Are campgrounds profitable? This is a question that many entrepreneurs ask when starting or are considering starting a campground. The answer, of course, depends on a variety of factors. Campgrounds can be tremendously profitable or they can exist on only a thin profit margin, however, there are several ways to improve your profit margin and make your campground more profitable. In this article, we will explore some tips for doing just that.
How Profitable Are Campgrounds?
So, how profitable are campgrounds? A campground’s profitability will depend on a number of factors, including:
- The location of your campground.
Is your campground located by the beach, in the mountains, within an urban neighborhood, or tucked away in the country? The answer to this question partially determines your profit margin.
- The type of campground.
A tent campground is typically less expensive because campers are adventurous; usually cooking by the fire and generally “roughing it”. Campgrounds with a pool, shower facilities and laundry room are considered “just like home,” while RV camps, with full-service hookups, are on the luxurious end of traveling in style.
- The amenities and features offered at your campground.
Campgrounds or RV camps that offer services and amenities command higher site fees and, therefore, bring in higher profit margins. And, campgrounds with small retail stores also garner profit from the sales of food and supplies to campers.
- The seasonality of your business.
If your campground is popular during certain seasons of the year rather than year-round, your profit potential is lower. Although you may make a generous profit during the “high season” for your campground, your profit may drop severely during the seasons when your campground isn’t fully booked.
- The marketing and advertising efforts of your campground.
How do you market your campground and advertise the amenities that are available? This impacts the number of customers who camp at your location and the profit margin you will make.
The average annual profit margin made by private campgrounds in the US is about 20-30%. So, for every dollar that a campground brings in, the owner can expect to keep 20-30 cents as profit. Furthermore, campgrounds typically make an annual revenue of $50,000-$200,000. So, a campground that brings in $200,000 in revenue can expect to have a profit of $40,000-$60,000.
With that said, there are certainly ways to increase the profitability of a campground. Let’s take a look at some tips for doing just that.
How To Improve Your Campground Profits
There are a number of things that you can do to improve the profitability of your campground. Here are some tips:
Increase Your Rates
One of the simplest ways to increase your campground’s profitability is to increase your rates. If you are not charging enough for your campsites, then you are leaving money on the table. Do some market research and find out what other campgrounds in your area are charging. Then, price your campsites accordingly.
Of course, you don’t want to price yourself out of the market. So, make sure to strike a balance between charging too little and charging too much.
Reduce Your Expenses
Another way to increase your campground’s profitability is to reduce your expenses. Take a close look at your campground’s operating costs and see if there are any areas where you can cut back. For example, you may be able to save money on your electricity bill by switching to LED light bulbs. Or, you may be able to reduce your water bill by investing in some water-saving devices.
Every little bit helps when it comes to reducing expenses. So, even if you can only find a few areas where you can cut back, those savings will add up over time and help to improve your profit margins.
Another way to increase your campground’s profitability is to advertise more. Make sure that potential customers are aware of your campground and what it has to offer. Invest in some good marketing and advertising materials, such as a website, brochures, business cards, etc. And, make sure to get the word out about your campground through social media, online directories, and other channels.
The more people are aware of your campground, the more likely they are to visit. And, that means more revenue and profits for you.
Offer More Amenities
Another way to make your campground more profitable is to offer additional amenities. If your budget is tight, consider offering small items, such as guest toiletries, in the shower rooms. Add Wifi throughout your campground to entice campers who want to connect while camping. Clean and repair any equipment, furnishings or electrical systems to make a good impression. Offer a small gift to children when they arrive and a piece of chocolate to campers when they check out. Small gestures can make big impressions and guarantee repeat visitors. If you can afford to make larger investments, build a pool with a splash pad to guarantee visits from families. Add group campsites to bring in additional revenue. Build on creative ideas for those groups, as well, and offer unique programs or services.
Offer Amenities Your Competitors Don’t Have
In addition to offering all of the standard amenities, you can also make your campground more profitable by offering amenities that your competitors don’t have. If you can offer something that no one else does, then you are sure to attract attention and draw in more customers.
One of the best amenities you can offer is a small retail store, packed with the camping essentials your guests will want. In addition to food and beverages, consider offering firewood, fishing poles and kits, medicinal basics, small toys and a wide array of local foods, such as jams, honey, cookies and other custom-made treats.
If you are located near a lake, you can offer canoe and kayak lessons and rentals. Or, if you are located in a rural area, you can offer horseback rides and riding trails. There are endless possibilities when it comes to offering unique amenities. Just make sure to do your research and determine which amenities will bring the highest increase in profits to your business.
Develop A Great Reputation
Finally, one of the best ways to make your campground more profitable is to develop a great reputation. If you have a reputation as being a clean, friendly, and well-run campground, then you are sure to attract customers.
There are a number of ways to develop a great reputation. One is to make sure that your campground is always clean and well-maintained. Another is to train your staff to be friendly and helpful. And, of course, you need to provide great customer service.
If you can do all of these things, then you are sure to develop a great reputation that will bring in more business and help to improve your profit margin.
As you can see, there are a number of ways to make your campground more profitable. By increasing your rates, reducing your expenses, advertising creatively, offering more amenities, and developing a great reputation, you can attract more customers and boost your bottom line. So, if you are looking to improve your campground’s profitability, put these tips into action and you will soon see positive results.