So... did you jump on that early bird special and register your child for summer camp back in January?
The economy is tough on summer camps. Not only can they be a "luxury" expense for many families, but with so many parents out of work and staying home we also know that summer camps no longer have the same role in child-care.
Since camps are in a yearly revenue cycle with huge dry spells and just a few peak sale months (March - May), it can take until June (for summer camps who are on the edge) to figure out if they can make payroll or pay for facilities through the summer. What? Really? Yep. Summer camp payroll is a huge expense for camps that do not run off volunteers, as are facility costs for any camp that doesn't own its own site. And keep in mind, those that run off volunteers are generally non-profits relying on fundraising and donations; contributions that also dry up in slow economies.
What happens when a summer camp is in the red?
That depends on the summer camp company. Many summer camps are part of a bigger organization, and the camp can be a loss leader. To stay a float some summer camps will renegotiate terms or payment plans with venders or facilities. Some camps will turn to volunteer staff or cut staff ratios. And a few will run to the bank and hope they can get that loan to cover payroll. When those attempts are successful they squeak by. But it happens every year.... some summer camps will close mid-summer or just before they are due to run.
Will you get your money back if a summer camp closes?
That depends on the summer camp company. Most summer camps that are associated with a youth organization, to protect the reputation of the umbrella company or the facility they work for, will be covered by the latter. A summer camp run by a multi-program agency has other budget to draw on and can't afford the legal entanglement from a Chapter 7 that leaves customer damages. But companies that only run camp... well, these are the ones that can fold up on you. (Don't get me wrong, these are also some of the best camps because they devote full time to just running camps. But as a possible indicator of stability in tough economic times - a diversified company may be more resilient.)
Back in 2001 ACE computer camps, a nationally run chain of computer camps with over 60 locations nationwide stopped running mid-session. With estimated numbers at 10, 000 campers per summer - this was a big upset.
When campers came back from lunch some happened to search out the ACE website, they found this message: "American Computer Experience is going out of business immediately. All ACE computer camp locations are cancelled effective immediately." So, the campers and staff went home. None of the families of that week or subsequent weeks were refunded. Camp staff who had worked at camp several weeks were not paid. The rented camp facilities also did not get paid. Lawsuits went on for years and financial restitution is still incomplete.
How can a summer camp customer protect themselves?
It can be hard to find out if a summer camp company has solid financial footing. In the 2009 camp season, you should assume all camps are struggling a bit so don't be afraid to ask some pointed questions:
1) Assume your summer camp might have to close slow weeks and move everyone together to reduce the cost and maximize the profits. Ask your summer camp which weeks might they close if they have to consolidate?
2) If your summer camp is using a rented facility; ask if the camp has paid upfront (or are they past the point of canceling) where the camp would have really committed to the week? (In rental contracts there are dates by which payments become committed, if it's past that point (or if they paid in full upfront), then they will run the week even if it's lower in numbers.)
3) How many campers are registered in the summer camp? Ask for totals for each class as well as over-all camper registration numbers and ask what they had expected. Ask what happens to classes or registration numbers that are low? What is considered low? You are looking for a reasonable answer and a plan for how they will serve lower number. Do some simple math based on what you are paying for the camp and how many kids they say each staff will cover. And if you think because you pay $600 or $1000/week that they must have a ton of profit to play with... think again, summer camps just don't operate on huge margins until they really have volume, it's the "economy of scale" that work in this business - which is why every summer camp may be hurting right now.
4) If you hate your plans to change... avoid registering early for the first week of the camp season and the last week of summer too and the weeks on either side of the holiday. These are the most frequently closed summer camp weeks. The bookend camp weeks close to consolidate the numbers. The weeks on either side of the holiday close because families are taking more trips and enrollment is low. (If you wait and buy these weeks late you may find good deals, call the week before and make an offer ... this may work especially well if you are paid in-full for weeks later in the summer as well.)
5) Know your summer camp leadership. Find out all you can about the camp owner. Are they from a summer camp back ground? Is this a passion that they will not give up on, even in bad times? Would they sell their summer camp today if they could? Also, if you have been at this summer camp for a while, do you sense any change in their approach to camp customers? Are they emailing you more or less? Are the notifications on time, is paperwork late, are they cutting back any services? In this economy, they should be making some adjustments but a "camp" committed owner will be guarding the customer experience from those cuts. Ask what adjustments they are making.
6) How long your summer camp has been around can be a good indicator, but only IF they have a great return rate. (A topic for another day... there are MANY ways that camps can compute a return rate). The summer camps with strong return rates tend to be camps that have either a strong "traditions-based" programming and/or an excellent progression for kids to follow as they age and/or develop in skills. Summer camps that offer a single topic can be fine, if they offer a strong progression. But keep in mind that trendy topics always come and go, so even in good economic years you will see ebb and flow in the numbers at any specialty summer camp. If you hear about some new cool summer camp focused on a topic that is ripped from the TV prime time... it might be fun, call early, but don't drop your cash until just before it runs - and do your best to stop by and visit the program their first week, before you pay up in full... to avoid an unhappy camper.
7) You can check on them. If you are thinking of going to a summer camp that rents their space, call the facility and ask if the summer camp always pays on time. Verify they have been paid all appropriate fees for 2009. This can be very very informative.
8. Take "Fire Sales" as a warning sign. If your summer camp company is running "Fire Sales" (dropping prices like crazy) in the month of June, they are scrabbling for revenue. They have figured out that they have lost money and they are trying to fill all the seats as a tourniquet for the bleeding. They will likely try to up-sell to people already registered for weeks... "Since you bought early we're offering you this amazing discount on your added weeks". This can be a great deal... and using Fire Sales to get a great deal is wonderful... but if your week is in August, and Fire Sales start happening... it's a warning that your camp company is already worried and is likely tightening its belt and scrabbling for last minute camp sales. This could mean reductions in staff ratio, tightening on supplies, or other cost saving measures, including cancelling weeks. It's time to call and ask to make sure your week is still 100% a go. (Ok, in all honesty, if they are doing this at least they are doing something... some businesses can get so busy in summer they don't even try to save themselves and end up folding post season).
9) Have key people in the camp company left? No, I'm not talking about the counselors - though they are "key" since your kids will be with them (but a % of summer staff always go before the season is out). But check into the company leadership, have they had any major turn-over, this can be a sign of financial troubles or major shifts in the company direction. Don't just ask how long the company has been around, ask how long the main Camp Leadership has been in place.
10) Do they have a fall back position? A strong summer camp knows its numbers and knows what it will do based on those numbers along the way. If you can have a frank discussion with someone about the contingency plans you will likely get a gut feel for their business sense; of course that is if you get to speak with a leader in the company not just a sales person. Asking a sales person who is not trained handling these types of questions, may give you your first clues about how the numbers are. If you're worried after that, as to speak to the director or business manager and go ahead and ask questions. Start form the basic assumption that sales must be low and let them know you plan to have a frank discussion.
The point is... Ask some direct questions and make yourself an insider. Your camp company should welcome your partnership!
Article Source: By Kat Fitzgerald