Revenue Management for Campsites and Holiday Parks by Xotels
Over the past year, we have evolved into a new and exciting segment of the tourism industry. We managed the revenue management for a camp site and holiday park in England. We adapted our methodology to the specific requirements of this type of accommodation. The results are incredible. We would like to take you with us on our trip over the last few months, implementing the dynamic price performance for Lady’s Mille in Devon, UK.
We were invited to take charge of the revenue management for this campsite and this holiday park, and we were very excited to learn a new area to which we were able to apply our knowledge and expertise. We were motivated by the true entrepreneurial mentality, as well as the company’s vision at Lady’s Mile, and we accepted this very exciting challenge.
Just like for hotels and youth hostels, campsites and holiday parks offer a perishable product, which is based on the revenue management strategy. The theory of selling the perfect product, at the right time, in the right place and at the right price, applies perfectly. So dynamic prices should be applied to maximize the bottom line. But where to start?
The next step was to analyze the configuration of the management systems in place and to review the existing data reports. Based on this, we quickly concluded that we need to establish a unique KPI on campsites to allow for objective measurement and analysis of results. Below you will find a step by step study on how we set up revenue management for this campground and holiday park.
KEY PERFORMANCE INDICATORS
Below you will find an example of the “new” PKI we have in place for revenue management for camping.
- UN – Unit Nights: number of units (static or tourism) that were occupied during one night
- TUM (AUR) – Average Unit Rate
- REVPAU – Revenue per Unit Available
After implementing these changes in our reporting structure, we reviewed the hosting offer.
TYPES OF ACCOMMODATION
There is a major difference with the hotel’s traditional accommodation structure. Holiday parks and camping sites are in fact a hybrid business model with segments, in this case types of accommodation, which really have a completely different behavior in terms of seasonal demand curves, booking deadlines, length of stay, occupancy levels pax, etc.
In this case, we differentiated 2 types of accommodation:
- Static – types of fixed accommodations provided by the company. They include: caravan houses, camping lodges, lodges, cabins, cabins, independent apartments. Etc.
- Touring – Places to stay in units that guests bring with them. These include: camper-van, caravan and tents.
On tour, we split into 2 sub-segments:
- Seasonal – including rental for a couple of months or the entire season / year.
- Transient – including stays from 1 night to a few weeks.
The distribution landscape for holiday parks and camping sites is very different. There are, of course, OTAs (online travel agencies) specialized in this field. To name a few: UKcampsite.co.uk, Caravansitefinder.co.uk, campings.fr, haven.com, hoseasons.co.uk, etc.
We are actively exploring other alternative channels to create more exposure and increase the online reach of Lady’s Mile. Our strategies are aimed at improving both occupancy and average rates.
Segmentation is also an important part of revenue management. We used the following configuration to enable appropriate data analysis by supporting our decision-making needs:
- Third party
The groups will be something we will look at during this year.
The most important part of revenue management is obviously dynamic pricing. Distinct from traditional seasonal rates published in a supply and demand-driven performance structure, we have laid the groundwork for maximizing revenue results.
Based on the historical performance of Lady’s Mile, we have developed a demand schedule, with an initial rate structure. As with hotels, we measure the pace of booking and the demand curves on which we predict future occupancy levels. However, as we have already mentioned, we are dealing with a hybrid business model, including the types of Static and Touring hosting, which is done separately, as well as for the Transit and Seasonal sub-segments in Touring. .
Based on our planned pricing, each individual accommodation unit is obtained independently, optimizing total lodging revenues.
We have developed an extended price grid, with different strategies, taking into account several factors:
- Seasonal rate models (low, medium, high and peak season levels)
- Supplements by type of unit
- Length of stay, arrival and departure rates
- Short stays, 1 or 2 days
- Weekend versus mid-week
- Rate of 3, 4 days and full week price
Such a “complex” or rather global rate structure gives us the tools we need to efficiently produce and maximize revenue.
A note for skeptics there, we have experienced no resistance with consumers in terms of dynamic prices. Consumers have been educated over the years by industries such as airlines, car rentals, hotels, etc., as prices vary over time.
SCHEDULE OF DEMAND AND FORECASTS
To finish the job, we built our usual application schedule, showing all relevant and required data in one report. This includes data such as book statistics, the pace of recovery, competing information on benchmarking and price comparisons. This allows us to make informed decisions and predict accurately.
We also worked closely with the property operations team to improve procedures to improve the experience and perception of the service. Their contribution also contributed to a better understanding of the unique factors of their business and their market. Teamwork is essential to succeed, of course.
In addition, we helped them launch a new website. The goal is to position the property as a market leader and differentiate it from other suppliers. The new site is much more structured than before, with intuitive navigation. It has a modern appearance and clearly describes the type of product, facilities and services offered. Improved search engine ranking and conversion will lead to growth in direct sales. Look: www.ladysmile.co.uk
In the first quarter of 2017, the most difficult season for this type of activity, we generated £ 136,000 in additional accommodation revenue compared to last year, which represents a 90% growth in the number of visitors. business.
The outlook for the rest of 2017 is also very exciting. We are already at 88% of the revenue generated in 2016. This is because we have been able to significantly increase the average rate. The AUR increases by 41% for the whole year.
Of course, this is slightly inflated because Static, with a higher AUR, has a lot more time than Touring Transient. But both have increased: the static AUR + 24% over last year, and Touring AUR is + 10% over last year, and we expect this to continue to increase.
2017 will be an incredible record year for Lady’s Mile Holiday Park.
MORE MILES TO DO
We have just put in place a new PMS, we are now looking to explore new opportunities with this improved system in terms of yield, inventory management and distribution.
In addition, we are working on travel calculations between accommodation units, calculating profitability by unit type. In a camping or vacation park, revenue and profitability can be optimized by having the right product or mix of units. So, we advise the owners on the investments and the ROI of each type of unit.
And many other ideas in mind, which will keep us busy for a while ….
We really enjoyed this adventure in this new area of tourism and accommodation industry and we are looking forward to working with more campsites and holiday parks.
Sanjiv Patel @ www.myhospitalitysupplies.com