Transient Utilities, Stop Burning Your Money
For this Blog, we are going to define Short Term as any length of stay less than 30 days (monthly).
For decades, RV Campgrounds have always included utilities for FREE to their customers. This was primarily because there was no way to measure and bill for services during a short stay. If you wanted to charge, it would take a lot of labor and running around to go out to each site between stays to read the meter.
Times have changed. You’re probably already aware of the wireless electric and water meters on your own home. These remote read technologies are becoming common place across the country and awareness is commonplace. The same technology is now available for private sub-metering including apartment complexes, manufactured housing, and now RV parks, resorts, and marinas.
When utilities are included in the rate, it’s the business owner that loses. Many properties set their rates months or years in advance and try to average their expenses. Unfortunately, they get burned when there is unusually hot or cold weather, when the utilities announce rate changes, and as new hungry electrical vehicles, golf carts, etc. become more common.
Margin compression is a big problem. For example, if you've included $5 of energy into the rate and someone with a small travel trailer checks in, you're in good shape. However, what happens when a Class A or EV is in one of your sites? They can end up using 15 to $25 of energy. You might have made 50% gross margin on the typical travel trailer, but you might be down to 10% or even underwater for the large Class A or fifth wheel motorhome. Not only is this unfair to the little guy, but those guests with more expensive rigs, can afford to spend more while they're on your property.
It’s time to stop giving away (or burning) your money.
It’s now possible to start recovering the cost of utilities. Using today’s advanced metering technology and sophisticated PMS systems, it’s possible to measure utility usage in real-time and bill it back to the appropriate guest. Not only is the metering data instantly available, but these new advanced metering systems also help stay on top of other park management issues such as meter outages, voltage problems, and overloading circuits.
So, when do you start charging transient guests for utilities? The short answer is that it depends. There are a number of factors to be considered when making this decision. Some of these factors include your occupancy rate, your average daily rate, the popularity of your property, and your local utility rates. We will dive deeper into this topic in another blog and upcoming white paper.
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