Skift Take

In 2021, Camplify went public as a kind of Airbnb for recreational vehicles. Its financial numbers help serve as a benchmark for the potential of this segment, with its many competitors.

In the seven months since Camplify went public, two questions have hung over the business. Are there enough profits and growth in campervan rentals to make this online segment robust? Or are Camplify and its peers riding a pandemic fad?

“Since day one in 2014, we’ve always had more demand than supply,” said founder and CEO Justin Hales of Camplify — which matches owners of recreation vehicles (RVs) with prospective renters.

Camplify has benefited from a pandemic-related trend in people dreaming of outdoor experiences and Airstream vacations. Nearly 12 million Instagram posts have been tagged “vanlife.”

But the company said it has momentum beyond a pandemic bump.

“One of our typical customers is parents who want to give their families fantastic outdoor experiences but who feel that staying in a tent can be very painful when you have kids,” Hales said. “For these parents, an RV they can access on-demand in their neighborhood —without having to own it — is worth a small premium to them.”

One of the travel industry’s underappreciated storylines is that van life is becoming a van lifestyle, as Skift CEO Rafat Ali said on a recent podcast.

Fresh Financial Details

When going public, Camplify, based in Newcastle, Australia, disclosed some details about its business that its private competitors haven’t yet.

Its numbers help to benchmark the segment, which includes its U.S.-based counterparts Outdoorsy and RVShare; Germany’s GoBoony and PaulCamper; Switzerland’s Nomady; the Netherlands’ CampToo; and the UK’s ShareACamper (just bought by Camplify).

Camplify’s performance suggests that the RV rental model could generate profits over the long term.

The company’s “take rate,” or revenue from transactions, was 25 percent during the financial year ending June 2021. The company racked up 30,651 bookings, enabling it to more than double its revenue to $6.1 million ($8.4 million Australian). Camplify also expanded its gross transaction value over the year by 171 percent to $23.6 million ($32.9 million Australian).

In contrast, Expedia Group and Booking Holdings had a blended take rate of just 12 percent before the pandemic, according to Skift Research.

“I feel confident we’ll have a take rate of at least about 25 percent for some time,” Hales said.

Professionalization of RV Rentals

Just as Airbnb started with independent hosts but now increasingly has inventory from professional property managers, Camplify and its competitors begin with a market of mostly independent players but work their way up to professionals.

This mix is an important factor in the long-term profitability equation. Fragmented markets without many sophisticated professionals can drive high take rates for online middlemen for years.

Today Expedia Group and Booking Holdings have much lower take rates than they did two decades ago because they sell a mix of low-profit tickets from about 200 airlines and somewhat profitable hotels from a few hundred brands and groups. In their early years, the conglomerates benefited heavily from profitable bookings at hundreds of thousands of independent hotels, as Skift Research has noted. Hotel rate parity ruined the party.

Similarly, the outdoors is getting professionalized. Startups such as U.S.-based Cabana suggest branded, glamping-like rentals RV rentals are inevitable.

“I’d say a third of our fleet would be owned by professionals, defined as people who have registered businesses,” Hales said. “The biggest one owns around 15 vehicles. Mom-and-pop, ordinary folks provide the majority of supply, however.”

Camplify Races Down the Highway

Camplify is admittedly a small player still proving its market. Its company’s initial public offering on the Australian stock exchange raised about $8.5 million ($11.5 million Australian).

As of September 2021, the company has 6,469 vehicles across Australia, New Zealand, Spain, and the UK, and it had more than 51,000 renter accounts.

So far, growth has been fast. In September, the Australian Financial Review ranked Camplify as the 17th-fastest-growing-company in the country.

In October, Camplify announced its acquisition of two companies, Mighway and ShareACamper for about $5 million ($7.37 million Australian).

Fad or Long-Term Trend?

Will the booming interest in camping and outdoor experiences last beyond the pandemic?

Hales argued yes. Despite its growth to date, Camplify holds less than 2 percent of the market. As of January 2021, Australia had 741,000 registered recreational vehicles, and most of the owners haven’t yet rented them out.

Camplify makes the process of renting out vehicles easier for owners. It offers owners different levels of insurance paid on a monthly subscription fee rather than pay-as-you-go from an expensive third party.

The company offers vehicle downers optional tracking devices so owners can know where their vehicles are, if they’ve been taken off-road, how mileage is being racked up. It offers optional biometric-based locks to reduce guest interactions.

In an attempt to lever up supply, Camplify began last year to make it easier for people to order campervans directly from manufacturers. These recreational vehicles and campervans are designed to be rented. For example, it replaces impractical internal cooktops with external, slide-out, gas-powered grills, and it installs pull-out awnings that are resistant to breaking by novice users.

Some of Camplify’s marketing is straightforward. The vehicles themselves are like moving advertisements. Hosts can display a QR code so people walking by in a campground can scan them to find out details on booking in the future.

Watching Costs

As the company ramps up its marketing, it may see pressure on its customer acquisition costs. In its fiscal year 2021, Camplify achieved had an average acquisition cost of $92 ($129 Australian) per RV owner acquired, and $6.60 ($9.25 Australian) per new renter.

Hales acknowledged that the loss-making company will see its customer acquisition costs rise as it tries to grow in foreign markets. But he said its “take rate” has also been growing in the last four years.

“We’re looking beyond the core, standardized offering to what other products that segments of our customers are looking for,” Hales said. “We’re diversifying our revenue, and thus growing our revenue at a higher rate, by adding premium upsells around our core offering.”

It will need to watch costs though. During the year through June 2021, it suffered a net loss of $1.5 million ($2.1 million) measured as earnings before interest, taxes, depreciation, and amortization, a measure of profit.

Overall a danger of attempting to be the Airbnb of campervans is that Airbnb might decide to do that itself. In the still-fractured short-term rental market, Airbnb enjoys a take rate of between 14 percent and 25 percent. After the pandemic eases, it could afford to diversify into van life explicitly.

Meanwhile, whichever RV rental company takes a global lead in the category will need to out-innovate everyone else.

“It’s taken a long time for customers to feel comfortable renting out their vehicles in the same way Airbnb faced with short-term rentals,” Hales said. “We’ve put in a lot of groundwork to prove this is a viable option for customers, and that in turn is encouraging more professionalism by owners, which creates a virtuous cycle.”

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Tags: australia, camping, outdoor tourism, outdoors, outdoorsy, RVs, RVshare, startups

Photo credit: An image of a luxury campervan, Nellop, that was recently available for rent in New South Wales Australia via Camplify, a RV rental marketplace based in Australia. Source: Camplify.

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