As Energy Prices Skyrocket, Should Campground Owners Charge for Energy Use?

Memorial Day Weekend, the unofficial start of summer, is just around the corner and spring weather across the country is starting to heat up. As school year’s close out nationwide and the summer season kicks off, families will hit the road for their annual vacation traditions. For millions of American families, at least some of that vacation time will be spent camping. 

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 camping and tent camping. Despite the higher costs, RV ownership and camping have also reached new record highs in recent years. In 2020, the RV Industry Association (RVIA) estimated that around 11.2 million households in the United States owned an RV, representing approximately 9% of American households, representing a 62% increase since the year 2000.

With the increased interest in camping, it would appear to be a great time to be a campground operator. All hospitality market segments are utilization driven, so having a camping season fully booked with reservations is great news at a time where other segments are struggling to return from pre-pandemic occupancy levels. However, with energy prices skyrocketing across the country (as much as double vs. 2022) and other inflation related factors driving up labor and other OPEX cost, many operators are facing a significant challenge to maintain profitability. 

This leads campground operators to revisit some obvious questions that they may have previously explored and rejected due to cost and complexity. Amenities, including campground-wide Wi-Fi (when available), are often included for free, but could easily be converted to specific amenity charge. 

Similarly, many sites include electricity with both 30 and 50-amp service as part of the site fee. The cost to service these sites can vary significantly depending on who the guests are. The same site could have a family in a tent who are only charging their phones and running a fan, or a 40-foot-long RV, with AC, TVs and electronics, a full kitchen and bathroom, water heater, and more. The average RV uses 20 kWh per day, which is comparable to many apartments, and can be significantly higher during hot or cold weather.

The cost of utilities ends up being a significant contributor to the OPEX and ultimately the profitability of a campground. According to a 2016 study conducted by the National Association of RV Parks and Campgrounds (ARVC), the average OPEX for campgrounds was distributed as follows:

• Payroll: 29%
• Maintenance and repairs: 19%
• Utilities (including electricity): 14%
• Property taxes: 10%
• Insurance: 6%
• Advertising and marketing: 5%
• Other expenses: 17%

According to many industry sources, campground operators typically realize ROIs between 10% to 30%. Margins are being challenged by inflationary pressures, as campgrounds seek to minimize price increases, but face rising labor and other supplier costs. Significant increases to energy prices could be the difference between making and losing money during camping season for some campgrounds.

To avoid the risk of increased energy prices and potentially increase revenues, campground operators could introduce submetering to their campsites and restructure their pricing model accordingly. In other property and hospitality industries, billing guests or tenants for their actual energy usage reduces overall consumption by as much as 30%. 

While submetering may sound like a compelling opportunity to de-risk campground operations, the options available for submetering have historically been too expensive and complex to install for them to be viable for this use case. 

Recently introduced IoT-enabled technologies, like Vutility’s LoRaWAN-based HotDrops, provide disruptive options for campground operators to consider. HotDrops install nearly instantly and do not require hardwiring, as they are self-powered and battery-less. 

These labor-reducing and scoping advantages can reduce the overall cost of a retro-fit submetering project by as much as 90%, enabling one multistate RV campground operator to add submetering to several thousand campsites across fifteen states over just a few weeks in advance of the upcoming camping season.

As camping continues to increase in popularity, submetering at a site-level can provide campground operators a unique opportunity to optimize their business model and de-risk their OPEX by utilizing recent technology advancements. These changes can not only deliver more to the bottom-line, but they support decarbonization and sustainability advancements, aligning with every campground’s mission to enable the enjoyment and preservation of the natural beauty around us. 

To learn more about Vutility’s energy monitoring solutions, please visit vutility.com. 

‍