RV parks have traditionally been considered a lifestyle business, but recent data shows they’re part of an industry with substantial returns.
In 2019, Condor conducted a study finding that 40 million Americans go RVing on a regular basis. And with that, last year Statista said that the campground industry reached $8.73 billion in 2020, making it one of the few industries that saw growth during the pandemic.
The outdoor industry is definitely thriving. But just how profitable is it to own a campground?
To answer this question, we collected data and gathered insight from campground owners. Here’s what we found.
How much do campground owners make?
According to Outdoor Command, park operators with a modest amount of reservations (50 sites at 50% capacity throughout the year) could make over $273K a year (before expenses) if they charged $30 a night.
To put it in more tangible terms, Go Downsize says that campground owners “usually generate about 10 to 30% of returns on their investment,” and Cypress Trail RV Resort quoted the ROI of owning a campground to be around 15% to 20%.
When you compare that to the fact that residential real estate and stocks yield 10% and 7%, respectively (Cypress Trail), the market certainly favors park owners.
There are still a lot of costs to factor, but even conservative numbers indicate that campground owners can expect to net 10% to 15% of their park’s revenue.
Costs to consider
To get a clearer idea of whether or not a campground is a good investment, as well as how much you’ll actually be able to take home, make sure to factor in your costs.
Here are a few big ticket costs to consider:
- Buying an established campgrounds: $100,000 to $2 million (Truic)
- Startup costs for the business: $10,000 to $50,000 (Outdoor Command)
- Cap rates: 8% to 11% (RVParkStore)
- Insurance: $450 to $1,500 per year for $1 million in general liability coverage (Truic)
- Renovations: $10,000 to $50,000 (Outdoor Command)
- High-speed internet ($250 to $500 a month, plus around $3,000 for installation (For more info see our best practices for setting up WiFi at your campground)
While each park is unique, there are still a few steps you can take to “hedge your bets,” and increase the profitability of your park.
Take online reservations.
Parks that use Campground Booking for online bookings benefit from an average 25% increase in reservations, making them even more profitable.
In addition to our online system, our parks also have access to our channel partners, including Outdoorsy, GoRVing Canada, Travel BC, and the CCRVC. This means that just by using online reservations with us, our campgrounds are bookable on any of our partner websites. Through our channel partners, our campgrounds have seen an additional 2 million views on their websites, annually.
Offer unique experiences.
A number of our campgrounds have found unique ways to monetize their parks other than just offering RV slips for overnight and seasonal stays.
If you’re looking for creative financial solutions for your park, consider:
- Investing in the amenities that guests want, including WiFi, trees, and showers.
- Providing unique accommodations, such as tiny homes, yurts, and treehouses.
- Offering creative activities like outdoor movie nights, tournaments for sports, or holiday light trails.
- Double your property for other business uses, such as a brewery, wedding venue, or even a zoo.
- Reward camper loyalty by offering discounts and credit for referrals, early registration, repeat stays, writing a review, and joining loyalty programs.
Collect online reviews.
According to Forbes, “97% of consumers use the internet to find local businesses,” so what your guests say about your park carries a lot of weight. To ensure steady business at your campground pay attention to these review sites:
Join a campground association.
Campground associations exist to serve the needs of campground owners. Whether it’s offering marketing resources and solutions, advocacy at a local and national level, or just creating a network of campground owners in your region, having an association in your corner makes running your park a lot easier.
See our post on “why you should join a campground association” for more tips as well as a list of more than 40 associations in the US and Canada.
Making a Profit
So, is it profitable to own a campground?
According to data and our parks, absolutely.
But to know clue in as to how profitable, park owners can expect to see at least a 10% to 15% annual ROI at a minimum even after costs. However, you increase the profitability of your campground substantially, if you take reservations online, offer unique experiences, collect online reviews, and join a campground association.
Want to guarantee success in your first year? Campground Booking brings RV parks a 25% increase in reservation volume. Request a demo today!