Summer Camp History, Development and Trends
The modern summer camp industry has its origins in the “mom and pop” resident camps that were established in the first half of the 20th century. During this period, the number of resident summer camps increased rapidly for several reasons.
Summer Camp History, Development and Trends, by Daniel Zenkel
Origins of Traditional Resident Camps
The modern summer camp industry has its origins in the “mom and pop” resident camps that were established in the first half of the 20th century. During this period, the number of resident summer camps increased rapidly for several reasons. First, establishing and operating a camp was far less complex and costly than it is today. Second, lakefront property in remote locations was relatively abundant and inexpensive because it was largely inaccessible. Third, modern zoning restrictions, building codes and environmental regulations that make starting a camp complex challenging and time consuming did not exist.
The resident camp landscape began to change in mid-1970’s. The advent of inexpensive real estate financing combined with the development of the interstate highway system and the growth in second home ownership led to an increase in the value of lakeside real estate. As residential properties were built in the vicinity of camps, the government regulation of resident camp properties increased. Higher real estate values raised the cost of starting a camp. Fewer new camps were built. Existing camps that were not performing either vanished or sold off their land to developers willing to pay more than the going concern value of the camp. Many owners of performing camps also sold to real estate developers as a means to achieve liquidity. Though demand remained strong, the result was a substantial reduction in the number of resident camps. According to a study by the New York State Camp Directors Association, the number of for-profit camps in New York State declined from 480 in 1978 to 328 in 1985, a 31.7% decline. The membership of the Midwest Association of Independent Camps dropped from 56 in 1977 to 38 in 1989, a 32.1% decline. The number of camps in other areas of the country including Maine, New Hampshire and Massachusetts also declined.
Origins of Traditional Day Camps
The development of traditional day camps post-dated resident camps. Although a number of day camps were established in the 1920’s and 1930’s to serve city dwellers desiring to send their children to the country for the summer, most of the traditional day camps that exist today were a product of the post-war suburbanization of America and were established in the 1950’s and 1960’s. During that time, suburban land cost a fraction of what it does today and zoning and land use regulations were far less restrictive. Changes similar to those that had impacted the traditional resident camps impacted the day camps. The value of suburban real estate skyrocketed, land use regulation increased, and underperforming day camps sold out to developers.
The Rise of Non-Traditional Camping
Since the mid-1980’s, the number of non-traditional camps has steadily increased. Most of the growth has occurred in non-traditional day camps and in specialty camps occupying non-camp facilities. The ACA estimates that the number of day camps has increased by approximately 90% over the past 20 years. This growth is attributable to four factors: (i) the relative ease of entry into a business with few capital or regulatory requirements; (ii) the increase in disposable family income due to the dual-income phenomenon; (iii) the increase in divorced families which are more likely to require childcare and adult-supervised activities for their children during the summer; and (iv) the increased parental focus on educational and enrichment programs for children.
The Rise of Professional Camp Management
Until the latter part of the 20th century, it was common for camps to be owned by schoolteachers or professors seeking to earn extra money during their summer vacations. Camp directors and staffers were passionate about their camps, but the economics of camping were insufficient to support year-round management. Moreover, the relative simplicity of the camping business did not require year-round management attention.
As real estate development became a viable alternative to day and resident camping and as the fixed costs of operating such camps increased, professional camp management with a focus on long-term profitability became imperative. Managing the camp for profitability, adhering to regulatory requirements, recruiting campers and hiring staff required the year-round focus of a full-time management team. Summer camp management became a full-time profession.
The Evolution of the For-Profit Camp Business Model
Since summer camps were first established at the turn of the 20th century, family owned and operated camps have dominated the private, for-profit industry segment with camp ownership passed down from generation to generation. Many of these individual “mom and pop” operators were former teachers with little or no business training or the children of such operators.
Over time, some camp industry professionals began to realize that certain fixed costs and management expertise could be more efficiently spread over a larger number of camps. However, a major challenge of consolidating camps is that the campers develop a deeply personal relationship and allegiance to the camp director, who is typically the owner of the camp. If the camp director were replaced, it is unclear if the camp would retain its identity and recurring customer base.
To meet this challenge, an alternative to camp consolidation emerged, the silent ownership of multiple camps by groups of investors. This phenomenon is still prevalent today. Individual investors frequently own varying percentages of several camps, often in the form of limited partnership interests. However, as long as the ownership of all of these camps is not completely aligned, it is difficult to reduce fixed costs and share best practices across camps with overlapping ownership.
The Emergence of CampGroup
CampGroup was established in 1998 and became the first company to successfully acquire and operate multiple camps. The Company acquired its first three traditional resident camps, Danbee, Winadu and Mah-Kee-Nac in April 1998. Between November 1998 and 2005, the Company acquired five more traditional resident camps and a traditional day camp. The initial challenge faced by CampGroup was to enjoy the benefits of multi-camp ownership without sacrificing the individuality of each camp and the personal relationship between the campers and the camp directors. In short, the challenge was to unlock the value of consolidation in a highly personal services industry. CampGroup’s consolidation strategy differed significantly from that undertaken in other industries. In a typical industry consolidation, the acquirer replaces the previous owners, applies a single brand to all of the acquired businesses, and attempts to reduce costs by spreading corporate overhead over an increasingly large corporate footprint. CampGroup, in contrast, retained the owners of the acquired camps and incentivized them to share best practices and maximize the profitability of their camps. CampGroup also retained the original camp names, sought to strengthen their individual brands, and preserved their distinct identities.
The Company found that the key to consolidation in this highly personal service-oriented business was the creation of a knowledge and feedback loop that increases productivity, while maintaining the essential and direct relationship between the director, the staff and the camper. Finally, CampGroup has been able to reduce costs by implementing professional management processes and sharing knowledge across camps. The savings have supported the development of a corporate infrastructure that can serve as a platform for additional acquisitions and growth opportunities.
Since CampGroup’s founding in 1998, a few camp owners have followed CampGroup’s example and acquired one or two additional camps. However, to CampGroup’s knowledge, it remains more than twice as large as any of the other for-profit multi-camp owners.
Today, individuals and families continue to dominate the private for-profit segment. More than 95% of the private for-profit camp owners own only one camp. Many of these owners inherited the camp. These owners typically are skilled at running a camp and working with children and staff but lack business sophistication and financial skills. The remaining 5% of private for-profit camps are owned predominately by groups of investors who own varying percentages of the equity of numerous camps, often in the form of partnership or limited liability company interests. To date, this ownership structure has not succeeded in reducing fixed costs and migrating best practices across the camps because the ownership of all of the camps is not completely aligned.