You know, I've spoken at the last four conferences so far this year, and then I'll be at the Arizona OHA conference, but then OHI Connect. Then I'll be actually the Marriott Conference for the first time in six years. I want to see what they're talking about at the outdoor Bonvoy Collection. And then, you know, the glamping and the outdoor hospitality conference expo, you know, we'll be speaking at uh certainly the expo. But you know, continuing to to support and buttress the industry is is also what we're working on. You can find me www.crrhospitality.com, any of our social channels, LinkedIn, Facebook, Instagram, or you can always shoot me an email. My face is is around.

SPEAKER_01 49:36

Yes, it is. Thanks, Mike. Wendy.

SPEAKER_02 49:40

Well, I am actually doing so much. Right now I'm asset managing for a one single park and helping them develop budgets and helping them do SOPs and and onboarding documents. And I'm actually working with Mike right now doing some HR stuff, helping him roll out a couple of marketing tools and HR tools. And, you know, the one thing I look at is I'm that all of a, like I said at the beginning of the all-around chameleon, doing a lot of revenue management too. And when I do, when I say that it's more training how to do a revenue management than how to do it myself. A lot of our owners out there don't know. And I'm more of the training of how to, I'll be teaching you how to do it. And then I get to go away, and then I'll go and anything you need help with is basically what I'm there for. You can get a hold of me at www.hospitalityacross America. And I'm also on LinkedIn, Facebook. It's all under Hospitality Across America, or my name, Wendy Heineke.

SPEAKER_01 50:48

Which I just learned from you when we were in North Carolina is Heineken without the N.

unknown 50:53

Yeah.

SPEAKER_02 50:54

That's exactly it. So you're drinking the Heineken, think of me.

SPEAKER_01 51:00

Well, thank you both. This has been very, very educational, I'm sure, for our listeners. It's always good to hear your thoughts, and I appreciate your time on the podcast today.

SPEAKER_00 51:11

Our pleasure. Thanks for having us.

SPEAKER_02 51:13

Yeah, thank you so much. Really appreciate it.