Why Revenue Management Matters for Campgrounds

What is Revenue Management for Campgrounds?

Here at Campspot, we frequently mention the revenue we drive for our partners through our smart software. However, we understand that when the words ‘revenue management’ are said out loud, they tend to conjure up a maze of financial figures that usually end up in the lap of the park’s accountant.

Don’t tune out! Because in practice, revenue management can make an enormous difference for the profitability of your campground. So, let’s decode what revenue management actually is by reducing the term to two simple rules:
First, pay attention to how much money you’re making. Second, do what you can to maximize that amount by selling the right campsite to the right guest at the right time.

Although it’s sometimes confused for dynamic pricing (learn more about that here), revenue management is the mindset that some reservations are better for your business than others. This mindset allows park owners and managers to make smart decisions based on data, rather than assumptions, to maximize their incoming revenue. While this concept can stretch far beyond individual tactics or reservation revenue, those are the areas where we will focus our attention.

4 Reasons Why Parks Should Carefully Consider Revenue



1. In the hospitality industry, inventory is perishable.

Your biggest asset as a campground is the number of nights you have available for booking. This number is perishable, meaning that if you don’t sell a site night, you’ll never get the opportunity to make that money back. The more site nights that go unbooked, the more waste you’re creating in what should be your main revenue stream.

2. Variable costs are generally low.

While fixed costs (insurance, mortgages, property taxes) may be high for campgrounds, there are relatively few costs associated with renting out a tent or RV site in comparison to other forms of lodging. Whereas hotels have to pay for their buildings, routine maintenance, expensive HVAC equipment, and large housekeeping teams, many parks are solely paying for the utility costs of a short term rental for an RV or tent space. Simply put, campground owners are more likely to cover their costs and create profit by offering a discount to confidently fill a site rather than keeping it open and waiting for the possibility of a full price booking.

3. Not every reservation is equal.

As an example, let’s take the common practice of setting a three-night minimum over a holiday weekend. That three-night stay, if booked six months in advance, might be preventing a different guest’s stay who would have booked for a week or more. Because that park didn’t sell the spot to the right guest at the right time, this campground lost an extra 4+ days of a reservation.

4. Ancillary revenue can be your best friend.

Do you have other ways of driving revenue outside of your reservations? If so, how much money are your guests spending while they’re on your property? Carefully track this and look for opportunities to encourage ancillary purchases, such as firewood or ice cream. While you may not recoup all of your costs on your booked sites, you could make a considerable profit on the additional goods your guests purchase; thereby making it worthwhile to fill some sites at lower prices.


How to Put Revenue Management Tactics Into Practice

The standard ways of pricing, hosting, operating, and interacting with guests are not the same as they were five to ten years ago. Your policies and revenue management strategies should also change with the times. For instance, the three-night minimum stay strategy we mentioned above could be improved by tiering your minimum night stay rules. Start 6+ months out in advance with a one-week minimum; and as the date of stay approaches, shorten that minimum to bring in the reservations needed to fill your grid. Additionally, you may consider other novel ways to drive income, such as charging more for better amenities, finding cost-effective utilities, or investing in add-on rentals like hammocks and golf carts. By rethinking absolute rules, you can expand the possibilities for guests and your bottom line.

Take Advantage of Growth Opportunities with Campspot

Unfortunately, there isn’t a one-size-fits-all solution for campground revenue management. Your park has unique advantages and challenges to explore. Your revenue management strategy is a sliding scale that improves with the amount of effort you put into it. Therefore, if you mentally prioritize revenue management and use the tools available to you, you’re starting off strong.
Our Campspot software is a great place to start because it includes dynamic pricing, site locking, automatic grid optimization, custom rules for booking online, easy package and promo code creation, variable minimum night stays, heat map and forecast reporting, and much more.

Heat map reporting within Campspot

If you’re interested in learning more about any of these integrated features or have more questions about revenue management, email sales@campspot.com — we’d love to help!

The Guiding Principles of Online Reservation Systems

How you take and manage reservations is one of the most important decisions you make as a campground owner.

We here at Campspot may be biased, but your chosen reservation system impacts your business at its core. How many people are coming? How are they contacting you? How much money does this bring in? How are you taking and tracking this money? This list goes on, as do the options for how you initially communicate with your guests and manage this information.

There are phone reservations, online bookings, email inquiries, website forms, in-person inquiries, third-party marketing websites, campground memberships, and more. As the world gets more digital and more complicated, managing all of this can seem overwhelming.

However, modern technology has entered the game to help in the form of online reservation systems. Slowly but surely, they are taking over the tried and true methods of yesteryear – binders, post-it notes, Excel spreadsheets, physical calendars for each site, etc. You name it, we’ve probably seen it.

For those new to the industry or new to the idea of reservation systems, we want to share a few of the guiding principles. First and foremost, The Golden Rule…



Not all reservations (or reservation systems) are created equal.

At first glance, you might think something along the lines of “A two-night stay is a two-night stay.” However, the difference in context can be immense.

For example, a two-night stay booked months in advance for a holiday weekend could block a space that another guest may have booked for a week — costing you five nights worth of revenue. Conversely, a two-night stay might be a last-minute booking that fits perfectly between two other reservations and maximizes the amount of money you make during that time.

One of these is a good reservation, the other is a bad reservation, and the question is this: How can your reservation system decide between the two?

A quality online reservation system like Campspot can take a lot of the pain out of this process. By using grid optimization to fill your park as much as possible as well as following business rules that you set for things like minimum stays and holiday weekend policies, your reservation software can help you generate revenue and manage a smarter campground.

Online reservations are more than a convenience.

The world today is online, but for a multitude of reasons, camping has been one of the last industries to adopt online reservations – lagging behind hotels, car rentals, airlines, and even restaurants. For campground owners, online reservations are now a must. They are no longer simply a convenience; they are potentially your biggest source of business and your biggest competitive advantage in the digital economy.

According to the 2019 KOA camping report, 78% of campers are now generation X or younger – people who were either born or raised in the digital generation, and people who expect the accessibility and ease of doing everything online. If you don’t cater to this audience’s preferences, you will lose three out of four customers to a campground that does. For campgrounds that joined Campspot and previously did not take online reservations, their revenue increased by upwards of 55% year-over-year.

Simply put, online booking for your campground is a MUST. And while it can be a significant business decision, it can also be so much more than a chore. Taking your park management system online is a pathway to new and bigger markets that you wouldn’t tap into otherwise, and when done correctly, the results can be immense.