Re: Why do they call it a motorhome -- a different look at RV rental pricing

Hey Kevin,
Great article and appreciate your input!! Let me ask you, do you believe in your experience that Nov/Dec through Apr 1 its the slowest time of the year for the southwest part of country? Or do you think we're ok with all the events that come throught the valley of the sun and pricing should be somewhat higher then say Aug-Nov?
Thanks,
Donn

Re: Why do they call it a motorhome -- a different look at RV rental pricing

Donn,
Good question. I would think that some of our dealers in Arizona and Nevada would be in a better position to answer that question then I would be, but I would say in general yes. However one advantage that rental operators have here in the Phoenix area is a plethora of events that happen in the winter months to augment the normal rental season. In the Phoenix area we enjoy two NASCAR races between November and April, lots of sporting events both professional and collegiate as well as countless festivals. As far as revenue management goes I would say that if you offer a reduced rate in the winter months when bookings are slower then you will want to exclude the NASCAR weeks in order to preserve a higher margin when you are able to get it. So my thought would be to offer a winter season rate schedule but just exclude those dates that are likely to be high traffic periods. What do other dealers have to say on this matter?

Re: Why do they call it a motorhome -- a different look at RV rental pricing

I'm not a big believer in seasonal adjusted rental rates. I have trouble envisioning people deciding to rent an RV in December simply because it's one third cheaper than in the summer.

I believe our rates are fair and that includes for the summer and winter months.

My San Antonio location has tapped into the bar-b-q and chili cookoff crowd, trail rides and long term rentals for people building a new home or rebuilding after a fire or some other disaster.

We do a lot of business in December but it all comes the week of and the week after Christmas. I don't believe a lower rate is going to prompt more rentals for the first two weeks of November or, for that matter, the month of January.

Our Denver location does offer seasonal rates but it doesn't seem to help. They do it only to stay competitive in that market. There are just no compelling reasons for customers to rent and RV when there's a foot of snow on the ground.

Of course, everyone has their own opinion and they may all be right. I just find it easier to keep up with a single rate structure for the entire year and to spend more time trying to develope more winter time business.

Re: Why do they call it a motorhome -- a different look at RV rental pricing

Steve makes a good point in focusing in on what criteria his customers consider in renting a motor home. I know that the customers in my market, L.A., assume that off seaon has "off rate" pricing. They're used to this pricing practice in renting cars, hotels, boats, ATVs, condo's and other vacation rentals. So, if I did not have seasonal pricing, the perception would be that I would be charging them peak season prices in the off seaon, or "sticking it to them"! I'd most certainly be losing a lot of business I might normally capture by following a more standard industry practice. Impressions and assumptions are everything in market where many customers are often uneducated in good RV rental business practices.

Seasonal rates

I have been in the RV rental business in San Jose, CA. since 1985. I have always had a computerized rental rate program that has seasonal rates, daily, weekly and monthly rates that ties in with mileage discounts. I do not print a hard copy rate sheet. The printed literature I have does not have prices just models and features with other marketing material. I have prices on our file server that automatically updates on the internet and is modify as needed depending on supply and demand. I believe it is important to be able to change quickly as the market changes. We rent travel trailers, toy haulers, Class A, C and B motorhomes. Alan Cezar

Re: Seasonal Rates

Donn, here you just heard 3 different opinions from 3 experienced rental operators. Steve, Martin and Alan all have run successful rental businesses for a long time. Martin I have a question for you. You commented that you feel that if you didn’t offer some sort of off-season discount that you would be perceived as out-of-sync with the market. One advantages of demand pricing is that it is suppose to bring new customers into the market that normally would not have rented. Is that your experience? Are you seeing customers who rent in the winter who are motivated simply by price?

Re: Seasonal rates

I believe that most operators, like Alan and me, believe in and use seasonal priciing. Demand pricing or flex pricing, is the next evolution in our pricing systems that is much more repsonsive to our customers demands. Our customers expectations are definitely changing every year. I definitely see a change in winter (off peak season) renters, as an example. With most kids now attending school year round, to get the better GPA's required by many colleges, the traditional one & two week rentals are becoming more rare. Replacing them are several short, get away, trips spread throughout the year, sometimes one ot two nighters. These "get aways" cumulatively are more expensive that the traditional week in the summer, and no one wants to pay the normal 3 night min charge when they are only going out for 1 or 2 nights. So, yes, the off seaon renter is definitely more of a price shopper than those that rent during the summer. Now, are new customers coming into the market because of demand pricing, my answer is no, I don't see that. New customers are coming, but in my experience it's more because of advertising and friends rather than pricing.

Re: Why do they call it a motorhome -- a different look at RV rental pricing

I have been in the RV rental business for 32 years. I have served on the board of directors for the RV Rental Association (RVRA) and participated in a rental group 20 for six years. In 1992 the company I worked for developed rental software and later we sold many copies to dealers around the country. I also conducted a class at the RVDA EXPO fo five years titled "How to start and operate an RV rental company"
In all the conversations with rental dealers around the country including visits to their dealership to set up software and my time spent with dealers in my group 20 my opinion in a nut shell is that RV's rent when the kids are out of school. The northern states about 12 - 14 weeks per year and the southern states about 16 - 18 weeks per year. The southern states have more weekend activities and much better weather. Of course there are a few exceptions such as rental companies that have a Nascar track close by, but in general the number of weeks stated above generally holds true throughout the country.
We define true summer as Memorial day weekend to Labor day weekend and during the past 15 years we have been computer tracking rentals and have found that the average summer vacation has dropped from 14.5 days to 6.2 days while winter (off season?) has only moved from 2.7 days to 2.5 days. There are two main factors affecting this change; local big business like Microsoft, Boeing and others encourage now their employees to take shorter and more frequent vacations and the second factor is the big slow down in european travelers over the past five or so years. Now that the US dollar has devalued we are seeing a tremendous increase in requests from european travellers.
Pricing is trickey, you need to do what is proper for your part of the country staying in line with your competition. One thing about pricing is if you have the newest and cleanest fleet and the best service then you should be the highest price in your area. Don't worry about being the last to book up as you will still get your average number of weeks as stated earlier and make more money.

Re: Why do they call it a motorhome -- a different look at RV rental pricing

I have been in the RV rental business for 32 years. I have served on the board of directors for the RV Rental Association (RVRA) and participated in a rental group 20 for six years. In 1992 the company I worked for developed rental software and later we sold many copies to dealers around the country. I also conducted a class at the RVDA EXPO fo five years titled "How to start and operate an RV rental company"
In all the conversations with rental dealers around the country including visits to their dealership to set up software and my time spent with dealers in my group 20 my opinion in a nut shell is that RV's rent when the kids are out of school. The northern states about 12 - 14 weeks per year and the southern states about 16 - 18 weeks per year. The southern states have more weekend activities and much better weather. Of course there are a few exceptions such as rental companies that have a Nascar track close by, but in general the number of weeks stated above generally holds true throughout the country.
We define true summer as Memorial day weekend to Labor day weekend and during the past 15 years we have been computer tracking rentals and have found that the average summer vacation has dropped from 14.5 days to 6.2 days while winter (off season?) has only moved from 2.7 days to 2.5 days. There are two main factors affecting this change; local big business like Microsoft, Boeing and others encourage now their employees to take shorter and more frequent vacations and the second factor is the big slow down in european travelers over the past five or so years. Now that the US dollar has devalued we are seeing a tremendous increase in requests from european travellers.
Pricing is trickey, you need to do what is proper for your part of the country staying in line with your competition. One thing about pricing is if you have the newest and cleanest fleet and the best service then you should be the highest price in your area. Don't worry about being the last to book up as you will still get your average number of weeks as stated earlier and make more money.

Re: Why do they call it a motorhome -- a different look at RV rental pricing

We are an RV Rental Dealer in Northport, Alabama and have been in business now for 4 years. I do agree that more renters are renting for shorter periods of time now then they used do. However, because we are located in the south where it is very hot and humid in July and August, those months that the kids are out of school, it does not seem to help get more business because they are out of school. In fact, July and August are our slowest months during the whole spring, summer and fall seasons, and we think it is because of the extensive heat. It seems our best months are spring and fall, and we do have many different rates for different seasons, holidays and events in the area. However, we are struggling with getting enough traffic to our location, and most people in the area still do not even know that we exist. I feel, from my experience, that advertising, discounted pricing for different seasons and word of mouth are the 3 most important things when running an RV Rental business. I did want to ask any of you that does have experience with RV Rental companies, what your best strategies and ideas are for getting RV Owners to put their RV's on our fleet management program. That seems to be our biggest obstacle, in which we really do need more RV's on our managed fleet to offer to our customers in this area and to lower our existing overhead. Any advise would be very appreciated. Thank you.

Re: Why do they call it a motorhome -- a different look at RV rental pricing

Carrie, how many units do you have now? What sizes & Class, roughly? What is your typical rental customer like? I can give you some ideas that work for me if you can send me this info. Or email me at mronken@pacbell.net.

Re: Why do they call it a motorhome -- a different look at RV rental pricing

Is now a good time to start an RV rental business ? Would appreciate some input !

Re: Why do they call it a motorhome -- a different look at RV rental pricing

Mr. D. How is a perfect time to get into the rental business. Here is an article off of our website that illustrates