February 25, 2020
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We’ve all heard the words dynamic pricing and most of the time when I mentioned that to a campground owner, I see a look of fear in their face or a disturbed look of, no, we can’t do that. Let’s back up for a moment and I’ll ask you to keep an open mind for a few moments and discuss what dynamic pricing really is. Dynamic pricing by definition is just basically a change in price based on dynamic market conditions. So if you are in a tourist destination, you have a high season and low season, most likely there is no reason that you shouldn’t be able to take advantage of that in those times when your campground is fully occupied or very heavily occupied, your price should be higher than at those times when you have a lot of supply, but little demand. So the laws of supply and demand have been going on since the early ages.
There’s no reason that campgrounds and RV parks are exempt from it. The world in the United States here revolves around supply and demand. So rather than fight it, hop on board. So let’s take a look. The dynamic pricing models have been run rampant in many industries, but the campground industry has been very slow to adopt. This will be a key to helping you sell your campground in someday and also being more profitable today. So I highly suggest that you look at how dynamic pricing can really help you. It is not an evil thing. You’re not taking advantage of people by utilizing supply and demand pricing. So we all know, and you’ve all heard the stories, hotels have been doing it for years. Airlines have been doing it for years. Even many places like restaurants, they run discounts and coupons come in on Monday night when we’re slow and we’ll give you something for free.
We’ll lower our price. So this has been going on for the longest time and people understand it and expect it. Now, I know that many of you are averse to having someone come to your campground and not being 100% thrilled and you get really scared when somebody questions your pricing or pushes back in the slightest way. I’m here to tell you that’s a fact of life and you need to get used to hearing people say, Oh, it’s that much that happens everywhere. Many people are psychologically testing you to see if you truly believe in your own pricing. I encourage you to look at your pricing models and take some flexibility in there. You can take small steps, you can take large steps, but take that step and look at how dynamic pricing can affect your business. I highly encourage it and have seen campgrounds have a 15 to 20% increase in their bottom line revenue right off the bat by simply implementing some easy steps for demand pricing. Then it’s also dynamic pricing. There are many names for the model, but ultimately it’s dealing with supply and demand. So if you have questions about how dynamic pricing can work or why you think it might not let’s talk about
Donna Bordeaux, CPA with CampgroundAccounting.com
What happens when you send two CPAs out into the relaxing outdoors to camp? You get CampgroundAccounting.com. Donna and Chad have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They camp and travel across the country every chance they get, so it’s just a natural fit that they focus their CPA skills on helping campground owners throughout the USA grow their businesses and minimize the impact of taxes. They understand the key performance indicators and specialized issued that face RV park owners every day.