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Math You Can Trust: Amenities = Rate + Occupancy

July 21, 2021
A close-up of a mathematical equation printed on a piece of paper.

Boosting Revenue: The Impact of Park Amenities

One of the questions we are asked most often is, "What amenities should I build at my park," It is a great question and one that needs to be pondered before embarking on any major cap ex upgrades.

The answer is, "It depends." The truth is, the right amenities increases both rate and occupancy.

One of the amenities that is most requested in a park is a pool. It does not matter if you are on the ocean, a lake, or a pond, people want a pool. If an owner tells me guests are not asking for one, most often they are not telling me the truth or they are not speaking to the front desk staff.

My very first park was close to an ocean beach with a private bay beach on site. People still demanded a pool. Then a second pool. Then a splash pad. And now, they want another pool.

A pool, conservatively speaking, adds about $5 per night to a site night and increases occupancy about 5%. If you are a park of 150 sites, and you spend $150,000 on a pool, this is what is looks like:

No Pool 150 sites 50% annual occupancy $50 ADR = $1,368,000

Pool 150 Sites, 55% annual occupancy $55 ADR = $1,656,000

Year one return on pool $288,000

Other coveted amenities such as 5 star bathrooms, splash pads, screaming fast Wifi, and concrete pads can also provide ADR and Occupancy boosts.

Never plan to go into a park with sites only and then expect to add amenities from cash flow. It is a bad idea. You will depress your ADR, attract a demographic looking for a lower ADR, and struggle to become something else in the future.