Campground Market Analysis

Campground Market Analysis

Developing a business plan for an existing business or conducting a feasibility study for a new venture
requires a thorough analysis of market conditions. Market conditions have a significant impact on your
campground’s profitability. The strength of local tourism activity affects how many sites you can sell and
the rates that you can charge. This guidebook will help you analyze your market so that you can gauge
your operation’s potential and make more informed operating and investment decisions.

The following pages include a series of checklists to help you collect and analyze information as part of
your campground market analysis. The checklists, tailored to the campground industry, will help you
understand the many market factors that impact upon profitability. Information collected in your analysis
is then used to predict future occupancy levels and rates.

Types of Questions Answered

A market analysis will help you answer questions such as:

• What trends are occurring in the campground industry?
• How strong is local tourism activity?
• Who are my competitors and are they successful?
• What are the strengths and weaknesses of my location?
• What occupancy percentage and rates could I realistically achieve?

Applications

This guidebook is designed to provide you with an
industry-specific market analysis format that can be used
Market Analysis Components
in a feasibility study, business plan or marketing plan. It

can also be used to analyze the market potential of an
• Industry Trends
existing campground, an expansion or a new
• Location and Facility
development.
• Area Characteristics

• Competition
Existing operators can use a market analysis to identify
• Knowing Your Customer
opportunities to improve sales. The analysis can provide
• Projecting Sales
valuable information on market conditions to help in
forecasting and budgeting. It also provides a foundation
for an effective marketing plan.

Prospective operators can utilize a market analysis to project sales volume for a campground. Through a
careful market analysis, the campground operator is provided with essential information required by a
business plan or feasibility study, and alerted to investment risks associated with a lodging operation.

Using your market analysis findings, you can estimate the financial potential of your venture by creating
financial projections. Guidebooks and software for developing campground financial projections are
available through University of Wisconsin-Cooperative Extension.

Conducting Your Analysis

The sections that follow include data collection checklists and worksheets. While the section on
projecting sales should be the final step, the other sections can be completed in any order. Remember
that you efforts in studying the market will provide you with information to make better and more informed
decisions.

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Many of the ideas in this publication originated from Campground Management: How to Establish and
Operate Your Campground, by Rollin B. Cooper. Copies of this book are available from Sagamore
Publishing, Inc.

I.
Industry Trends

Studying national and regional camping trends will help you identify opportunities and threats that may
affect your operations profitability. Trend information will provide you with a basic understanding of
issues impacting short and long term demand for campground facilities.


Trend Information Sources

• State Department of Natural Resources and U.S. Forest Service
• National Association of RV Parks and Campgrounds
• Colleges and universities that offer an outdoor recreation program
• Industry Publications such as Woodall’s Campground Management

The industry trends checklist provides a sample of topics you might want to study as part of your market
analysis.

Sample Industry Trends to Research:

What camper segments are growing (tent vs. RV users, overnight vs. extended stay....)?
How are family travel preferences changing?
What factors motivate a person to select a particular campground?
What types of campground recreational facilities are most important today?

II.
Location

Location is a critical factor because it affects your ability to draw campers. Your campground location
should be accessible, attractive and convenient for visitors. Such location factors as area aesthetics,
noise safety and other factors contribute to the customer’s decision to visit and stay at your campground.

A location with visibility from a heavily traveled Interstate highway will attract transient or overnight
campers. These campers typically stop for one night of rest and continue traveling the next day. Few
amenities or recreation activities are needed for this type of visitor.

Other leisure travelers view a campground as their “destination” and stay for a longer period of time. A
more remote location is desired by campers who dislike the noise or sight of traffic. Access and visibility,
while important, are secondary to the campground’s quality and cleanliness, amenities, recreation
opportunities, and nearby attractions.

Analyze your location using the factors listed on the following checklist. You may want to highlight on a
map the location of relevant landmarks, visitor services, area attractions and competition. Use the
following checklist to complete this part of your market analysis.

Description of immediate area
Adjacent land uses
Availability of nearby services (food, fuel, shopping, ..)
Proximity to nearby attractions

Nature Features
Topography
Drainage
Aesthetic value

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Wildlife presence
Soil suitability
Tree coverage
Quiet

Unique and scenic features
Water Features
Amount of water frontage
Swimming, boating, skiing and fishing suitability

Visibility / Accessibility
Highway access
ADA compliance
Sign effectiveness
Landscaping attractiveness

III.
Local Area Characteristics

Campgrounds in resort areas may rely on local attractions to attract guests. Attractions can include both
natural and man-made places of interest. Attraction operators may be able to provide you with their
estimates of attendance and data describing seasonality trends and place of customer origin. This
information can help you gain an idea of how much tourism and recreation activity occurs in the area.
Use the following checklist to complete this part of your market analysis.

Parks
Museums
Golf Courses
Antique Shops
Amusement Parks
Shopping Centers
Casinos
Festivals and Events
Attractions
Bicycling and Hiking Trails
Snowmobile Trail
Boating, Canoeing, Rafting
Hunting and Fishing
Colleges, Hospitals and Other Institutions

An analysis of the roads serving the market area is also important. Existing highways and proposed
highway improvements should be identified. Distances to feeder markets (where the guests originate)
may be particularly important for destination campgrounds. Generally, campers travel from within a 25 -
150 mile radius from home.

IV. Competition

Probably the most important part of a campground market analysis is examining current and proposed
competition. It is sometimes helpful to conduct interviews with the management of other campgrounds to
learn about their operating characteristics and performance. In addition, you should learn about their
business volume and customer origin. Supplemental information can also be obtained from
campgrounds directories, state and local parks pubic records and discussions with local hotel and motel
operators.

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An important part of this analysis is estimating your primary competitor’s monthly and annual operating
performance. One key measure of performance is the monthly or annual occupancy percent.


Occupancy Percent = Number of overnight Sites Sold /Overnight Sites Available

In addition to occupancy percentage, each competitive operation facility should be carefully studied to
determine its strengths, weaknesses and market position. Existing area campgrounds may also be an
asset to your venture; it is often easier to capture a share of an existing market than it is to create a new
market.

You should also investigate the area to determine if there are any plans for new campgrounds. While a
high concentration of campground sites can define a camping destination, too many sites can lead to
depressed occupancy levels. The local Chamber of Commerce and community planners may be aware
of such developments. Use the following checklist to complete this part of your market analysis.

Location
Proximity to area attractions and services
Accessibility and visibility
Surrounding area, attractiveness, scenery and seclusion

Facilities/Grounds
Noise control and privacy
Landscaping and shady sites
Utility hookups
Cleanliness
Campground facilities (hot showers, flush toilets, laundry, store, snack bar ...)

Recreational Facilities
Swimming
Fishing
Nature and hiking trails
Picnic areas
Bicycling
Canoeing and boating
Miniature golf
Playground, game-room

Operating Information
Months open
Number of campground sites available (overnight and seasonal)
Occupancy percentage (from overnight rentals)
Number of seasonal rentals
Overnight and seasonal rates
Major demand sources
Plans for expansion or improvements
Amenities offered (firewood, day care, fishing licenses ....)

General Information
Franchise affiliation
Ratings in campground guides
Local reputation
Security
Friendliness

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V.
Identifying Your Customers

Once you have analyzed your competition and their customers, you should determine the type of
customer your campground will attract. For instance, can your campground sites accommodate RV or
tent campers? You will also need to determine if your recreational activities will cater to families, groups
or other leisure travelers. Another consideration is whether your campground should target travelers
passing through the area are those staying in the area for a longer period of time. Each of these
considerations will affect the facilities, amenities, and recreational programs you offer.

Based on other area campgrounds users, consider the recreation and leisure preferences of nearby city
residents. Profile your potential customers as follows.

What type of equipment do campers visiting your area use?
Where are they from (see below)?
What are their recreational interests?
How often do they camp?
How many people do they camp with?
How long are their average camping trips?
What are their demographic characteristics?

After answering these questions, you will be better equipped to develop facilities, amenities, and
recreational opportunities that will best serve their needs.

You may also want to categorize campground customers by the type of equipment they use such as:

Tents
Pop Up/Pull Up Campers
Trailers
Pickup Trucks
RV’s
Motorcycles

Analyzing Visitor’s Place of Origin

Analyzing visitor origin can be a complicated process. As these visitors may be traveling great distances,
it can be more difficult to acquire customer information than with a traditional analysis of local residents.
Nonetheless, understanding these customers requires obtaining information about their places of origin,
as well as data about their demographics and lifestyles.

A technology called geographic information systems (GIS) can be used to solve these problems.
Combining GIS with your customer address lists or chamber of commerce inquiry records, gives you the
ability to profile tourism customers both geographically and demographically. Furthermore, GIS
technology can use this information to search (prospect) for new potential customers in other
communities that match your geographic or demographic criteria.

For more information, see: http://www.uwex.edu/ces/cced/flypp.doc

VI.
Project Refinement

One of the most important considerations in refining your campground plans is estimating the optimal
number of campsites. The proper site size is dependent on a number of variables including:

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• Market area demand as measured by monthly and annual occupancy rates achieved by the
competition
• Financial resources available for campground development
• Number of sites necessary to be profitable

In Wisconsin, the average campground has 65 sites. In recent years, many smaller campgrounds have
either expanded or gone out of business. As campground size is often a financial decision, it is
recommended that you prepare various cash flow scenarios using a variety of campground size and
occupancy assumptions. From a financial perspective, the ideal number of sites will provide you with the
highest cash flow (after debt service) per site.

Today’s value-conscious consumer will choose your campground over your competitor if you offer a
better, more unique camping experience. Use the product refinement worksheet below to identify your
targeted customers and the campground characteristics they will value most.

Overnight Market Segments that will be served:


Passing Through
____%
Extended Stay
____%
Other

____%


Total
100%

Couples

____%
Family

____%
Group

____%
Other

____%


Total
100 %

Tents

____%
Popup/Pull-up
____%
Trailers

____%
Pickup Trucks
____%
R.V.s

____%
Motor Cycle

____%


Total: 100 %

Facilities to be provided to serve key segments (list):
Ø
Ø
Ø
Ø


Recreation to be offered to serve key segments (list):
Ø
Ø
Ø
Ø


VII. Projecting Your Sales Potential

At this point in your market analysis, you have completed your data collection. You have analyzed
industry trends, your location and facility characteristics, market area visitation activity, local competition

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and potential market segments. You are now ready to estimate your sales potential based on these
factors.

Campground site rental revenue is a function of your overnight occupancy percent and your average
overnight rate as defined earlier. Other sources of income may include seasonal site rentals, store sales,
boat rentals, etc.

A key indicator of future performance is past occupancy and overnight rates. Existing campground
operators can rely on their historical records for this information, while prospective operators must look to
comparable campgrounds for data on their past performance.

The steps that follow will help you estimate your overnight occupancy, rates and sales potential.

1. Assess Your Competitive Strengths and Weaknesses

There are no magic formulas to predict your occupancy level. However, by analyzing your campground’s
competitive strengths and weaknesses relative to others in the area, you can estimate if you will achieve
a higher or lower occupancy rate than these other operations. Compare your operation with competitive
campgrounds using the criteria below. Be sure to keep in mind the types of campers that make up your
targeted market segments.









Competitive




Competitive




Strength < ------------------------------------------- > Weakness

Your Location



*
*
*
*
*
Your Facilities/Grounds


*
*
*
*
*
Your Recreation Facilities


*
*
*
*
*
Your Management Skills


*
*
*
*
*

2. Project Your Occupancy

Use the monthly occupancy worksheet below to estimate how many sites you could sell on an annual
basis. To do this, analyze the seasonality of tent campers and code each month as Peak-Season (P),
Middle-Season (M) or Off-Season (O). Do the same for the other market segments.

Based on these demand patterns, the performance of other campgrounds in the area that serve these
segments, and your strengths and weaknesses relative to those campgrounds, estimate your monthly
occupancy levels. Complete the multiplication in the following worksheet and sum the monthly “Sites
Sold” to arrive at your annual totals. Your annual occupancy percent is equal to your annual Sites Sold
divided by your annual Sites Available. Compare your annual occupancy projection with local competition
and state and national averages to make sure it is realistic.

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Monthly Occupancy projection Worksheet

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

Total
Indicate Peak- Season
(P),
Middle-Season (M) or
Off-Season (O)














Tent














Pop-up/Pull-up














Trailers














Pickup Trucks














RV's














Motorcycles












































Occupancy
Projection














Days Open














X Sites














Sites Available =












































X Occupancy %














Sites Sold =



























































Example:






























Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

Total
Indicate Peak- Season
(P),
Middle-Season (M) or
Off-Season (O)














Tent
O
O
O
M
M
P
P
P
M
M
O
O


Pop-up/Pull-up
O
O
O
M
M
M
P
P
P
M
O
O


Trailers
M
M
M
M
M
M
P
P
M
M
M
O


Pickup Trucks
O
O
O
M
M
M
M
P
M
M
M
O


RV's
M
M
M
M
P
P
P
P
P
P
M
M


Motorcycles
O
O
O
M
P
P
P
P
M
O
O
O
































Occupancy
Projection














Days Open
31
28
31
30
31
30
31
31
30
31
30
31


X Sites
75
75
75
75
75
75
75
75
75
75
75
75


Sites Available =
2,325
2,100
2,325
2,250
2,325
2,250
2,325
2,325
2,250
2,325
2,250
2,325

27,375






























X Occupancy %
10%
10%
10%
25%
50%
70%
80%
90%
60%
25%
15%
5%

38%
Sites Sold =
233
210
233
563
1,163
1,575
1,860
2,093
1,350
581
338
116

10,313
















3. Project Your Rates

In the camping industry effective pricing is critical; rate increases or decreases have considerable impact
on your ability to attract customers while still retaining a desired profit level. Setting prices to maximize
profits is an important process that requires consideration of the rates charged by competitors and the
price sensitivity of travelers to the area. Three methods are available:

• According to Rates of Others - Analyze the rates charged by your competitors. Project your
average site rate by considering the rates and quality levels of your competitors. Compare your
expected price/quality level and appeal with that of your competitors.

• According to Demand - Consider your targeted market segment to help determine maximum rates
people will pay. Analyze your expected market segments. Estimate price sensitivity and potential
for lost business if rates are increased.

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• According to Costs - Determine your projected expenses and your profit goal. Given your projected
occupancy level, what rates must you charge to break -even?

4. Project Your Sales

After you have developed occupancy and site rate projections, you will be able to calculate your projected
overnight site revenue (excluding seasonal rental revenue) as follows:


Projected Annual Occupancy


________

X Number of Sites at Your Campground
________
X Days Open




________

X Average Site Rate



________



= Projected Annual Site Revenue

$ ______


The Next Step: Developing Financial Projections

Once you complete your market analysis, you will be able to develop income and cash flow projections
for your campground. If you are an existing operator, these projections can serve as a financial plan or
budget. If you are a prospective operator, they will help determine the financial feasibility of your venture.
To help you, guidebooks and spreadsheet software templates are available through the University of
Wisconsin-Extension Center for Community Economic Development.


This guidebook was updated in 2003 by Bill Ryan and Michael Chrisler of the University of
Wisconsin-Extension Center for Community Economic Development and the Wisconsin Small
Business Development Center. Assistance provided by Hannah Kirking. This publication was
originally written in 1994 with assistance from Ana Maria Tolentino, Rolf Sovre, and David Bornstein;
project assistants.

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