FAMILY VACATION COST COMPARISON

Transcription

1 FAMILY VACATION COST COMPARISON VACATIONS USING SELECTED RECREATION VEHICLES COMPARED TO OTHER TYPES OF VACATIONS PREPARED FOR: GO RVING CANADA TORONTO, ONTARIO, CANADA PREPARED BY: PKF CONSULTING ALEXANDRIA, VIRGINIA

2 TABLE OF CONTENTS SECTION I: EXECUTIVE SUMMARY Objective I-1 Selected RV Types I-1 Findings I-2 Methodology I-5 Firm Qualifications I-7 SECTION II: COST COMPARISON Study Objective Study Parameters Methodology Vacation Costs Cost of Vehicle Ownership Total Vacation Cost Calculation Conclusion II-1 II-1 II-5 II-12 II-18 II-21 II-23

3 SECTION I: EXECUTIVE SUMMARY

4 SECTION I: EXECUTIVE SUMMARY EXECUTIVE SUMMARY OBJECTIVE PKF Consulting was commissioned by Go RVing Canada to provide an objective comparison between the cost of a Summer 2009 vacation using selected recreation vehicles (RVs) and the cost of other types of vacations during that same period of time. An RV is defined as a motorized or towable vehicle that combines transportation and temporary living quarters for travel, recreation, and camping. SELECTED RV TYPES There are several different types of RVs available to consumers. For purposes of this analysis, PKF (in conjunction with Go RVing Canada) has selected three types of RVs that are typically used by families for vacation purposes. The three types of RVs are Folding Camping Trailer, Lightweight Travel Trailer, and Type C Motorhome. Following is a brief description of each of these RV types, along with an illustration. Folding Camping Trailer A lightweight RV with collapsible sides for towing by typical family vehicles, even some compact cars. Set up, it provides kitchen, dining, sleeping, and often bathroom facilities for up to eight people. For the purposes of this study, we have assumed the average folding camping trailer will weigh approximately 2,000 pounds. Lightweight Travel Trailer Built to be towed by a car, van, or pickup, this RV provides kitchen, bathroom, dining, and living facilities. Sleeps up to ten people. For the purposes of this study, we have assumed the average lightweight travel trailer will weigh approximately 4,000 pounds. I-1

5 SECTION I: EXECUTIVE SUMMARY Type C Motorhome Built on an automotive-manufactured van frame with an attached cab section, this RV s living area is behind and above the cab. Typically sleeps up to ten eight people, and offers conveniences such as kitchen, bathroom, dining, and living facilities. FINDINGS In our Summer 2009 study, PKF found typical family RV vacations on average to be 35 percent to 75 percent less expensive per day than the other types of vacations analyzed. It is significant to note that the data used in this analysis factored in vehicle ownership costs. In all cases in the sample, the RV vacations were more economical than the other vacations analyzed, regardless of trip duration, trip distance, or region of the country where the vacation takes place. The average cost per day of the 3-day camping vacation to Algonquin Provincial Park using a folding camping trailer was found to be about 41 percent less expensive than the cost of a comparable car/hotel combination vacation; and about 75 percent less than the cost of a comparable air/hotel vacation. The average cost per day of the 10-day camping vacation to Quebec City using a folding camping trailer was found to be about 51 percent less expensive than the cost of a comparable car/hotel combination vacation; and about 66 percent less than the cost of a comparable air/hotel vacation. The average cost per day of the 3-day camping vacation to Sturgeon Falls using a Type C Motorhome was found to be about 35 percent less expensive than the cost of a I-2

6 SECTION I: EXECUTIVE SUMMARY comparable car/hotel combination vacation; and about 67 percent less than the cost of a comparable air/hotel vacation. The average cost per day of the 10-day camping vacation to Drumheller using a Type C Motorhome was found to be about 39 percent less expensive than the cost of a comparable car/hotel combination vacation; and about 46 percent less than the cost of a comparable air/hotel vacation. The average cost per day of the 7-day camping vacation to Banff National Park using a lightweight travel trailer was found to be about 45 percent less expensive than the cost of a comparable car/hotel combination vacation; and about 65 percent less than the cost of a comparable air/hotel vacation. The following table summarizes the findings of our analysis. I-3

7 SECTION I: EXECUTIVE SUMMARY Table 1 Cost Comparison of Vacations Using Selected Recreation Vehicles Versus Other Types of Vacations Vacation 1: 3-Day, Montreal, QC to Algonquin Provincial Park, ON Mode of Travel Total Cost Cost/Day Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the $914 $305 folding camping trailer or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. $1,559 $520 Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. $3,646 $1,215 Vacation 2: 10-Day, Halifax, NS to Quebec City, QC Mode of Travel Total Cost Cost/Day Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the $2,590 $259 folding camping trailer or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. $5,303 $530 Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. $7,636 $764 Vacation 3: 3-Day, Toronto, ON to Sturgeon Falls, ON Mode of Travel Total Cost Cost/Day Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at $939 $313 campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. $1,440 $480 Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. $2,799 $933 Vacation 4: 10-Day, Brandon, MB to Drumheller, AB Mode of Travel Total Cost Cost/Day Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at $3,175 $318 campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. $5,191 $519 Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. $5,904 $590 Vacation 5: 7-Day, Vancouver, BC to Banff National Park, AB Mode of Travel Total Cost Cost/Day Family traveling in a light-duty truck/suv, towing their lightweight travel trailer, staying at campgrounds, and preparing all meals in $2,184 $312 the trailer or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. $3,987 $570 Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. $6,270 $896 Source: PKF Consulting I-4

8 SECTION I: EXECUTIVE SUMMARY METHODOLOGY The hypothetical travel party used in the vacation cost analysis was a family composed of a mother, father, and their two children one child under 12 years of age and one child over 12 years of age. PKF analyzed major costs that would be incurred by families taking five selected theoretical round trip vacation comparisons between selected city-pairs. Data was collected during May and June 2009, and it was assumed that all vacations would take place during July The five selected theoretical round trip vacation comparisons used in the analysis varied principally by mode of transportation and type of accommodations and meal plan used, as summarized below: 1. Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites (3 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (3 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (3 days). 2. Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites (10 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (10 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (10 days). 3. Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites (3 days). VS I-5

9 SECTION I: EXECUTIVE SUMMARY Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (3 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (3 days). 4. Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites (10 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (10 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (10 days). 5. Family traveling in a light-duty truck/suv, towing their lightweight travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites (7 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (7 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (7 days). For each of the aforementioned vacations to be analyzed, we coordinated selections of the city-pairs with Go RVing Canada to ensure that proper focus has been given to highly popular RV destinations. Costs to be analyzed would be the major cash or credit outlays that are required from the time a hypothetical vacation begins to the time it ends. The foregoing would include: fuel costs; air-fare; restaurant meal cost; grocery cost; rental car cost; campsite cost; and hotel/motel cost. Incidental expenses, such as entertainment, shopping, and the like, would not be considered because they would normally not vary by mode of transportation or type of accommodations used during a vacation. We would also factor in an estimated cost of ownership of the applicable RV equipment that would be based upon assumptions regarding useful life or average ownership periods, residual values, annual days of utilization, insurance and other costs I-6

10 SECTION I: EXECUTIVE SUMMARY of ownership. The cost of personal vehicle ownership was not included. It is assumed that most families will own a personal vehicle for general day-to-day use, and not specifically for vacation use. ADDITIONAL BENEFITS NOT ANALYZED Many reasons for RV vacationers loyalty go beyond the scope of this study, including the following points: RV ownership provides benefits that go well beyond people s desire for affordability. Specifically, it allows families a unique travel experience that offers family appeal for those seeking to foster an increased sense of togetherness, control, flexibility, and convenience to travel whenever and wherever desired, comfort, the lure of the outdoors, and versatility for a variety of uses. An analysis of the ongoing benefits of RV ownership (excluding expenditure costs for the analysis of selected vacations), such as transportation to sporting events, or even the use of an RV as an extra bedroom/apartment, fell beyond the scope of the engagement. PKF did not attempt to compare the quality of RV vs. other vacation types. Obviously, riding in a jet from an origin city in several hours is a far different experience than driving a motorhome at a leisurely pace between the vacation origin and destination, sightseeing along the way. Although qualitative advantages to RV vacations such as family appeal and flexibility and convenience to travel whenever and wherever one desires were commonly cited by RV owners as distinct over other vacations, further analysis of these qualitative advantages fell beyond the scope of this study. The list of benefits provided by RV ownership are attractive to families entering the RV market and empty nesters in that both of these segments are seeking value for their dollar. In the case of some new entrants, typically the budgetary constraints of raising a family coupled with the trend of taking shorter vacations close to home match quite well with a desire to experience a cost conscious family vacation with few hassles. In the case of retirees, much of this segment shares a desire to travel constrained by the realities of living on a fixed income demanding frugality. Again, RV ownership provides an attractive choice for meeting all of these requirements. FIRM QUALIFICATIONS PKF Consulting is a management consulting firm with a network of ten primary offices located throughout the continental United States and is a member of Pannell Kerr Forster Worldwide, a network that includes over 250 affiliated offices in 75 countries around the world. PKF serves clients worldwide, with a staff that consists of nearly 100 professional consultants and specialists. PKF has over 90 years of experience and recognition in all phases of professional assistance and counsel to service industries and specifically to the tourism, hospitality, and recreation industries. The Alexandria, Virginia office of PKF Consulting prepared this study. I-7

11 SECTION II: COST COMPARISON

12 COST COMPARISON STUDY OBJECTIVE PKF Consulting was commissioned by Go RVing Canada to provide an objective comparison between the cost of a Summer 2009 vacation using selected recreation vehicles (RVs) and the cost of other types of vacations during that same period of time. STUDY PARAMETERS Data was collected during May and June 2009, and it was assumed that all vacations would take place during July Costs to be analyzed would be the major cash or credit outlays that are required from the time a hypothetical vacation begins to the time it ends. The foregoing would include: fuel costs; air-fare; restaurant meal cost; grocery cost; rental car cost; campsite cost; and hotel/motel cost. Incidental expenses, such as entertainment, shopping, and the like, would not be considered because they would normally not vary by mode of transportation or type of accommodations used during a vacation. We would also factor in an estimated cost of ownership of the applicable RV equipment that would be based upon assumptions regarding useful life or average ownership periods, residual values, annual days of utilization, insurance and other costs of ownership. The cost of personal vehicle ownership was not included. It is assumed that most families will own a personal vehicle for general day-to-day use, and not specifically for vacation use. Only vacations within Canada were analyzed. A vacation is defined as a non-work-related time period. We have assumed that vacation implies voluntary travel for rest and recreation. Vacations that include overnight stays in the homes of friends and relatives of the traveling party were not analyzed in this study. For this analysis, we have defined vacations as journeys to places at least 200 miles away from the traveling party s normal residence. We have assumed that these vacations involve a minimum of one night away from that normal residence. Based upon recommendations by the Canadian Automobile Association (CAA) we have assumed that the traveling party would drive no more than 300 miles per day, plus an additional average highway distance of 50 miles per day for sightseeing excursions. II-1

13 The hypothetical travel party used in the vacation cost analysis was a family composed of a mother, father, and their two children one child under 12 years of age and one child over 12 years of age. Since the objective was to compare the cost of a family vacation, we selected the aforementioned hypothetical travel party for our analysis. Our decision to have one child under 12 years of age and one over 12 years of age was related to the adult/child designation used by many hotels, campgrounds, and other relevant establishments. PKF analyzed major costs that would be incurred by families taking five selected theoretical round trip vacation comparisons between selected citypairs. Data was collected during May and June 2009, and it was assumed that all vacations would take place during July The five selected theoretical round trip vacation comparisons used in the analysis varied principally by mode of transportation and type of accommodations and meal plan used, as summarized below: 1. Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites (3 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (3 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (3 days). 2. Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites (10 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (10 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (10 days). II-2

14 3. Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites (3 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (3 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (3 days). 4. Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites (10 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (10 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (10 days). 5. Family traveling in a light-duty truck/suv, towing their lightweight travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites (7 days). VS Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants (7 days). AND Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants (7 days). The vacations being analyzed, combined with the selected city-pairs, are summarized in the following table. II-3

15 Table 2 Cost Comparison of Vacations Using Selected Recreation Vehicles Versus Other Types of Vacations Vacation 1: 3-Day, Montreal, QC to Algonquin Provincial Park, ON Mode of Travel Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Vacation 2: 10-Day, Halifax, NS to Quebec City, QC Mode of Travel Family traveling in a personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Vacation 3: 3-Day, Toronto, ON to Sturgeon Falls, ON Mode of Travel Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Vacation 4: 10-Day, Brandon, MB to Drumheller, AB Mode of Travel Family traveling in a Type C Motorhome, staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Vacation 5: 7-Day, Vancouver, BC to Banff National Park, AB Mode of Travel Family traveling in a light-duty truck/suv, towing their lightweight travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites. Family traveling in a personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Source: PKF Consulting There are several different types of RVs available to consumers. For purposes of this analysis, PKF (in conjunction with Go RVing Canada) has selected three types of RVs that are typically used by families for vacation purposes. The three types of RVs are Folding Camping Trailer, Lightweight Travel Trailer, and Type C Motorhome. Following is a brief description of each of these RV types: Folding Camping Trailer A lightweight RV with collapsible sides for towing by typical family vehicles, even some compact cars. Set up, it provides kitchen, dining, sleeping, and often bathroom facilities for up to eight people. For the purposes of this study, we have assumed the average folding camping trailer will weigh approximately 2,000 pounds. II-4

16 METHODOLOGY Lightweight Travel Trailer Built to be towed by a car, van, or pickup, this RV provides kitchen, bathroom, dining, and living facilities. Sleeps up to ten people. For the purposes of this study, we have assumed the average lightweight travel trailer will weigh approximately 4,000 pounds. Type C Motorhome Built on an automotive-manufactured van frame with an attached cab section, this RV s living area is behind and above the cab. Typically sleeps up to ten eight people, and offers conveniences such as kitchen, bathroom, dining, and living facilities. Choosing Location of Vacations PKF, in conjunction with Go RVing Canada, selected vacation destinations to ensure that proper focus has been given to highly popular RV destinations. PKF also selected origin based upon travel distance and the availability of commercial air service. Since travel by ground transportation modes was to be compared with air transportation, the distance between city-pairs was made large enough so that flying would be a realistic alternative mode of transportation for the hypothetical travel party. Each vacation was assigned a specific trip duration. In the analysis, vacations ranged from 3 to 10 days and were related to the round-trip distance in highway miles between the origin and destination locations. We assumed that all trips took place during the month of July 2009 and began on a Friday. The base round-trip mileage between the city-pairs (not including sightseeing excursions) ranged from a low of 476 miles to a high of 1,336 miles. However, for each day of the round-trip vacations, 50 additional miles were added to the base mileage for sightseeing or side trips. In Table 3, we have presented a list of the city-pairs used in our analysis, the base round-trip highway mileage for each vacation, the trip duration for each, and the total round-trip mileage traveled during each of the vacations (includes sightseeing excursions for each day). Maps illustrating the trips are presented on Pages II-7 through II-11. Table 3 City-Pairs Used in Vacation Cost Comparison City Pair Base Round-trip Mileage Total Round-trip Mileage Duration of Trip (days) Montreal, QC Algonquin Provincial Park, ON Halifax, NS Quebec City, QC 1,276 1, Toronto, ON Sturgeon Falls, ON Brandon, MB Drumheller, AB 1,336 1, Vancouver, BC Banff National Park, AB 1,070 1,420 7 Source: Google.com; PKF Consulting II-5

17 After the origin and destination points were chosen, locations between the pairs where the travel party would stay overnight were chosen for those city-pairs located more than 300 miles apart. We assumed that the hypothetical travel party using either an automobile or RV would travel less than 300 miles a day while en route to its destination. We based this assumption on the CAA recommendation that the average motorist should travel no more than 300 miles per day, or 7.5 hours travel time including stops for fuel and refreshment, to avoid fatigue. The origin city, destination city, and inbetween cities/towns selected for each of the selected vacation trips are presented in Table 4. Table 4 Vacations (1) : Origin City, Cities/Towns En Route, and Destination City Montreal, QC Algonquin Provincial Park, ON Halifax, NS Fredericton, NB Edmundston, NB Quebec City, QC Toronto, ON Sturgeon Falls, ON Brandon, MB Regina, SK Medicine Hat, AB - Drumheller, AB Vancouver, BC Enderby, BC - Banff National Park, AB Note: (1) Vacations begin with origin city and end with destination. Return trip assumed to be same route. Origin and destination cities are in bold. Source: PKF Consulting II-6

18 Map 1 Montreal, QC to Algonquin Provincial Park, ON II-7

19 Map 2 Halifax, NS to Quebec City, QC II-8

20 Map 3 Toronto, ON to Sturgeon Falls, ON II-9

21 Map 4 Brandon, MB to Drumheller, AB II-10

22 Map 5 Vancouver, BC to Banff National Park, AB II-11

23 VACATION COSTS As stated previously, the major vacation cost categories analyzed in the study were fuel costs; round-trip airfare costs; restaurant meal costs; grocery costs; rental car costs; campsite costs; and hotel/motel costs. Transportation Costs Transportation costs analyzed can be classified as follows: Fuel cost of personally owned or rental vehicles operated by member of the hypothetical travel party (RVs, RV tow vehicles, and personal cars). Round-trip airfare cost of commercial transportation systems used by the hypothetical travel party between the origin and destination cities. The cost of renting a full-size automobile in or near each of the destination cities, as applicable. The per mile cost of owning a personal vehicle, excluding fuel and oil costs. Round-trip airfare data was collected for each of the selected vacations. PKF considered likely travel patterns associated with 3-, 7-, and 10-day vacations when determining average airfare costs, as sometimes airfare may differ slightly depending upon day of week arrival/departure patterns. Airfare data was collected for round-trip, coach fares through the Internet ( PKF considered the lowest fare available via the Internet at the time of our fieldwork (May and June 2009). It should be noted that airfares change quite frequently, and therefore the quoted rates may no longer be available as of the issuance of this report. All hypothetical travel dates were selected during the month of July Therefore, we have assumed that a hypothetical travel party would purchase airline tickets at least one month in advance of the anticipated departure date. We have presented airfare data in the following table. II-12

24 Origin Table 5 Airfare Survey Destination Trip Duration Date of Departure Date of Return Total Airfare per Travel Party Montréal-Pierre Elliott Trudeau International Airport, QC North Bay Airport, ON 3 July 17 July 19 $2, Halifax Robert L. Stanfieltd Québec City Jean Lesage Inernational Airport, NS International Airport, QC 10 July 17 July 26 $2, Toronto Pearson International Airport, ON North Bay Airport, ON 3 July 17 July 19 $1, Winnipeg International Airport, MB Calgary International Airport, AB 10 July 17 July 26 $1, Vancouver International Airport, BC Calgary International Airport, AB 7 July 17 July 23 $3, Source: PKF Consulting In our analysis, the hypothetical travel party using air transportation to travel from the origin to the destination city rented a standard, full-size automobile on arrival in the destination city (or closet airport). We have assumed that the travel party drove the rental car an average of 50 miles per day during the days spent in the destination city. The rental cost of a standard, full-size rental car was obtained through the Internet (travelocity.com). Collision damage waiver fees, personal accident insurance fees, and additional insurance fees were not included in the cost calculation because these costs are not mandatory. Presented in Table 6 are the rental car costs used in the cost comparison analysis. Table 6 Car Rental Fee Survey Renting Location Trip Date of Date of Total Rental Duration Departure Return Charge North Bay Airport, ON 3 July 17 July 19 $95.59 Québec City Jean Lesage International Airport, QC 10 July 17 July 26 $ North Bay Airport, ON 3 July 17 July 19 $95.59 Calgary International Airport, AB 10 July 17 July 26 $ Calgary International Airport, AB 7 July 17 July 23 $ Source: PKF Consulting Fuel costs were calculated for all vehicles the hypothetical travel party used. The fuel consumption (i.e. gallons) of the various vehicles was calculated first. The mileage traveled during each vacation, or in and around the destination city (rental car), was divided by miles per gallon (MPG) estimated for the various vehicle types. In the case of rental cars, the average fuel mileage of models commonly rented was calculated. MPG estimates were derived from the fuel mileage ratings prepared by the U.S. Environmental Protection Agency (EPA). The EPA ratings model presents city and highway MPG estimates for nearly all vehicle makes and models. We have assumed rental cars will be model year Table 7 details our MPG calculation for rental cars. II-13

25 Table 7 Fuel Economy of Typical Full-Size Rental Cars Make and Model (1) Average MPG (2)(3) Chevrolet Impala 19.6 Dodge Charger 20.1 Pontiac G Average Full-Size Rental Car 19.6 Notes: (1) Vehicle makes and models selected based upon inventory of national car rental companies. (2) Average MPG based on average of all available 2009 models. (3) Assumes 55% city, 45% highway mileage split per EPA. Source: Environmental Protection Agency (EPA) 2009 Fuel Mileage Ratings In order to determine fuel mileage economy for personal vehicles, PKF used data from the U.S. Department of Transportation Revised Summary of Fuel Economy Performance, dated January 15, 2008, which reports domestic and import passenger car and light truck fuel economy averages for the model years We assumed that model year 2005 would represent the majority of personal vehicles used by the hypothetical travel party. Average fuel economy figures for this year results in an average fuel mileage per gallon of 30.3 for all cars (domestic and imported) and 22.1 miles per gallon for all light trucks and sport utility vehicles (SUVs). As with the previous studies, the EPA rating model does not address the additional fuel consumption (i.e. lower mileage per gallon) of a vehicle towing a trailer. We used the theory (based on results) of a leading trailer manufacturer to calculate the additional fuel used and the corresponding decrease in mileage per gallon. The manufacturer found that towing a trailer would cause the towing vehicles to use an estimated additional gallon of fuel for every 100 miles traveled per 1,000 pounds. It should be noted that because of the variability of highway wind conditions, wind resistance could not be analyzed, but it does affect fuel consumption. After determining the fuel efficiency (i.e. mileage per gallon) of the vehicles used in our cost comparison analysis, we then calculated fuel cost by calculating gallons needed (mileage divided by mileage per gallon) and multiplying gallons needed by prices per gallon of fuel at the pump. Since it was not possible to determine when the travel party would fill the tanks of their vehicles with fuel, we used the most recent data available from for average fuel costs in Canada, which indicated a per gallon rate of $3.79 as of May 26, We then multiplied that figure by the number of gallons needed during the each of the hypothetical trips. For the rental car, we assumed that the hypothetical travel party would drive the rental vehicle an average of 50 miles per day. We have assumed that all vehicles would use regular unleaded fuel. It is significant to point out the volatility in fuel prices in the current world market, often on a day-to-day basis. II-14

26 In the cases where a folding camping trailer or lightweight travel trailer was pulled behind a vehicle, we assumed that the trailer would be left behind at the campground during sightseeing excursions. Therefore, the mileage per gallon estimate used for mileage driven by the travel party at those times was higher because the engine of the towing vehicle operated more efficiently without the trailer. Table 8 illustrates the methodology to calculate fuel costs for a sample vacation. Table 8 Example of Fuel Cost Calculation (Non-RV Vacation) Trip (1) : Duration: Base Round-trip Mileage: Sightseeing Mileage (2) : Total Mileage: Vehicle Used: Average MPG (3) : Halifax, NS Fredericton, NB Edmundston, NB Quebec City, QC 10 days 638 miles 500 miles 1,138 miles Personal Vehicle (Full-Size Sedan) 30.3 MPG Gallons Needed for Trip: 21.1 Gallons Needed for Sightseeing (4) : 16.5 Total Gallons Needed: 37.6 Average Fuel Price (5) : $3.79 per gallon Total Fuel Cost $ Notes: (1) Origin and destination cities in bold (2) 50 miles per day for sightseeing and side trips (3) MPG estimates based on U.S. Department of Transportation Revised Summary of Fuel Economy Performance (4) Assumed that vehicle would be driven without trailer for sightseeing (5) Fuel price data obtained from Source: USDOT; PKF Consulting Food Costs The hypothetical travel party incurred vacation food costs in two different ways, depending on whether they took a camping vacation or a non-camping vacation. In camping vacations, the travel party prepared the majority of its meals in its RV or outdoors at campsites. In non-camping vacations, the travel party ate the majority of its meals in restaurants. II-15

27 Two food costs were calculated for the hypothetical travel party composed of two adults and two children. One food cost was calculated for all camping vacations, and another food cost was calculated for all non-camping vacations. We assumed there would be no regional variation in grocery costs; the same food cost was used in the analysis regardless of the region where a vacation took place. Total food costs consisted of a grocery and restaurant component. The grocery component was calculated using data generated by the U.S. Department of Agriculture (USDA) Center for Nutrition Policy and Promotion. The USDA published a data set entitled Official USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average, April We chose the liberal cost food plan, and determined that the cost of groceries to the hypothetical travel party would be approximately $39.67 per day of the vacation (these costs do not include alcoholic beverages). A dinner cost of $17.85 is included in the $39.67 daily expenditure. A detailed breakdown of grocery costs is presented in Table 9. Table 9 Grocery Cost Components Member of Hypothetical Grocery Cost per Travel Party Day Female Adult (age 19-50) $9.81 Male Adult (age 19-50) $10.99 Child under 12 (assumed age 10) $9.26 Child over 12 (assumed age 13) $9.61 Total Party $39.67 Estimated Cost of Dinner (1) $17.85 Note: (1) Assumed to be 45 percent of the total daily cost Source: USDA Center for Nutrition Policy and Promotion; PKF Consulting The restaurant meal component was calculated based on government per diem data provided by the Treasury Board of Canada Secretariat. Their policy indicates a daily meal allowance total of $60.50 (converted from a rate of Canadian $65.95) per individual, or $ per hypothetical travel party. From the separate grocery and restaurant cost components, we calculated the total food cost for a camping vacation and a non-camping vacation. After calculating the total grocery and restaurant cost for 3-, 7-, and 10-day vacations, we then calculated and summed 75 percent of restaurant cost and 25 percent of grocery cost for each vacation duration to derive total meal cost for non-camping vacations. The rationale behind the 75/25 percent combination of restaurant and grocery costs is our opinion that the hypothetical travel party traveling by personal automobile or air and staying in hotels/motels will sometimes buy donuts for breakfast, have picnics, or otherwise eat meals outside of restaurants. Research by the Recreation Vehicle Industry Association ( RVIA ) indicates that campers tend to prepare II-16

28 all their meals at campgrounds; therefore we have assumed a food cost for a camping vacation based solely on grocery cost estimates. For the hypothetical travel party using airlines, we considered the fact that, at times, meals are served while in route. However, interviews with several major airlines revealed that complimentary meal service is being phased out. After consideration of the foregoing, we have assumed no change in meal cost on travel days for the hypothetical party traveling by air. Presented in Table 10 are the total food costs for the various vacations considered in our analysis. Table 10 Total Food Cost for Hypothetical Travel Party by Vacation Type Vacation Origin-Destination # Non- Camping Days Camping Montreal, QC Algonquin Provincial Park, ON 3 $ $ Halifax, NS Quebec City, QC 10 $ $1, Toronto, ON Sturgeon Falls, ON 3 $ $ Brandon, MB Drumheller, AB 10 $ $1, Vancouver, BC Banff National Park, AB 7 $ $1, Hotel Costs The cost of hotel accommodations in or near each of the destination and stopover cities was determined as part of the vacation cost comparison. Using the Internet ( a sampling of hotels was chosen in each of the cities/towns. If hotels were not available within the stopover city/town, we considered hotels within a 20-mile radius. Generally, we assumed that the hypothetical travel party would stay in a full-service hotel in each destination city and a limitedservice hotel in each of the stopover cities, as available. We further assumed that the party would stay in a hotel with a recognized brand affiliation, if available. PKF then determined the nightly rate at each establishment via the Internet. Hotels not available to book through Travelocity were surveyed directly from their individual websites. We assumed the hypothetical travel party (2 children, 2 adults) would stay in one standard hotel room. Our assumption that the hypothetical travel party would stay in one hotel room was based on the need for a valid comparison to RVs, where the family would also be accommodated in one space (e.g., interior of folding camping trailer). Rates were requested for selected dates during July 2009, when we have assumed all hypothetical vacations take place, including all taxes and fees. After rates were determined for lodging establishments in the sample, the average nightly rate was calculated for the sample. This gave us an average nightly rate for each city/town surveyed. This nightly rate was then multiplied by the number of nights the hypothetical travel party stayed in the city during any particular vacation. II-17

29 It should be noted that when the travel party used air transportation, we assumed that it bypassed the cities between the particular city-pairs (origin and destination city) and instead spent the majority of its vacation staying in and around the destination city. Presented in Table 11 are the total hotel costs for the various vacations considered in our analysis. Table 11 Total Hotel Cost for Hypothetical Travel Party by Vacation Type Vacation Origin-Destination # Non-Camping Non-Camping Days with Flight without Flight Montreal, QC Algonquin Provincial Park, ON 3 $ $ Halifax, NS Quebec City, QC 10 $2, $1, Toronto, ON Sturgeon Falls, ON 3 $ $ Brandon, MB Drumheller, AB 10 $1, $1, Vancouver, BC Banff National Park, AB 7 $1, $1, Campsite Costs The nightly cost of campsites in or near each of the destination and intermediate cities was determined as part of the vacation cost comparison. Using a list was compiled of campgrounds in or near each applicable city. Each campground was then surveyed by telephone, to determine the nightly rate at each campground for the hypothetical travel party (two adults and two children) if they camped at a standard campsite. If available, PKF determined nightly rates at campsites with full-hook-ups, as well as water and electric only. Some campgrounds offered only one type of site. All costs were then averaged, including full-hookup fees and water/electric only fees, in order to calculate the nightly figures for each city. Total camping costs were calculated using the aforementioned averages, depending upon the various lengths of stay in each city/town. Presented in Table 12 are the total campsite costs for the various vacations considered in our analysis. Table 12 Total Campsite Cost for Hypothetical Travel Party by Vacation Type Vacation Origin-Destination # Days Total Campsite Cost Montreal, QC Algonquin Provincial Park, ON 3 $53.22 Halifax, NS Quebec City, QC 10 $ Toronto, ON Sturgeon Falls, ON 3 $45.87 Brandon, MB Drumheller, AB 10 $ Vancouver, BC Banff National Park, AB 7 $ COST OF VEHICLE OWNERSHIP PKF Consulting also considered the cost of vehicle ownership for each applicable mode of transport - personal vehicle, folding camping trailer, lightweight travel trailer, and II-18

30 Type C motorhome. The following text outlines our underlying assumptions and subsequent approach to this analysis. The current average reimbursement rate provided by Treasury Board of Canada Secretariat for all types of personal vehicles in Canada is $0.885 per mile. PKF has already calculated gasoline cost for each hypothetical vacation using the average fuel cost data and average MPG figures derived from U.S. Department of Transportation Revised Summary of Fuel Economy Performance, dated January 15, Combining the average fuel cost of $3.79 per gallon and the average mileage per gallon of 30.3 for personal vehicles, the fuel cost per mile is approximately $ The remaining $0.76 includes the cost for maintenance, tires, insurance, license and registration, sales tax, and depreciation. Likewise for an SUV, combining the average fuel cost of $3.79 per gallon and the average mileage per gallon of 22.1 for SUVs, the fuel cost per mile is approximately $ This leaves $0.714 for maintenance, tires, insurance, license and registration, sales tax, and depreciation on SUVs. Using this information, PKF has estimated the cost of owning a personal vehicle and SUV on a per mile basis for each hypothetical vacation, as applicable. In order to determine the cost of owning an RV, PKF utilized data from the 2005 University of Michigan report titled The RV Consumer: A Demographic Profile, which is updated approximately every fourth year. For each type of RV we used the percentage of used versus newly purchased vehicles in order to develop a weighted average cost of ownership. According to the report, approximately 39 percent of folding camping trailers are purchased new, and 61 percent are purchased used; approximately 33 percent of travel trailers are purchased new, and 67 percent are purchased used; and approximately 21 percent of motorhomes (Types C) are purchased new, while 79 percent are purchased used. Based on the University of Michigan report, we assumed that a used RV was, on average, 9 years old when purchased. Based on today s prevailing interest rates, we assumed a 7.5 percent interest rate, and we further assumed purchases would be financed over a 12.5-year period. It is significant to note, however, that financing terms are subject to many factors and vary based on the individual borrower. For purposes of this analysis, we have selected the previously mentioned terms for all cases so that relevant comparisons could be made. The average reported holding period for all RVs was assumed to be seven years, per the University of Michigan report. After seven years, we assumed that RVs would be sold. PKF calculated the expected residual value of each RV (new and used) after the estimated seven-year holding period. Residual values were estimated based on discussions with RV manufacturers. PKF determined today s residual value of seven-year old RVs (based on new RV being sold in seven years) and 16-year old RVs (based on 9-year old RV being sold in seven years) and applied those ratios to today s new and used costs. After calculating the cost of each vehicle, plus seven years of interest payments, we subtracted the vehicle s residual value, or what the owner would receive upon sale of the vehicle. This resulted in a total cost of ownership, which was then divided by the II-19

31 average holding period to determine the average cost per year. According to the University of Michigan study, an RV is used an average of 26 days per year. The annual cost of ownership was divided by 26 days to obtain the estimated cost of ownership per day. Then, using a weighted average of new versus used vehicles, this cost per day was then applied to the duration of each hypothetical vacation in order to define the cost of owning each vehicle type per hypothetical trip. The following details the analysis described above. Cost of Owning a Folding Camping Trailer For the purposes of our analysis, we have assumed the folding camping trailer is approximately 2,000 lbs. According to information gathered from several RV dealers throughout Canada, the average cost of a new folding camping trailer is $8,150. Our research, primarily through revealed that the average cost of a used folding camping trailer (assumed to be 9 years old) is estimated at $3,100. The anticipated residual value of the new trailer in seven years is $4,483, while the anticipated residual value of the used trailer in seven years is $1,705. Assuming each folding camping trailer purchased was financed over 12.5 years at 7.5 percent interest and an average holding period of seven years, total interest paid on a new folding camping trailer amounts to $3,421, while seven years of interest on the used folding camping trailer amounts to $1,301. Based on the aforementioned data, the cost of owning the folding camping trailer is calculated as follows: New Used Average Purchase Price $8,150 $3,100 Plus Seven Years of Interest $3,421 $1,301 Minus Expected Residual Value $(4,483) $(1,705) Total Cost $7,088 $2,696 Total Cost per Year $1,013 $385 Cost Per Day $38.96 $14.81 Weighted Average based on 39 percent new and 61 percent used ownership $24.23 Cost of Owning a Travel Trailer For the purposes of our analysis, we have assumed the travel trailer is approximately 4,000 lbs. According to information gathered from several RV dealers throughout Canada, the average cost of a new travel trailer is $15,775. Our research, primarily through revealed that the average cost of a used travel trailer (assumed to be 9 years old) is $4,930. The anticipated residual value of the new travel trailer in seven years is $11,043, while the anticipated residual value of the used travel trailer in seven years is $2,465. Assuming each travel trailer purchased was financed over 12.5 years at 7.5 percent interest and an average holding period of seven years, total interest paid on a new travel trailer amounts to $6,622, while seven years of II-20

32 interest on the used travel trailer amounts to $2,069. Based on the aforementioned data, the cost of owning the travel trailer is calculated as follows: New Used Average Purchase Price $15,775 $4,930 Plus Seven Years of Interest $6,622 $2,069 Minus Expected Residual Value $(11,043) $(2,465) Total Cost $11,354 $4,534 Total Cost per Year $1,622 $648 Cost Per Day $62.38 $24.92 Weighted Average based on 33 percent new and 67 percent used ownership $37.28 Cost of Owning a Type C Motorhome According to information gathered from several RV dealers throughout Canada, the average cost of a new Type C motorhome is $65,500. Our research, primarily through revealed that the average cost of a used Type C motorhome (assumed to be 9 years old) is $31,200. The anticipated residual value of the new motorhome in seven years is $45,850, while the anticipated residual value of the used motorhome in seven years is $15,600. Assuming each motorhome purchased was financed over 12.5 years at 7.5 percent interest and an average holding period of seven years, total interest paid on a new motorhome amounts to $27,495, while seven years of interest on the used motorhome amounts to $13,097. Based on the aforementioned data, the cost of owning the Type C motorhome is calculated as follows: New Used Average Purchase Price $65,500 $31,200 Plus Seven Years of Interest $27,495 $13,097 Minus Expected Residual Value $(45,850) $(15,600) Total Cost $47,145 $28,697 Total Cost per Year $6,735 $4,100 Cost Per Day $ $ Weighted Average based on 21 percent new and 79 percent used ownership $ TOTAL VACATION COST CALCULATION As stated previously, the subject study involved an analysis of costs that a family of four would incur in taking different types of hypothetical round-trip vacations between each of the selected city-pairs in Canada. Tables 13a through 13e detail each hypothetical vacation s cost based on various cost components discussed in the body of this report. II-21