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Monaco Coach Banking On RV Parks

Company hopes the resorts will help improve what has been a tarnished year so far, having been hit hard by high gas prices and weakened consumer confidence.

COBURG, Ore. (AP) -- With gas at more than $4 a gallon, will anybody show up at a new multimillion-dollar RV resort? Coburg-based Monaco Coach, a top manufacturer of motor homes, is banking on it.

Monaco recently announced it is forming Signature Resorts to manage and develop the company's RV resorts.

Monaco had developed RV resorts in places such as Indio, Calif. and Las Vegas. Signature Resorts will now act as an offshoot of the 40-year-old RV company.

Monaco's next two developments, in Harbor Bay, Mich. and Naples, Fla., will open under Signature Resorts' branding.

With a tennis court, a putting green, a clubhouse, an outdoor pool and a spa, Harbor Bay will open this summer, followed by the one in Naples.

Monaco hopes the resorts will help improve what has been a tarnished year so far. First-quarter figures show a company hit hard by high gas prices and weakened consumer confidence.

First-quarter revenue for the coach company in 2008 was $252 million compared to $322 million for the first quarter of 2007. Gross profit dropped from $36 million a year ago to $15 million this year.

In April the company blamed a drop in consumer confidence for the first-quarter losses.

Monaco Coach CEO Kay Toolson promised changes, including layoffs and a refocusing of corporate energy.

In a similar move, Oregon-based RV manufacturer Fleetwood announced recently it would be laying off 60 Oregon workers due to weak sales caused by high gas prices and low consumer confidence.

Monaco Coach's RV resort segment also felt market deviations during the first quarter of 2008 and saw a drop in revenue from $7.2 million in 2007 to $2.4 million.

Still, the company believes in its ''if you build it, they will come'' philosophy.

Craig Wanichek, Monaco's Director of Investment Relations, said the RV resorts were not profitable during the first quarter due to few available units. The two new developments are intended to add more inventory and help profits.

''What we should have done (a couple of years ago), was develop another resort to have a consistent revenue stream for this segment,'' Wanichek said.

Gregg Mindt, president of the Oregon Lodging Association, said if RV owners are driving less to save gas, then smaller, more localized RV resorts may benefit.

He said RV owners will want to stay closer to home, pay less for gas and stay at one resort longer.

Signature Resorts' president, Randall Henderson, agreed and said for that reason Signature Resorts plans resorts in the Florida Panhandle and the Texas hill country, to spread out and diversify the company's real estate holdings.

''It would be nice to have nearby facilities,'' Henderson said. ''It's not necessary, just because you have an RV, to be totally nomadic.''

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