RV Park Valuation: RevPAR, Seasonality, and the Numbers Lenders Actually Believe
RevPAR by site type, seasonality normalization, and the lender-defensible cap rate.
The Hybrid Valuation Problem
RV parks are neither real estate nor hotels — they are operating businesses with a real-estate component, and that hybrid status drives every valuation question. Pure-real-estate apartments trade at 5–7% caps. Limited-service hotels trade at 8–11% caps with EBITDA multiples. RV parks split the difference: most parks trade at 8–11% caps, but the underlying NOI calculation has hospitality-style volatility that lenders price into their cap-rate quote.
Within RV parks, the spread is wide. A destination park on the Florida coast with 40% long-term residents trades at a 6.5–7.5% cap. A transient-only park in a non-destination market trades at 9.5–11.0%. The differentiator is income stability — long-term residents and base-load occupancy compress cap rates because they look more like real estate; pure transient looks more like seasonal hospitality.
Getting the cap right starts with understanding where the park's revenue actually comes from.
RevPAR by Site Type
Treat each site type as its own line of business. Transient RV sites (nightly, weekly) generate the highest per-night rate but lowest occupancy — typical RevPAR runs $25–$45 per available night across the year, weighted heavily by peak season. Long-term RV sites (monthly, annual) generate the lowest per-night equivalent but stabilized 95%+ occupancy — RevPAR runs $20–$30 per available night at full occupancy.
Tent sites have the lowest revenue per site but the highest margin. Cabin and glamping sites generate hotel-equivalent rates ($120–$280/night peak) but require hotel-equivalent operating costs. Each segment has its own occupancy curve, expense ratio, and cap-rate sensitivity.
A defensible valuation builds the income side bottom-up: segment by segment, rate by rate, occupancy by occupancy. Then it reconciles to the trailing-12 actual. Discrepancies above 5% need explaining — usually they trace to over-stated occupancy, mis-categorized site mix, or revenue from non-recurring sources like one-time event hosting.
Seasonality and Peak-Concentration Risk
Most RV parks earn 60–75% of their annual revenue in 4–6 months. That seasonality is a financing constraint: lenders apply higher reserves and lower leverage to parks where summer represents more than 70% of revenue, because a single bad summer can wipe a year's NOI. The right underwriting normalizes the trailing-12 against historical seasonality and stress-tests the peak.
A defensible model breaks the year into peak (highest 3–4 months), shoulder (next 4 months), and off-season (remaining months). Each gets its own occupancy assumption, each gets its own rate assumption, and the model re-aggregates to annual. This catches operators who have over-stated peak by attributing revenue from special events or rate increases that are not sustainable.
The other seasonality watch-out is weather risk: parks in the Southeast face hurricane exposure, parks in the Mountain West face wildfire risk, and parks in flood zones face the obvious. Lenders impose ALOP (Additional Loss of Profits) insurance requirements and structural reserves that materially affect underwritten NOI.
Ancillary Income: The Underrated Lever
Ancillary income — store sales, propane, laundry, activities, ice, firewood — is where well-run RV parks separate from average ones. A park with a working camp store can run ancillary at 15–25% of total revenue at 60–70% gross margin. That is real money: on a $1.5M-revenue park, 20% ancillary at 65% margin is $195K of incremental NOI.
But ancillary is partially financeable, not fully. Lenders count store-sales NOI at a discount because it is operating-business income, not rental real estate. CMBS programs typically allow 80% of ancillary NOI; agency programs (where eligible) allow less. Bank balance-sheet lenders will count more if the operator demonstrates a track record.
The upshot is the same NOI is worth less when it comes from the store than from the lot rent. A buyer underwriting a high-ancillary park needs to discount the cap rate accordingly — typically by 50–100bps — and lenders will impose the discount whether the buyer does or not. Understanding the income mix before quoting a cap rate is the single biggest mistake in RV park valuation.
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We segment income by site type, normalize peak-season concentration, and value ancillary at hospitality multiples. Every report includes the lender-defensible cap rate by sub-category — not just a blended number.
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