Road travel is becoming increasingly ‘popular’: KOA CEO

Toby O’Rourke, KOA President and CEO, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss travel amid the pandemic and a sneak peak at findings in KOA’s annual North American Camping report.

Video Transcript

KRISTIN MYERS: Welcome back. Well, as Americans are trying to vacation safely, camping and RVing has been getting a boost throughout this pandemic. We've got Toby O'Rourke, president and CEO of Kampgrounds of America, KOA, joining us now. So Toby, as I was just mentioning, I know a lot of folks were getting a little bit stir crazy sitting in their homes. Wanted to get out, go on a vacation, but still be outside, try to do it as safely as possible. So how popular did KOA, did camping and RVing become throughout this pandemic?

TOBY O'ROURKE: Camping had a really big year last year, and that's definitely continuing right into 2021. You know, after some shutdown in the spring last year, there was a lot of cancellations, but then by Memorial Day last year, everybody was back out and camping. And we saw record numbers. Our best year in history was 2019, and we ended flat to that last year. And that all came back in the summer and in the fall. And like I said, headed into this year, our business is already tracking ahead 30% over where it was in 2019.

We estimate over 10 million households started camping for the first time last year. And a lot of other people started camping again after having been away for some time. So like you said, people prioritizing being outside, wanting to do something when they weren't taking other vacations. And camping has really seen the benefit of that.

ALEXIS CHRISTOFOROUS: Toby, you know, I have to say, I'm a little surprised that the numbers are that strong. I would expect strong numbers, but now you've got the vaccine ramping up. You've got airlines now saying that they're seeing businesses ramp up. They're bringing back pilots and other workers. So given the fact that air travel is becoming a little more popular and more people are getting vaccinated and feeling comfortable flying, are you expecting to see a little bit of a pullback in demand for your services there on the campgrounds?

TOBY O'ROURKE: Well, we haven't seen evidence of that yet. Our advanced deposits as of right now for future reservations are 55% over where they were in 2019. There's still strong demand for camping. I always believe once people get a dose of camping and getting an outdoor vacation, they enjoy it. And they want to keep doing it. So I think a lot of these new people that came to camping last year are absolutely going to continue camping this year. They might add in other forms of vacation. But they'll at least get out. 48 million households camped last year. And we're going to see a large portion of those people back this year. And I expect it to actually increase.

KRISTIN MYERS: Toby, I'm going to be completely honest with you. My father dragged my family around camping all the time when I was younger. And I hated it. I'm not going to lie. I absolutely hated it. But throughout this pandemic, I started getting outside more and more. And I started to realize why he liked camping so much when we were-- when I was much, much younger.

Curious to know, as you're bringing in so many more new people or having even people return back to camping, if you plan on making some changes, maybe even some innovations to your campgrounds, to really appeal to this wider audience. I don't know if you plan on doing glamping, for example, having Wi-Fi setups for people to work from the campground. What's going to change moving forward?

TOBY O'ROURKE: Well, all that suspended motion, it has been the trend in camping for the past few years. We actually have a lot of ways to camp at KOA and all private campgrounds. You can camp by tents, which you're pitching your own tent. But then absolutely glamping is increasing popularity. A lot of our campgrounds have canvas tents, for example, or treehouses or unique ways to stay. And we're pretty proud of what we call our deluxe cabin product that says all of the things you would expect from a hotel stay-- bathrooms, maybe kitchens, TVs-- but you have the outdoor environment as well. And you can have all those comforts, yet still have a campfire and still be outdoors.

So some of these more unique products in the lodging area are suiting the needs of the new camper that is emerging. But I will tell you, RV sales were through the roof last year. And they're anticipating those to continue this year. We estimate over 2 million households bought RVs last year. And 25% of all campers are in an RV. So it's becoming a more and more popular way to travel. And it's really spiking among the younger generations, the millennials and even Gen Z being attracted to this freedom of being on the road and being able to do something different.

ALEXIS CHRISTOFOROUS: What about where people are going to do their camping? Are you seeing folks flock to any particular areas within the country?

TOBY O'ROURKE: The national parks are always popular. Those are always prime locations for camping. And our KOAs around the parks are always very, very busy. They had a big year last year. And they're already booking up this year, as well as the national park campgrounds. It's really hard to get a site sometimes because there's so much demand.

But really, there is a place to camp close to home. We see actually most people, 70% of people camp within 100 miles of their home. There's a lot of places to camp from public lands to private campgrounds like KOA. And you don't have to drive across the country for a big vacation. You can have a two, three-day weekend close to home. And that's what a lot of people do for most of their camping.

KRISTIN MYERS: Now, Toby, I know that it's Kampgrounds of America, and you are based here in the United States, and also some destinations in Canada. I have also visited KOA campgrounds in Canada, I will admit, in my lifetime. Would there be any plans at all to expand perhaps internationally, especially as you are seeing, even in Europe, folks saying, hey, I can't travel to another country. I'd have to stay within my own country's borders. Would that at all be something you're interested in doing going forward?

TOBY O'ROURKE: Yeah, absolutely. KOA has had an international presence at various times in our 60-year history. We actually used to be in Japan, believe it or not, and had some campgrounds in Mexico as well. Right now, we are in the US and Canada. And we're currently focused on more of a domestic strategy. But camping is very, very popular. Asia, China, Korea, those nations are getting into camping, and those are big expandable markets. And also for the RV manufacturers are investing in those markets.

But the European nations, camping is very, very popular there, and Australia. So you're right. I think that that-- there's definitely potential for our brand to go international, although we're not actively working on any projects at the moment. But there's definitely potential there for us.

ALEXIS CHRISTOFOROUS: Are you looking at any-- because business, as you say, has been booming now. Are you looking at making any meaningful acquisitions or expanding in that-- your footprint that way?

TOBY O'ROURKE: We are. We absolutely are in the midst of that right now. We are primarily a franchise business. Of our 525 parks, 500 of those are franchisees. And we're always looking to convert more campgrounds in. And the other big thing we're seeing is people are building campgrounds, which hasn't been done in quite some time. So there's a lot of people building. We're attracting those to our system. And then we own between-- about 40 parks ourselves and are looking to expand and have actually closed on for deals this past quarter. So we're growing. Our franchise system is growing. And business is looking very good.