Two parks on my list, one sells nights and one sells seasons. Which revenue mix would you rather underwrite?

The number I'd want from Park A before anything else is the nightly rate by week, not the annual average of 62. Destination parks often have four or five weeks doing enormous rate and the rest doing very little, and a 62 dollar blended average can hide a 95 dollar peak and a 38 dollar shoulder. If that's what it is, your pricing power argument is really a pricing power argument about five weeks, and those weeks are already full. You can't sell more than 58 sites on a Saturday in July.

Same test on B in reverse. I'd want the seasonal contracts sorted by start date, because a base that all renewed in year one and has never been repriced isn't the same asset as one where a third of the sites turn over annually at market. The flat monthly rate you're admiring might be a rate nobody has touched in six years, which is either your upside or your reason the base holds, and it can't be both at once.

I own something closer to B and I'll give you the erosion story since you named it.

Bought 46 sites, 30 of them on annual contracts, the rest overnight. Two years in I'm at 24 annual and it wasn't a decision I made. Four left because they bought property, two because I raised rate, and I've had trouble replacing them at the number I want, because the people shopping annual sites in my market are comparing me to a park 12 miles out that's cheaper and worse. So my occupancy in the 70s is now occupancy in the low 60s with more overnight churn than I planned for, and overnight is a different job. Cleaning, check ins, phone calls at nine at night.

What I'd tell you about B is that the flat expense line only stays flat while the base holds. The minute you're replacing seasonals with nightly you inherit A's labor problem without A's rate. So ask what the base has actually done over three years, count by site, not by percent of revenue.

pike is right that the repricing history matters. Mine had none and I read that as room to grow. It was closer to the reason they stayed.

Reading this as somebody still deciding what I'm even trying to buy, the thing that jumps out is that A and B aren't the same job. One is a hospitality business with a land component and the other is closer to a rental operation that also sells nights.

So I don't think I can vote on the revenue mix without knowing which of those two I'd be any good at. Twenty weeks of intensity and then four months off would suit some people enormously. It would wreck me, because I'd spend the off months doing nothing and the on months doing everything badly. B's flatness looks boring on paper and boring is what I'd actually execute.

bramble, do you know which one you'd rather do on a Tuesday in August? Because the numbers you posted are close enough that I'd expect the answer to come from that and not from the spreadsheet.

I'm new to this so most of this thread is above me, but can somebody explain the four month dead period part. If Park A closes for four months, does the mortgage payment just stop, or is the operator supposed to have saved the summer money to cover the winter. That seems like the whole difficulty and I don't understand how it's handled.

rigging, the payment doesn't stop. You bank the season and spend it down over the winter, and every seasonal operator I know underestimates how much of the season gets eaten by things that only show up in the season.

Which is my actual point for bramble. I do renovation work and the four closed months at Park A aren't free, they're your entire capital works window. Water lines, pad regrading, electrical pedestals, bathhouse work, all of it has to happen between closing day and opening day, and if the ground is frozen for half of that you have a six week window to do twelve weeks of work. I've watched a small park try to redo 20 pedestals in a shoulder season and open two weeks late, which on a 20 week season is ten percent of the year's revenue gone before the first guest arrives.

Park B lets you do work in September on a Tuesday while 40 sites are still occupied and nobody notices. That flexibility is worth real money and it never appears on an income statement.

So when you underwrite A, put a number on the off season construction window and ask what the last three years of deferred work actually was. If the seller has been pushing infrastructure down the road because the window is tight, you're buying the backlog too.

Managing both types, the labor difference is bigger than your staffing counts suggest. Park A at 58 sites with 90 percent July occupancy is turning something like 50 sites a day on a busy weekend. Every one of those is a reservation, a payment, a gate code, a question about the dump station, and a cleaning cycle on the shared facilities. Three seasonal staff for that is thin unless the manager is on site and working the desk, and seasonal staff in outdoor recreation markets are hard to hold, especially where there's no housing. Ask whether the park has staff housing, because a park with two employee sites is a completely different hiring problem than one without.

Park B with 70 percent contracts is a maintenance and relations job. Fewer transactions, but you're now living next to your tenants and the disputes are slower and more personal. Somebody's dog, somebody's fence, somebody's guest parking.

harrow's point about the works window is the one I'd underwrite hardest. On the nightly park I never had a good time to shut water off. On the seasonal park I could do it on a weekday morning with a notice on the doors.

We do service work for parks on both models and the billing pattern tells you something about the businesses.

On nightly destination parks we get called in April with a list and an opening date, and the whole scope has to land before the date whatever it costs. Rush pricing, overtime, whatever gets it done, because a week of July nightly revenue is worth more than the premium. Then silence until the following spring.

On seasonal and annual parks the work spreads out and we're cheaper to them because they can wait for us. They also spend less overall, partly because they can defer, partly because a long stay guest tolerates more than a family who paid 95 dollars for a Saturday and expects the bathhouse to be spotless.

So I'd add an amenity standard line to the A underwriting that isn't in the trailing numbers. If a park has been trading on reputation and reviews, keeping that reputation costs money every single spring, and it doesn't scale down when you have a bad season. That's the asymmetry I'd worry about with A. Bad summer, same spring bill.

Voting for mixed, and I'll say why even though it looks like the coward's answer.

Everything in this thread describes two failure modes that are each survivable on their own. A blows up when one summer goes wrong. B erodes when the base doesn't renew and you find yourself running an overnight business with an overnight cost structure and B's rates, which is quarry's story. A park with a real seasonal base and a real overnight season has a floor under the debt and a ceiling that isn't fixed.

What I don't know is whether the mix is stable or whether one side always eats the other. If your best sites go to annual contracts, you've taken your premium nightly inventory off the market at a flat monthly rate, and your overnight business is now selling the leftovers. trellis, is that how it plays out in practice, or can you actually hold back the good pads for nightly and keep the seasonals in a separate loop of the park?

plumb, the mix cannibalizes unless the site plan physically separates it, and most small parks weren't laid out with that in mind. That's a survey question, not a strategy question.

On the vote, I'd underwrite A and I'd underwrite it lower than the seller does. Here's the mechanical reason. A destination park's value sits in rate, and rate is the one line I can move without the market's permission. Occupancy in July is already 90, so there's no volume upside there, but 62 blended against a comparable park's 78 is a gap I can test in a single season with almost no capital. If it holds, that's real. If it doesn't, I learn in twelve months and I've spent nothing but a booking engine change.

B's upside is contract rate growth and that requires the tenant's consent, one at a time, against a cheaper competitor 12 miles away. I can't force it and I can't test it cheaply.

The cost of that view is coverage. A four month closed period means my debt service coverage has to be sized on the season, and I'd want a lender who's actually underwritten a seasonal park, plus real reserves, and I'd get the seasonality treatment confirmed in writing before I got attached to a number. Some lenders will spread it, some will size on a stressed season, and it changes what price works.

What would move me off A is harrow's works window. If the deferred infrastructure list is long and the ground is frozen half the shoulder, my rate experiment happens in year three instead of year one, and the whole case was that I'd learn fast.