Thursday, Oct 16, 2014 at 08:53
The reason many of these
showgrounds offer cheaper prices is due to the fact that they are not meeting the same requirements and standards required for a caravan park. It is not unreasonable that caravan parks voice an opinion about the unfairness of this – that is the beauty of Australia, everyone is entitled to a viewpoint.
Putting that aside though, the argument used increasingly these days is that many RVs are fully self-contained and don’t require all the “add on facilities” but the reality is that caravan parks are either required to provide them or need to provide them to attract a broader custom.
It is difficult to “carve out” the bits that self-contained RVs don’t want or need – in fact there are instances where this has been mooted, but government regulations have stifled it.
But it does highlight an issue that needs to be resolved…
And don’t forget, wherever you stay someone needs to provide the land, which is usually rateable by the local council, plus there is the cost of capital employed to provide and maintain it, regardless of the level of
services provided. And if it is council land, the ratepayers fork out for the cost, and that includes the local caravan parks.
Whilst it is easy to use the “throw-away” line that caravan parks are rip-offs and profiteers, it is mostly uninformed discussion as many making those statements would have no idea of the costs associated with running a caravan park.
Seemingly, many are estimating the cost of what should be charged to be based on their own individual travel budget, not what it might actually cost someone to provide the service.
This may actually be a case-in-point that in Inverell the cost of providing the sites in the showground is now similar to the local caravan park.
Perhaps we shouldn’t be surprised with that outcome given the Showground Trust has had to spend the capital to bring it to a standard commensurate with those that the local caravan parks are required to meet by law.
My interest in this topic is that I want to see that caravan parks survive as they are important part of the accommodation landscape in Australia – the risk is that in time,
free camp or low cost sites in close proximity to towns will disappear from over use or closed down by councils. If we hound caravan parks out of business in the meantime, accommodation options for many will disappear.
Who is that most likely to affect – those seeking the travel lifestyle, especially in retirement.
And to be clear, there is nothing wrong with free or budget camping, if it is available, but there is increasing evidence that many communities are becoming less supportive as the economics of providing it are not stacking up against the income it generates for the community as a whole.
And for sure, the cry goes out along the grapevine to “avoid this town or that town” because of the non-provision of low cost or
free camping, akin to the playground days of old when someone took the “bat and ball” and went
home because they didn’t get their way – and often at the cost of missing out on other attractions that the area may provide.
The term “cutting your nose off to despise your face” comes to mind…
One local business owner in a small town I visited recently suggested that if they had a dollar for every complaint it received from the travelling public about the prices it needs to charge to remain viable and provide an important service, they would get far richer from that than selling goods in the
shop!
Everyone wants value for money, but just remember it all comes at a cost…
Cheers, Baz – The Landy
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Follow Up By: bks - Thursday, Oct 16, 2014 at 11:10
Thursday, Oct 16, 2014 at 11:10
Excellent summary of the situation.
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Follow Up By: Alan S (WA) - Thursday, Oct 16, 2014 at 11:38
Thursday, Oct 16, 2014 at 11:38
Very
well said Baz, and i believe balanced and not controversial.
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Follow Up By: Steve in Kakadu - Thursday, Oct 16, 2014 at 12:23
Thursday, Oct 16, 2014 at 12:23
Yeah Baz some of these people that what to whine about the cost of this that or the other, have no clue to the cost involved in setting up a business for their convenience.
I had an employee once that wouldn't take direction and wanted to reinvent the wheel in regards to my business, I told him if he didn't like the way my successful business was run, that he could go and spend a quarter of a million $$ and start his own, he looked at me quite surprised and said does it cost that much to start up a business like this, I said yeah and that is just getting it of the ground.
So lets look at the cost of a caravan park, these quotes are a educated guesstimate, I don't own one but I own my own small business so I have an idea of the sort of costs involved.
1: purchase of property this could run into the millions.
2: Insurance public liability 10s of thousands of $$ add a pool and a playground and that will sky rocket, workers comp thousands of $$ general insurance thousands of $$.
3: Wages a minimum of $1000 per week per employee 9% super, over time, holiday pay.
4: Most have a convenience
shop that needs stocking.
5: Ground maintenance, pool maintenance, building maintenance, perhaps other types of accommodation which needs maintenance.
6: Electricity, rates, and other utilities.
7: Advertising, paying agents a commission etc.
These are just the obvious costs to start with.
All this for just $28 per night, some people just need to get on the reality train or just stay at
home.
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Follow Up By: Alan S (WA) - Thursday, Oct 16, 2014 at 13:32
Thursday, Oct 16, 2014 at 13:32
Steve
I read a recent article unfortunately can't remember where, but it reported that the average capital cost of developing a caravan park is in the region of $40K to $50K per site. A lot of this is requried to provide thisngs such as ablutions, sewerage/septics, power reticulation, office , garden ect
And based on this and a average occupancy of 50% per year, a breakeven accomodation cost is $45 per night.
Olbviously established parks carry a lower capital cost but this gives some idea of rate of recovery required just to break even.
And as you say $28 per night some people need to get on th ereality train.
Alan
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Follow Up By: Steve in Kakadu - Thursday, Oct 16, 2014 at 22:13
Thursday, Oct 16, 2014 at 22:13
Ok just a quick follow up, I have just returned
home from the school swimming carnival, I was talking to the manager of the biggest caravan park in
Jabiru, mind you it is 1 of two.
Here are a few facts that these rip off van parks have to pay so that people can complain about.
1: this park has 180 sites, 25 cabins, pool bar and bistro.
2: turn over this year $3,000000.
2: water bill for 6 months ( wet season for the other 6 ) $ 100,000.
3: power bill per quarter $60,000 ( $240000 per year)
Wages $ 1000 plus tax super holiday pay workers comp insurance per week per employee X 25 employee's. ( $1,560.000 ) per year
4: plus all in the above post not mentioned here.
5: profit $250,000 that equated to about 8% return.
This property has a sister property at the
South Alligator river, their fuel bill for the generators is $40,000 per month, this park hasn't returned a profit in 4 years, greedy bastards they are.
Just sayin.
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Follow Up By: Bazooka - Friday, Oct 17, 2014 at 17:53
Friday, Oct 17, 2014 at 17:53
We've been down this road before but I'll simply restate what I'm sure I've said previously.
1. Some CPs may be (are) gouging given prices, the state of their facilities etc, many (most?) probably aren't given their investment. They simply don't suit all travellers for a variety of reasons, many of which have been mentioned in this thread. People shouldn't be herded into them as a result of some vague notion of an even playing field. Choice and "societal benefits" (to both travellers and local communities) ought to have as much weight as "competition".
2. The fact that a business sets up should not determine policies to attract other custom to a town, particularly where a council run facility already exists. Otherwise we'd have hotel owners driving CPs, taxis chasing public transport, etc, out of town. Due diligence will tell you the risks. But we all know how business works - the less competition the better. We've seen it in other areas where tourist operators end up with "special" rights - prices skyrocket and people with less disposable income are frozen out. It's take our tour or nothing.
3. Different markets cater to different requirements and demographics. A place to park for a small number of travellers for a limited period (!), water and a toilet/
dump point - no power, no shower, no washing facilities - shouldn't be a great burden on many precincts.
4. Basic requirements - particularly dump points - should be part of our national
infrastructure, not an optional extra. Little difference, if any, between a
dump point and
public toilets.
5. The notion that travellers don't contribute and ratepayers bear the load of basic facilities is generally untrue.
Showgrounds etc already exist for other reasons and are presumably of value to their communities at various trimes of the year. Driving potential visitors away certainly will not help.
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Follow Up By: Steve in Kakadu - Friday, Oct 17, 2014 at 18:34
Friday, Oct 17, 2014 at 18:34
My point Bazooka is not that you should be herded into them, my point is that for those that say $28 a night is a rip off, these
places don't run on fresh air.
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