The future of KOA

2012-08-19T00:00:00Z 2012-08-20T09:05:07Z The future of KOABy JAN FALSTAD jfalstad@billingsgazette.com The Billings Gazette

Chinese-American billionaire philanthropist Oscar Tang, who bought and privatized Kampgrounds of America 32 years ago, said he has no plans to sell or move the company from Billings.

“It’s a very professionally run company. Their values are very close to mine, so I haven’t had to micro-manage,” Tang said.

In a Tuesday interview with Tang at his New York City office, he said owned between 20 percent and 30 percent of KOA when he spotted an opportunity to buy the company in 1980 at a deep discount. U.S. travel dropped sharply as gas prices spiked following the 1979 Iranian Revolution. RVs were considered “dinosaurs” and KOA’s stock tanked.

In 1962, Billings businessmen David Drum and three partners who wanted to capitalize on the stream of travelers heading to the Seattle World’s Fair, started Billings Campgrounds, now KOA.

Billings had no campgrounds and city officials, fearful of tourists flooding into the parks, agreed to extend city services over to Drum’s first site on Garden Avenue north of the Yellowstone River near the expected route of the future Interstate 90.

KOA was the first to succeed in building a national network of campgrounds and survived the energy crises that destroyed a majority of competitors. Tang paid an undisclosed amount for KOA at a fire sale because the stock was so low, using what is now called a leveraged buyout. Using his 20 to 30 percent stock ownership as collateral, Tang convinced a bank to give him the money to buy KOA and then paid back the bank relatively quickly.

“I could have sold it in a few years after buying it and had a great rate of return,” Tang said. “But it’s a wonderful business in a stable environment.”

Since then, he’s rebuffed numerous offers to sell. Tang will be in Billings on Aug. 20 for KOA’s annual board meeting.

Tang doesn’t have to disclose sales or earnings of KOA because it’s now privately held. A Dun & Bradstreet estimate that KOA produced $40 million in revenues last year is accurate, he said, but it only counts the 26 company-owned campgrounds, not revenues from the other 484 sites owned by others through franchise agreements.

Saying KOA’s leaders have always shared his values, Tang said Jim Rogers, a “people person” who he hired as chief executive a dozen years ago, has re-energized the company.

In the next 50 years, KOA will grow larger by buying campgrounds or convincing independents to join the company, he said.

The focus on destination campgrounds near popular vacation spots will continue, he said, because camping in a tent, an RV, or a cabin is taking the place of vacation homes for many families.

Overseas growth also is a possibility.

KOA already sells its professional-service systems to a campground company in Australia and is eying Tang’s homeland.

“We are interested in what’s happening in China,” he said. “There is a phenomenal number of highways being built there and people want to see their country.”

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