Cabins added at Lake Guntersville State Park (Alabama)

Summary

Recreation Resource Management (RRM) funded and installed 10 cabins within the existing campground and provides cleaning, maintenance, and customer service functions for the cabins in exchange for a 12-year revenue share agreement on cabin revenue.

Initial Situation and Agency Goals: Lake Guntersville State Park is a popular lake-front campground and day use are near Guntersville, AL. Alabama State Parks (ASP) has been in partnership with RRM since 2016 when RRM reopened Roland Cooper SP after ASP had to close it due to budget shortfalls. At Roland Cooper, among hundreds of thousands of dollars of capital investment to refurbish the park, RRM installed a number of cabins. Seeing the immediate positive response to these cabins in the visitor community, ASP asked RRM to make a proposal for addition of cabins at several parks, including Lake Guntersville.

In seeking such a proposal, ASP wished to achieve a number of goals

• First and foremost, ASP wanted to add a very popular amenity to its parks that it could not afford to themselves.
• ASP required that the campsites that were converted to cabins had to clearly generate more revenue for the park than the existing primitive camping loop.
• ASP could provide utilities to the cabins but could not separately meter them, so any concession fee negotiated would have to cover utility costs as well
• ASP engineers would have approval of all designs, finishes, and colors.

RRM Proposal

The RRM proposal that eventually was accepted by ASP was to place 10 deluxe cabins on ten sites throughout the campground as mutually agreed by RRM and ASP. The cabins have two bedrooms (one with a double bed, one with four bunk beds), a kitchen, a den, and a bathroom and one of the ten cabins is ADA accessible. The cabins were carefully placed to avoid removing trees and to be able to use the old camping spur for parking. Each cabin was factory-built to high standards with full insulation and air conditioning (a critical amenity in the summer in Alabama). Each site has a screened porch, a barbecue, and a fire ring. The total capital investment by RRM was just under $400,000.

Contractual Terms

• RRM oversees and pays for all installation and construction, with plans approved by ASP
• RRM collects all revenue from cabins and pays CSP $25 per occupied night plus 15% of revenues net of lodging taxes over $25 a night ($25 was the then-current one-night camping rate and structuring our payments in this way assured CSP management that they would be making more per visitor stay than before the contract)
• RRM pays for utilities (just propane in this case) and insurance
• RRM provides all operation and maintenance. CSP provided one camp site for an RRM on-site host to occupy. RRM paid for costs of improving this camp site to full RV site
• Contract length of 17 years (the remainder of the existing 19-year store and marina contract). Cabins become CSP property at end of contract.

Results

• This flagship park gained a popular new visitor amenity that has been highlighted many times since in CSP state-wide public relations and advertising.
• Visitors love the cabins
• Less than 6 months after their opening, the cabins are already averaging 45% occupancy.
• We project $40,000 in concession payments to ASP in the first year, well more than could have ever been earned from the original 10 camp sites.
• New visitor demographics were attracted to the park. For example, visitors include a disproportionate number of single moms who like the security of the cabins
• Cabins have, perhaps paradoxically, helped to promote more traditional forms of camping like tent camping. For example, a lot of kids camp outside on the tent pad while their parents or grandparents sleep inside.
• After over 10 years of service the cabins are still in nearly-new shape, requiring only minor maintenance and a seal coat on the exterior every few years. They will be a terrific asset for the park for decades to come.

Options and Alternatives

The details of this project, while illustrative, represent just one set of many possible choices and options that are available to our agency partners. This project is a good representation of one set of choices, but many of the decisions could have been made differently for a different agency, at a different park, with different visitors. For example:

• These cabins were simple and with limited amenities, but we have executed similar arrangement with other agencies that included cabins that had two bedrooms, a kitchen, a living room and a bathroom (See our Lake Guntersville SP case study).
• We can accommodate a wide range of contract lengths, but in general shorter lengths require smaller concession fee payments to the agency
• We can split operating roles with the agency in many ways. For example, in this case CSP wanted us to use their existing state reservation system, but we also have our own in-house proprietary system that we use with other agencies
• While this installation was in a campground, that is not a necessity. A day use or picnic area, a traditional city park, a trailhead, or just about any unused plot of recreation land could host such cabins.

The Ultimate Endorsement: We take advantage of this service in our own campgrounds. RRM’s original and still its largest business is the turnkey operation of about 150 entire public campgrounds and day use areas under concession contract. In most cases, these contracts do not allow for any development. But for the dozen or so campground locations we operate where we have the flexibility to add facilities, this sort of cabin project is usually the first expansion or improvement we undertake. Other private campground operators like KOA have spent the majority of their capital spending over the last 10 years or so on cabins. This is easily the number one most popular new campground amenity among visitors.

To Learn More: Visit our web site at www.vista-rec.com/cabins or see all our operations at our public information and reservations site vista-rec.com. You may contact Warren Meyer at warren@vista-rec.com or 602-569-2333 to learn more or schedule a visit.