Latest / The Buyout Show with Fexingo: Private Equity, Roll-Ups, and Business Acquisitions / How Private Equity Is Buying Up RV Parks and Campgrounds
Transcript
- Lucas: Let's start with a number: $7.8 billion. That's the amount private equity firms have poured into RV parks and campgrounds since 2023, according to PitchBook. Luna: Seven point eight billion for camping? That's way more than I would've guessed. I think of campgrounds as mom and pop businesses. Lucas: Right, and that's exactly why PE sees an opportunity. Most are independently owned, often by aging owners looking to exit. But the underlying economics are surprisingly good. A typical RV park generates net operating income margins of 40 to 50 percent. Luna: Forty to fifty percent? That's better than a lot of software companies. Where do those margins come from? Lucas: Low cost structure. You need land, water, electric hookups, sewer, and a small staff. No inventory risk. And once you've paid for the land, your cost base is mostly fixed. Add to that steady demand from the boomer demographic — millions of retirees with RVs and time on their hands. Luna: But isn't it seasonal? Most of the country is closed from November through March. Lucas: That's the knock, but PE firms are getting clever. They're adding long-term leases for snowbirds — people who stay for months — and building amenities like cabins and glamping sites that work year-round in warmer climates. Plus, they're using dynamic pricing similar to hotels. Luna: So private equity is basically applying hotel revenue management to a KOA. Who's doing this consolidation? Lucas: Several firms. Bain Capital has a platform called Camping World Holdings, but more directly, GTCR launched Evergreen Outdoor Resorts in 2025 and has since acquired over 30 parks across the Sun Belt. They're targeting independent operators with, say, 50 to 200 sites. Luna: What happens to the experience for campers? I imagine prices go up. Lucas: That's the trade-off. Sites that used to be $30 a night are now $60 or more at pe owned parks. But the owners argue they're investing in new sewer systems, upgraded Wi-Fi, and better facilities. The value prop for customers is more consistency across locations. Luna: I can see the appeal for investors — land is a hard asset, and camping is one of the few travel segments that grew during the pandemic and kept growing. Lucas: Exactly. And the land itself appreciates. Many of these parks sit on valuable real estate near national parks or growing suburbs. Even if the business breaks even, the asset value can double in a decade. Luna: But some towns are fighting back, right? I've read about local ordinances limiting new RV parks or opposing buyouts. Lucas: That's a real headwind. In areas like Colorado and Florida, municipalities have imposed moratoriums on new development. But PE firms are mostly buying existing parks, not building new ones. It's less controversial than a new housing complex. Luna: So the play is: buy mom and pop, institute professional management, raise rates, and then sell to a REIT or another PE firm down the line. Lucas: That's the standard exit. Some might even take a platform public if they get big enough. But the real story is that private equity is making a direct bet on the American road trip. And it's working. Luna: You know, that kind of steady, asset-backed cash flow is exactly why a small group of listeners keeps this show ad-free. A handful chip in monthly through buy me a coffee dot com slash fexingo, and that funds deep dives into these niche consolidation stories. Lucas: Yeah, it's a lightweight way to support independent coverage you won't get from the big finance outlets. And we're grateful for every one of those contributors. Luna: Absolutely. So back to the campgrounds — do you think we'll see a mega-merger of these platforms, like a 'Camp REIT'? Lucas: I think it's inevitable. You already have Sun Communities, which is a publicly traded REIT that owns mobile home and RV parks. Private equity might assemble a competitor and then IPO it. There's precedent in self-storage — that industry consolidated the same way. Luna: What about recession risk? If the economy slows, people might skip the RV trip. Lucas: Actually, data from the last recession shows that RV parks held up reasonably well because 'staycations' within driving distance replace costlier vacations. Gas prices matter, but many RVers are retirees with fixed incomes and time flexibility. Luna: So it's a contrarian bet: outdoor hospitality as a defensive play. Lucas: Exactly. And given the amount of capital coming in — $7.8 billion and growing — this isn't a fad. It's a structural shift in how campgrounds are owned and operated. Luna: Alright, next time I pull into a campground with fancy new Wi-Fi and a reservation system, I'll know who to thank. Lucas: Or blame, depending on your nightly rate. But that's the trade-off in this model.