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High-Quality RV Parks Defy Recession, ARVC Says

Originally Published in MotorHome Magazine

2399725_National ARVC logo.gifFrom 2000 to 2005, as real estate prices rocketed to unprecedented
levels, developers pulled out their wallets and encouraged owners of RV
parks and resorts to sell their properties because they wanted to
replace them with shopping malls – all more lucrative uses of these
properties, or so they thought.

As the real estate market has tumbled, however, many developers have not
been unable to get very far with their plans, and several of the RV
parks and resorts they acquired have not only survived, but prospered
during the current economic recession, according to a release from the
National Association of RV Parks and Campgrounds (ARVC).

In fact, one lesson that developers have learned is that
high-quality RV parks and resorts are more economically resilient than
hotels, shopping malls or condos, particularly when investments are made
to improve these parks.

“Camping is a recession-proof business,” said David L. Berg, ARVC,
adding that most of the nation’s campgrounds, RV parks and RV resorts
have reported stable to slight increases in income this year, despite
the recession.

Berg cited his own campground as a case in point. The park, Red
Apple Campground in Kennebunkport, Maine, scored an 8.5% increase in
business compared to last year, while hotels and motels in his area saw
their business drop by as much as 25 percent. “Camping is more family
oriented and more reasonably priced than other travel and tourism
options,” he said, adding, “The state of affairs of our economy has not
hurt the camping business at all.”

Developers, on the other hand, have mistakenly assumed that land is
always more valuable when it’s used for hotels, shopping malls and
condominiums. While this kind of thinking may apply to poorly maintained
RV parks, in resort destinations, high-quality RV parks and resorts
remain economically resilient, even when times are tough.

Consider the story of Emerald Desert RV Resort in Palm Desert,
Calif., one of the top winter vacation destinations in the country.
Several years ago, Scottsdale, Ariz.-based Taylor Morrison bought the
park with plans to replace it with high-end housing. But the recession
pulled the rug out from under the real estate market before Taylor
Morrison could finish its project. And while Taylor Morrison had
converted portions of the RV resort to housing, the rest of the resort
remained standing, including all of its RV sites, clubhouse and other
core buildings, which prompted the company to put the RV resort back on
the market.

La Jolla, Calif. based SunLand RV Resorts bought Emerald Desert
last summer and plans to keep as a resort. “I’ve had my eye on this
property for 20 years,” said Reza Paydar, SunLand president and CEO. “It
is very valuable. There is nothing like it.”

SunLand, in fact, has already invested more than $1 million in
improvements to the 251-site property and plans to operate it as a
year-round luxury RV resort. Its newly designed 1,200-square-foot lobby
features a custom-designed floor mosaic and reception desk with inlaid
stone. Luxury furnishings are also being added to the newly designed
fitness center and swimming pool area.

Meanwhile, the economic downturn has given La Pacifica RV Resort in
the San Diego, Calif., suburb of San Ysidro a chance to assert its
economic resiliency. An investor purchased the property several years
ago with the idea of reselling it to a housing developer. But as the
real estate market tanked, the investor’s plans evaporated and he wound
up selling the property to another investor, Bart Thomsen, who plans to
make improvements and keep La Pacifica as an RV resort.

“The park is in very good condition already. But we’re absolutely
intent on making it an even better place,” Thomsen said. “We’re putting
money into fixing up the bathhouse and clubhouse and investing in better
utility pedestals and making improvements to its streets. We’re
planning on it being an RV park for the long haul.”

Developers’ plans to convert RV parks and resorts to other uses
have not only been put on hold by the recession. In some cases, local
residents and businesses and city officials have discouraged them from
replacing RV parks and resorts, which they value as important pillars of
a tourism economy.

Consider Holiday Cove RV Resort in Cortez, Fla. A few years ago,
the property was purchased by an owner who wanted to replace it with
condominiums, but the developer ran into opposition from local
residents, businesses and city officials. “They claimed the plan was out
of character for the community and they were concerned that residential
use wouldn’t support the local businesses that are geared primarily to
the tourist and vacation business,” said David Gorin, who recently
purchased park from the developer. “The previous owner was simply unable
to get the zoning and planning commission to approve his plan. He
fought with them for five years and then gave up and sold the property
to us.”

Gorin and his business partner have since invested $1.4 million
improving the property and making it into a high quality RV resort.

These investments in RV parks and in RV park improvements are
paying off because camping and RVing enthusiasts have shown a consistent
willingness to pay for parks that offer high-quality facilities,
amenities and service, said Linda Profaizer, ARVC president and CEO. RV
parks and resorts are also aided by the fact that they offer the
nation’s most affordable vacation option, she said.

John Grant, owner of San Diego-based Park Brokerage Inc., said
growing consumer interest in camping and RVing is also helping RV parks
and resorts to retain their real estate and business value during the
worst recession since the Great Depression. “RV parks are holding on to
their value because people are downsizing their vacations, taking their
RV or tent and going camping,” he said. “This translates into higher
property and business values for parks.”
By RV Business 

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