Should RV Park & Campground Owners charge for electricity use for ALL types of campers?

As we move towards spring, many campground and RV park owners are refining their budgets and searching for ways to become more profitable in 2024.

The most successful campground operators know their expenses and recognize controlling energy costs contributes significantly to the bottom line. Electricity costs are heavily dependent on the geographic location of the campground. In 2023 some states had single digit increases while states in areas such as New England experienced much higher double-digit increases for their electricity.

The good news is 2024 is expected to see a softening economy and reduced electricity charges. Forty percent of electricity in the U.S. is generated by Natural Gas. After a 14-year high the price of Natural Gas has been decreasing which is positive news for RV park owners. However, recent political unrest, worldwide energy production decreases, and higher interest rates could impact electricity rates in 2024.

Energy is not the only thing that determines electricity costs. Approximately 50% of electricity costs are associated to wiring. Aging energy grids including transmission facilities that are decades old along with the expensive adoption of solar and wind technologies for electricity production will keep electricity costs trending upward over the long term.

According to the 2023 North American Camping Report by Kampgrounds of America (KOA), the world’s largest network of private campground operators, a record high 58 million Americans camped in 2022, including both RV and tent camping. RV ownership and camping have also reached new record highs in recent years. The RV Industry Association (RVIA) estimates approximately 11.2 million households in the United States own an RV. This represents almost 9% of American households, a 62% increase since the year 2000.

With the increased interest in camping, it is an exciting time to be a campground operator. All hospitality market segments are occupancy driven. However, with inflation related factors driving up labor and other operating costs, many owners and operators are facing a significant challenge to maintain profitability.

This leads campground management to revisit some obvious questions that they may have previously explored and rejected due to cost and complexity. Most sites include electricity with 50/30/20-amp service as part of the site fee. The use of electricity can vary significantly depending on the type of camping equipment or camping unit. For example, the same site might accommodate a tenter who only charges their cell phones and listens to a radio compared to the large motor coach running multiple air conditioners, TVs, miscellaneous electronics, kitchen appliances, bathroom fans, lights, a water heater, washer dryer, and more. The average RV uses 20 kWh per day, which is comparable to many apartments, and can be significantly higher during hot or chilly weather.

The cost of electricity is a significant contributor to the operating expenses and the profitability of a campground. Campground operators typically realize ROIs between 10% to 30%. Margins are being challenged by inflationary pressures, as campgrounds seek to minimize price increases to remain competitive while facing rising labor and other supplier costs. Significant increases in energy costs could be the difference between making and losing money for some campgrounds.

One way campground owners can manage their guest’s energy costs is with electricity monitoring. Monitoring the exact energy consumed at each individual site (submetering) has long been an attractive way for RV park owners to control electricity costs. Historically RV parks and campgrounds have only metered their extended stay or long-term camper sites. Why has the industry forgotten submetering for their short term or transient sites? The problem has been the expense and continual labor costs of submetering. Options available for submetering and monitoring use have historically been far too expensive, involved complex installs and equipment upgrades, and locked campgrounds into permanent future expensive monthly monitoring fees or labor-intensive manual readings.

Recently introduced new IoT-enabled technologies, like Vutility’s LoRaWAN-based HotDrops, provide affordable options for campground operators to submeter and monitor all sites no matter what they currently have for site pedestal/electric box infrastructure. Vutility has over 20 international patents on their innovative technology. These patents, developed over many years for use in industrial and commercial applications, are in use by such companies as Boeing, Mitsubishi, and Hyatt.

Vutility is changing the submetering market just as Uber disrupted taxi service by allowing new technology to scale better business models and financial outcomes. HotDrops sensors are self-powered without a battery and do not require hardwiring. The sensors easily install instantly with a literal snap into existing pedestals and wirelessly report the campsite’s usage data over a LoRaWAN gateway (also installed in just minutes).

LoRaWAN stands for “Long Range Wide Area Network” and unlike short-range networks like Wi-Fi, the technology works incredibly effectively to cover large areas like campgrounds and RV parks. The campsite level usage data can then be retrieved, reviewed, or exported at any time by simply logging into Vutility’s web application. Full integrations into leading camping PMS platforms are launching soon! This integration will allow operators to easily charge guests for nightly, weekly, or monthly electric usage.

No meter, no problem! Any pedestal can monitor electricity with Vutility. Vutility allows the conversion of all pedestals, old or new, with or without a meter. Unlike many campground power monitoring systems, HotDrops do not require a pedestal with a meter socket or proprietary electric meter. The patented HotDrops read data directly from the pedestal’s power feed without a meter. This technology eliminates meter reading labor costs, pedestal upgrade costs, and reduces the overall cost of retro-fit submetering projects by as much as 90%.

As camping continues to increase in popularity, submetering at the site-level for all sites can provide campground operators a unique opportunity to temper increased energy prices and potentially increase revenues. This would allow every camper to pay for their own use and spread the costs more equitably amongst campers. Given the advancement of disruptive technologies, campground managers should introduce submetering to all their sites and restructure their pricing model.

This business model can deliver more to the bottom-line and decrease operational costs by utilizing recent technological advancements. Reduced electricity consumption and sustainability advancements align with every campground’s mission and most campers’ preference to preserve the environment and the natural beauty around us.

To learn more about Vutility’s energy monitoring solutions and how to effectively monitor every site please contact David Cohen at Campground Consulting Group.