‘Great Outdoor Cottages’ Seeing Growth in PMRV Segment – RVBusiness – Breaking RV Industry News

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The COVID-19 pandemic not only created unprecedented demand for towable and motorized RVs but park model RVs too, which campgrounds have been using as rental accommodations over the past couple of decades.

The unprecedented demand for park models was frustrating for campground and RV resort developers during the COVID pandemic, however, as delivery times for new park models grew from several months to a year or more, depending on the manufacturer.

The delays in obtaining new park models were particularly frustrating for Ocean City, Md.-based Blue Water Development Corp., which not only builds new resorts from the ground up but transforms existing campgrounds and RV parks into highly sought-after vacation destinations, which it manages both for itself and on behalf of other investors.

Great Outdoor Cottages
Blue Water Development Corp. created Great Outdoor Cottages out of necessity during the pandemic so that it could get the PMRVs it needed to continue expanding.

But rather than put its development plans on hold and simply wait for the nation’s existing park model manufacturers to provide units for its properties, Blue Water took a different approach: It launched its own park model production company, Great Outdoor Cottages, LLC as an independent, free-standing sister company of Blue Water.

Established in Georgetown, Del. in 2021, Great Outdoor Cottages has not only produced high-quality park models for Blue Water but also provided growing numbers of park models for the largest campground and RV resort operators in the private park industry, including Chicago-based Equity LifeStyle Properties, Inc., Southfield, Mich.-based Sun Communities, Inc. and Billings, Mont.-based Kampgrounds of America, Inc. (KOA).

Great Outdoor Cottages has been successful so far, growing its annual production from 350 park models in 2022 to nearly 500 units this year, according to Matthew Kraeuter, the company’s CEO.

Blue Water purchased about 200 park models or roughly two-thirds of Great Outdoor Cottages’ production in 2022, but Blue Water’s share of the company’s park model sales has declined to about 20% as the Ocean City park operator and developer catches up with its own park model needs. There continues to be a great deal of park model demand from other park operators, however, which is fueling continued sales growth for Great Outdoor Cottages.

“There was a lot of built-up demand for park models,” Kraeuter told Woodall’s Campground Magazine (WCM), adding that Great Outdoor Cottages’ nearly 100 employees can build as many as three or four park models a day at the company’s 45,000-square foot factory in Georgetown. Plans are also in the works to add another 20,000 square feet of manufacturing space, which will further increase Great Outdoor Cottages’ production capacity.

Kraeuter said the company’s park models are among the highest quality park models available and have a residential look and feel. Great Outdoor Cottages also designs and builds floating park models, 28 of which have been installed at Bluefin Bungalows and Marina, a Blue Water resort in Chincoteague, Va.

Great Outdoor Cottages is also seeing strong demand from consumers who want to purchase their own park models and use them as affordable vacation cottages by placing them on leased sites in RV parks and resorts where it’s too expensive to purchase a vacation home.

“We’re selling park models through a large dealer network to individual end users,” Kraeuter said, adding that many consumers can afford to pay $150,000 for a park model they could place on a leased campsite in a campground, RV park or resort in a resort area.

Great Outdoor Cottages
Great Outdoor Cottages continues to see more orders come in as it increases its production of PMRVs.

Purchasing a site-built home in a resort area, on the other hand, is simply untenable for most people.

“To get anywhere close to the beach, you’d have to spend upwards of a million dollars or more,” Kraeuter said, adding, “People are discovering park models again as a way to get around high real estate prices.”

Kraeuter estimates that as much as 60% of Great Outdoor Cottages’ sales this year will be to park model “retail dealers,” who sell their units directly to consumers. He added that RV parks and resorts in the eastern part of the country appear to have plenty of capacity for new park models that are privately owned.

Institutional investors, such as Sun Communities, have also indicated in recent earnings calls with analysts that they anticipate more conversions of existing campsites to annual sites, which means changing the use of the site to accommodate a park model.

Great Outdoor Cottages is further diversifying its business base by producing modular homes for affordable housing communities.

“(Building modular homes as affordable housing) is one of our big initiatives. It’s my new passion in life,” said Todd Burbage, Blue Water’s CEO. “This is a huge opportunity. Affordable workforce housing is non-existent anymore. So we’re helping communities by building housing I would live in for $100,000 to $125,000. We don’t have the ability to solve the homelessness problem, but we can give kids out of college, teachers and first responders a place to start. These modular homes can help people break out of the cycle of renting for the rest of their lives.”

Great Outdoor Cottages’ modular home production has grown from just a handful of units in 2023 to an anticipated 100 units this year. Great Outdoor Cottages and Burbage are exploring areas located near resort communities where housing costs have continued to increase and other areas with little to no affordable housing inventory.

Burbage said he anticipates that Great Outdoor Cottages will continue to grow as demand increases for its park models and modular units. But rather than expand by acquiring other park model companies, Burbage expects Great Outdoor Cottages to grow organically by expanding its production capabilities and opening new factories to serve the hottest markets, most likely in the South and in the Texas area, where it’s easier to build with fewer roadblocks from cities and counties.

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