High occupancy means rate flexibility for facility operators. Some will raise rents when they hit a target occupancy rate. “We examine rate increases based on the percentage of occupancy for particular size codes,” Nielsen says. “For instance, if the 10-by-20s are 100 percent occupied, we would be more likely to raise rents in that size.”
Nielsen admits the newness of Empire Boat & RV in its market has tempered rate increases that a more established facility may have been able to implement. “We are being sensitive about rate increases with the motive that we want to build a loyal and consistent tenant base,” she explains. “In general, target occupancy for rate increases is 80 to 90 percent. We also offer incentives if tenants agree to pay for a year upfront, or if they sign up for longer-term contracts.”
Robyn Wilson, a district training specialist with US Storage Centers, agrees that pushing rates during high occupancy is a key strategy for maximizing revenue. US Storage Centers operates 62 storage facilities in nine states, including 18 boat/RV sites in Arizona, California and Florida.
“We typically raise rates at six months and then every nine months thereafter, and the amount is about 4 to 6 percent of the rate,” Wilson says. “It’s always a hit and miss with the RV lot because some people go out to the desert for activities during the summer months, so they will cancel the storage.”
Despite the seasonality of the business, Wilson says, “Many RV lots stay pretty full all year-round. At times we actually have a waiting list.”
Creative Marketing Efforts
Getting the word out about your boat/RV-storage facility and marketing your points of differentiation from competitors are critical to success. Many operators use local newspaper advertising and employ Internet and e-mail campaigns, including an up-to-date website that promotes rent specials and explains a site’s full features and amenities. Operators should also consider accepting online rental payments. Such functionality will help keep tenants current, and the convenience will be viewed by customers as an extension of your onsite customer service.
The specialty nature of the business, however, means word of mouth will play a major role in facility exposure. Referrals from existing customers can be incentivized and help spur business. Empire Boat & RV Storage, for example, rewards referrals from tenants with rent credit, and provides Visa gift cards for outside referrals.
A formal referral program with local boat and RV dealers as well as repair centers can be among a facility’s most rewarding and cost-effective marketing strategies. “We currently have referral partnerships with three RV dealers in the area, as well as participating in two chambers of commerce,” Nielsen says. “We also work with boat/RV mechanics and detailers to come on site and work on tenant vehicles.”
Rewarding business referrals is a necessary and important step in maintaining momentum built on word-of-mouth business. “I would say we get 10 percent of our rentals annually from RV repair shops or dealers,” notes Wilson. “After the new customer stays for three full months, we send the representative from the repair shop or dealer a check for 50 percent of the new customer’s first month’s rent.”
As the economy continues to recover, the record number of boat and RV owners should grow along with it. In the RVIA’s RV Consumer Demographic Profile released last year, 21 percent of all U.S. households indicated intent to purchase an RV in the future.
“These purchase intentions are very encouraging for the industry,” says Sid Johnson, chairman of RVIA’s Market Information Committee and director of marketing for Jayco, an RV manufacturer. “These survey results were collected in a challenging financial environment, yet they are very close to the 2005 data when the economy and consumer outlook was much brighter. Overall, the results indicate continued strong demand for RVs in the years ahead.”
In the end, maximizing revenue is about more than rentals and ancillary sales, it’s about customer retention and sustained, manageable growth. To make the most profit through your boat/RV-storage operation, seek to attract that special core customer, and implement as many attractive amenities as possible to keep their business.