VOL. 127 | NO. 94 | Monday, May 14, 2012
Acquisition Underscores RVC’s Long-Term Goals
By Sarah Baker
Long before Andy Cates established RVC Outdoor Destinations in 2007, he solidified his commercial real estate background at Trammel Crow Co.
The experience has helped Cates grow his Memphis-based operation of upscale, resort-like campgrounds for the last five years. For Cates, outdoor hospitality and CRE have plenty of business parallels.
“Ultimately, the land valuations, land development and property management absolutely directly carries over,” he said. “That commercial real estate skill set is clearly helpful and required in this.”
RVC claims to have created the “outdoor destination” hospitality model – providing a variety of lodging options such as RV sites, cottages and yurts, all set within unique natural environments.
“We really weren’t and haven’t been banging the drums on telling our story until really the last year,” Cates said. “We’ve spent that timeframe building our culture and our operating platform, and obviously developing properties. Now, we are aggressively spreading the word about what we’re doing and seeking to expand as we redefine an industry that really hasn’t changed significantly in decades.”
For example, RVC recently announced its acquisition of the Garden of the Gods Campground in Colorado Springs, Colo., marking the company’s seventh location. The 200-site property has been the top RV and outdoor lodging destination in the region – with views of Pikes Peak, the most visited mountain in North America – but has been under bank ownership since 2010.
RVC paid all cash, closed quickly and is investing a significant amount of money into the property – an initial $200,000, as well as that much more and then some during the “reflagging process.”
“It was as much of a renovation analysis as understanding what that property already does in the market,” Cates said. “The fact that it had a large database and a strong, very loyal customer base, was both attractive and also a challenge in that we need to communicate quickly with that group of customers that the property is being revitalized.”
That process also entails bringing Garden of the Gods up to RVC standards. RVC currently operates six properties in Arkansas, Georgia, Florida and North Carolina. Amenities offered in those communities include concierge service, a “bark park” off-leash area for dogs, modern swimming pools, boating and fishing rentals, coffee, beer and wine bars, free Wi-Fi and cable, and a gift shop.
In many ways, Cates said, RVC is attempting to create another product class within CRE. His goal is similar to what was done with self-storage some 20 years ago, when the concept itself grew dramatically and scaled, or when Kemmons Wilson launched Holiday Inn in Memphis in the early 1950s.
“It effectively created full-service hotels as a specific segment of the commercial real estate world,” Cates said. “You had the Holiday Inns and the Hiltons and the Marriotts and those brands take what had been a mom-and-pop lodging business and create consistency and high standards and strong marketing to drive traffic. And that’s not happened in outdoor hospitality.”
Cates said RVC would like to eventually have an outdoor destination property in Memphis, but as with CRE, the economics and the timing have to make sense.
“I think that it’s our backyard and our home and I think there’s a high likelihood that we’ll have a presence here, but it’s got to be the right fit for everybody,” Cates said. “We’re hopeful we’ll have something to talk about here in the next year or so.”
Because with fluctuating fuel prices, RVC doesn’t see as much reduction in travel or planned vacations as it does with the scope of vacations and the distance to that location.
“A lot folks are focused on what’s within three to four hours of the specific vacation market,” Cates said. “And there’s absolutely a more demanding value proposition by the consumer – everybody in the United States is demanding more for their dollar than they ever have. We welcome that because we feel passionately that we … can provide a phenomenally good experience for a very reasonable amount of money.”