KOA Officials Highlight Growth at International Convention

RV Business

Toby O’Rourke, KOA’s president and CEO, speaks during the Opening General Session.

During the Opening General Session this morning (Nov. 15) at Kampgrounds of America Inc.’s (KOA) International Convention in Orlando, Fla., Toby O’Rourke, president and CEO of the company, along with other key company officials, spoke about the growth of KOA, challenges that lie ahead and more.

Oscar Tang, KOA’s owner, and Jim Rodgers, the company’s former president and CEO, were in attendance as the system celebrates 60 years in 2022.

Below are some highlights of the presentations.

KOA Continues to Lead

Amidst the backdrop of the COVID pandemic, O’Rourke said that the KOA system as a whole has seen a surge of new owners entering the system, with 41 new owners taking over parks in 2022 on top of the 48 new owners that moved into the system last year.

“We expect to have 15 more park conversions completed by the end of the year,” O’Rourke noted. “We also have six new build contracts being signed and currently have 27 KOAs in the development stage.”

Over the past 10 years, she highlighted that growth has been substantial for the KOA system. The system is expected to reach $500 million in registration revenue by the end of 2022.

“That is up 2.2% over 2021 and up 34% versus 2019,” O’Rourke explained. “Since 2011, registration revenue is up 176%.”

She mentioned that camper nights were down 7% this past year and that 76% of KOA’s parks had lower camper nights, but also pointed out the impact that COVID has had on the industry as a whole.

“COVID was an outlier and we have normalized to this new, higher level,” O’Rourke noted. “This year is a new benchmark that we will use as we look at future growth.”

O’Rourke said that KOA is embracing the idea that it is a 60-year-old startup.

“We need to have that mentality. We can’t just sit back and expect all of this success to come to us,” she explained.

O’Rourke encouraged park owners to harness the energy in the industry right now and grow their parks.

“Accept the challenge and think big,” she said. “You need to look at what your business looks like five to 10 years down the road and then wind that back and use that lens to make your vision a reality. Ask questions and be curious.”

O’Rourke noted that startups:

Work to improve every aspect of their business.
Work to create high-performing teams.
Embrace change and adapt to change.
Are mission-driven.
Understand the marketplace and conditions.
Keep an eye on the competition.

How Economic Headwinds May Impact KOA

Chris Scheer, KOA’s CFO, gave attendees an update on economic conditions.

Chris Scheer, KOA’s CFO, who started right before the COVID pandemic, gave attendees a look at economic headwinds that may impact their businesses.

He highlighted that inflation is up 7.7% from over a year ago, but down from a high of 9.1% in June. “That is the highest growth rate for inflation in 40 years,” Scheer explained. “Things are just more expensive.”

He noted the that unemployment peaked at 15% during the pandemic and then dropped to 3.5%. “It has been hard to find employees,” Scheer said. “There are two job openings for every person that is unemployed right now.”

Interest rates have also continued to increase, now up 4.25% in 2022, and other expenses like payroll, utilities, property taxes and debt may go up in 2023.

But, Scheer noted that the camping industry is primed for even more growth during an economic downturn.

“Sixty-two percent of households view camping as a more viable option during a down economy,” he said.

Some other key stats he pointed out:

34% are replacing a trip with a camping trip.
KOA is 7.6% up on occupancy nights vs. 2019
KOA currently is seeing an increase of 7.2% in advanced deposits vs. 2021.

Scheer encouraged attendees to continue to invest in their parks and look at rate/revenue management solutions.

“KOA’s rate growth is up 9.5% vs. 2021, which is keeping up with inflation,” he said.

Scheer also highlighted that now is a great time to build a park.

“There are currently three times the number of KOAs under construction vs. prior years,” he explained.

Whitney Scott, KOA’s chief marketing officer, highlighted the tight competition KOA is facing to attract campers.

Keeping KOA’s Marketing Edge

Whitney Scott, KOA’s chief marketing officer, noted that competition has increased for the eyeballs of campers. She highlighted that other brands, like Camp Margaritaville RV Resorts, have come into the sector and are expanding rapidly.

“They understand the importance of leaning on a brand,” she explained. “We are not the only ones doing this.”

Scott also pointed out companies like Hipcamp that have come in as startups and are filling gaps in what consumers are looking for. Hipcamp has raised over $200 million over seven funding rounds since its launch.

“They aren’t focused on a return on investment yet because they are a startup,” noted Scott. “Most of their money is going toward advertising because their investors want to see customers. That impacts us all the way from single reservations to brand awareness.”

Scott said that as long as KOA continues to focus on the customer first it will continue to come out on top.

She highlighted five startup mentalities to competition:

Specialization: “Rivalry challenges us to find niche areas and strengthen our expertise, which is understanding the market and building to our guests.”

Increased Visibility: “Advertisor spending can actually help grow the need for camping and other companies can help push campers into our parks. Harvest Hosts is an example. Sometimes people can’t find a winery in a certain area to stay at, so they will look at our parks in those areas too.”

Brand Matters: “In the startup world, brand is the most important asset. Brand is the relationship driver and we have a 60-year-old brand with a high reputation for quality.”

Embrace Failure: “Startups look for it. Understanding and taking risk, and being able to learn from it is part of being an entrepreneur. Find the gaps, make improvements and take the risks.”

Out of the Comfort Zone: “Competition forces us to be nimble and demands the very best. Be aggressive and move forward.”

More Session Highlights

Diane Echler, KOA’s vice president of marketing, told attendees that the KOA brand saw 16 billion impressions in 2022 due to its marketing efforts, which included social media promotions, magazine articles, TV interviews, partnerships and more.

“For every $1 we spent on digital advertising, we saw $31 in registration revenue,” she explained.

On the KOA.com side, there were 19 million KOA.com users in 2022, 1.5 million reservations through the KOA.com system, $295 million worth of registration revenues through the KOA.com system and 71% of all reservations came through KOA.com.

The KOA app also saw significant growth, with an 8.1% YoY growth in revenue and an 18.8% increase in app installations.

What is new?

Multi-reservation booking, which allows guest to book multiple parks or trips all at once. Echler noted that one guest booked 22 stops all at once.

“This is something a lot of hotels don’t have, but we felt it was necessary because of the nature of camping,” she explained.

KOA is also looking to redesign KOA.com and may include interactive site maps, an improved reservation flow and more, noted Echler.

KOA has also formed new partnerships with Progressive Insurance and Holo Footwear, which has designed a new KOA-branded shoe that will be available through retail locations and at campstores.

Finally, KOA is preparing to launch a pilot of its new Internship Program, which will give individuals an opportunity to complete an internship at KOA parks. The pilot program is set to launch next May and wrap up in August.

After that, KOA officials will take a look at feedback and hopefully launch the program system-wide in 2024.

The program is designed to get people interested in careers at KOA parks.

Source: https://rvbusiness.com/koa-officials-highlight-growth-challenges-at-international-convention/