Fees at the Grand Marais Recreation Park might go up next year, but if they do, increases for campers and marina users will probably be minimal, and those rates shouldn’t have an adverse effect on the business, said Dave Tersteeg, park manager.
Tersteeg brought several recommendations for the park board to consider at its October 4 meeting, with the most pressing possible rate adjustments for the upcoming 2017 season.
Two scenarios for expanding nightly, full hook-up rates were considered. The first adds 50 cents per night, raising the price from $38 to $38.50. The second doubled that increase, adding $1 to the fee. Assuming a flat occupancy, the second would net the park $15,600 more for 2017.
If adopted as proposed, rate increases for summer campers (three months or more) would go up to $7 per month, from $700 to $707, a 1.3 percent increase, or at a $20 per month increase, those long term sites would add $8,000 more per year to the park’s revenue.
“Our modest (1-3 percent) rate increases on overnight locations in the past five years have had no adverse effect on occupancy,” said Tersteeg, adding, “And in fact, we’ve seen steady gains in composite occupancy and increased demand during peak season.”
Lakeside tent and lakeside RV sites could also go up because of their popularity, said Tersteeg, who suggested raising them $6 to $10 more per night for 2017. “These are the best, most sought after sites, with the highest occupancy and highest annual yields,” he said.
Daily marina rates will probably stay the same, said Tersteeg. The park now charges $1.50 per foot, with most marinas on Lake Superior charging either $1.25 to $1.50 per foot for boats.
When offering increased fees, Tersteeg noted expenses to run the park go up every year, and the competition from other parks in most cases charge higher prices than Grand Marais, and he gave examples.
“Similar campgrounds in other small, destination coastal communities on the Great Lakes are charging around $50 per night for prime RV sites and close to $30 per night for tenting.
“Minnesota State Parks along the North Shore charge $23 per night for tenting and $31 per night for electric only RV site, which doesn’t include the $8.50 to $10 reservation fee or $5 per day vehicle fee. Ontario Parks charge $51 per night for electric only RV sites, which also doesn’t include the $13 reservation fee or $10 daily vehicle fee.
“As for Burlington Bay in Two Harbors, that’s a bargain at $32 to $38 per night, but they also include other costs in their charge, so I don’t think they are that much cheaper than we are,” said Tersteeg.
When she learned what the Canadians were paying to stay in their own parks, Board Chair Sally Berg exclaimed, “Well now I know why we have so many Canadian visitors staying in our campground.”
Dave Mills, the city council representative on the park board, said he would like to see rate increases at the park cover the cost of the levy so residents wouldn’t have to pay it. Currently, the levy sits at 4.9 percent, but it could be lowered before the end of the year by the city council.
Tersteeg acknowledged Mills’ goal, but with a caveat. “The number one use of our revenue is for property tax relief: each dollar our operation collects is one less dollar needed from the pockets of city tax payers. But another goal is to reinvest in our service and build out the vision of the Recreation Park Master Plan. Our future capital projects rely on funding from our annual revenue. In order to upgrade and rebuild our infrastructure, we need to maximize our revenue through market-based, user fee collections.”
The board agreed to look over Tersteeg’s proposals and will come back with suggestions at the next meeting.
October Park Report
Once again year-to-date revenue rose, with September coming in at $183,473, an $8,000 increase over 2015. Tersteeg said nightly income for the month was up 15 percent over the previous year, due in large part to the restructured peak season extending until September 15 of this year.
“Monthly revenue was down,” said Tersteeg, “Mostly due to many seasonal guests who paid in advance. Year-todate revenue at the end of September stands at $1,076,013, up 8.5 percent ($84,600) over 2015. Considering last year’s 10 percent growth over 2014, we’ve had some good years.”
Paving work by Edwin E. Thoreson Inc. will be completed this October, and electrical upgrades to RV sites will be scoped this fall, said Tersteeg, with the work done in the spring.
The last day the park will have full-service water sites and bathhouses will be Sunday, October 23, with the staff already busy deep cleaning bathhouses and getting the marina ready to be winterized, Tersteeg said.
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