Thousand Trails: An ELS Problem That Might Create Opportunities
Equity LifeStyle Properties (NYSE: ELS) owns a business it cannot price, cannot ration, cannot exit, and cannot easily sell. It is called Thousand Trails, and the reason nobody has written this piece is that, on the revenue line, it looks too small to bother with.
As of the latest 10-K, all Thousand Trails membership revenue — subscriptions and upgrades combined — was roughly 5.3% of ELS’s total revenue. Fold in every dollar the 82 campgrounds generate, including the rent ELS collects from annual, seasonal and transient campers on those same properties, and you still land at only about 8.8%.
That is exactly why it has gone unexamined. It is also why the problem has been allowed to compound for nearly two decades.
I have read more than fifty of these legacy contracts. I am a lawyer and a retired CEO, and this is what I found.
Table of Contents
Background
ELS operates a network of campgrounds throughout the United States under the name Thousand Trails: 82 membership campgrounds holding 26,000 RV sites. Members join, and under certain terms and conditions can access the network as many nights as they please for the price of their annual dues.
Until 2025, ELS sold “lifetime” memberships. The owner paid one large lump payment up front to purchase the membership, and then paid annual dues for as long as they hold the membership. These contracts date back to the beginning of the Thousand Trails system and have existed for decades. Many of them carry frozen-dues provisions, are indefinitely transferable, and can be willed to family members.
Disclosure. I operate a resale board for Thousand Trails members, The Thousand Trails Exchange, and I consult with buyers and sellers of these contracts for a fee. I am a current Thousand Trails member, on a two-year Adventure term rather than a lifetime contract. I refer prospective buyers to Thousand Trails’ sales staff and am eligible for the company’s standard referral fee. To my knowledge I hold no position in ELS; any indirect exposure through mutual funds would be negligible. All of that gives me a commercial interest in these contracts continuing to exist and trade, and you should weigh what follows accordingly. It also cuts against me: if Equity LifeStyle Properties did what I argue here, the market I serve shrinks. This is analysis and opinion built from ELS’s public filings and from Thousand Trails contracts in my possession. Where the filings do not disclose a figure, I say so and label the inference; those estimates are mine, not the company’s, and could be resolved by disclosures only ELS can make.
PART I — THE TRAP
1. ELS cannot raise the price on the legacy book
Thousand Trails contracts are not uniform. They span four decades, several corporate owners, and more form variants than I can keep track of, so any categorical claim invites an exception. But I read and analyze these agreements several times a week, and one feature is close to universal on the modern lifetime membership: annual dues can be raised only by the change in the Consumer Price Index — and in many forms, CPI from the prior year, or even two years prior.
The language is boilerplate. Here is an example from a standard Thousand Trails National Membership executed in 2006:
ℹ️ From a Thousand Trails Contract:
“The amount of your annual dues may be increased each year… by the percentage increase in the Consumer Price Index for the calendar year prior to the year for which the increase is being made.”
Newer paperwork is, if anything, more restrictive to the operator. The 2021 Adventure upgrade and the current VIP transfer forms tie increases to CPI from two years prior — a lag that, through the 2021–2023 inflation spike, left contractual dues rising well behind both realized inflation and ELS’s own cost curve.
That is the problem in one sentence: ELS’s cost base is not capped at CPI, but its dues revenue from legacy members is. Labor, insurance, property taxes, utilities, and the deferred-maintenance and capital burden of aging RV resorts have generally outpaced headline CPI for years. Over time, operating costs grow faster than a CPI-tethered dues line, and the contribution margin on the legacy book compresses. And these are perpetual contracts — no renewal repricing, no natural runoff short of death or default.
It is worth being precise about the size of that, because the honest version is stronger than the loose one. Year by year the cost line is not a steady climb: ELS’s Core operating expenses — reported portfolio-wide, because the company does not break operating expense out by park type — ran ahead of inflation in 2020, 2021 and 2023, and below it in 2022, 2024 and 2025. Anyone who tells you Thousand Trails costs always run hot has not checked.
Compounded, it is not mixed at all. From 2019 through 2025 those costs rose about 34%. CPI rose about 26%.
Eight points over six years — and on a perpetual contract that gap never closes, because there is no renewal at which the price resets to the cost. A single year of costs running below inflation is noise. Six years of a contractual ceiling against a cost base compounding faster is a mechanism, and it runs for exactly as long as the contract does, which is forever.
It may also get worse rather than better, for reasons that have nothing to do with costs. If the members who remain are disproportionately the ones whose dues cannot be raised — which is the adverse selection described in Section 5 — then the same cost base is carried by a revenue line with progressively less room to move.
Then there is the freeze. On most modern tiers, once the original member turns 62 — or even younger on some memberships — dues are permanently frozen at the then-current dollar amount for that member’s lifetime. A subset of older contracts cap increases at half of CPI at 65.
ELS discloses the aggregate, once a year, in the Inflation section of the 10-K where almost nobody reads it: “dues may be frozen under the terms of certain contracts if the customer is over 61 years old. Currently, approximately 21.0% of our dues are frozen.”
One caution on that number, because it matters later: 21% is a share of dues, not of members. ELS has never disclosed the average frozen rate or how many contracts carry the provision. The figure was 23.1% in 2020, settled at 20% for three years, and has run at 21% since. Treat it as a share of revenue, not a headcount.
None of this is buried or ambiguous. It is in the contracts ELS inherited — and is still issuing on transfer today.
2. ELS cannot limit how much the product is consumed
Here is the part that gets missed, and it is bigger than the freeze.
Thousand Trails charges one price for an unbounded product. Dues do not vary with consumption. A member who camps two weeks a year and a member who camps most of the year pay the same amount, and nothing in the pricing corrects for the difference.
Let me be clear about where the next observation comes from: it is mine, not ELS’s. This year I have personally spent hundreds of nights in the Thousand Trails system, and a good deal of that time talking with people who live in these parks essentially full time. There are enough of them that I eventually built a tool on my own site — the Park Hopper — for the specific purpose of helping members do it.
The patterns are consistent. Some members run a circuit of nearby parks, moving park to park and cycling back through each in turn. Others simply leave for the required week out and return to the same park. At one park in California, the members serving their week out don’t go anywhere at all — they park on the road immediately outside the gate and wait.
None of this is abuse. Every one of those members is doing exactly what their contract permits. That is precisely the point. The limit does not meaningfully bind, and the dues do not move with consumption.
The gap this creates is not subtle. I pay $3,600 a year for my Adventure membership. I camp enough that it works out to roughly $10 a night. The retail rate for the site I am sitting in tonight is $57.
Every night a heavy member occupies a site is a night ELS cannot sell to a transient camper at market rate. The damage is measured in forgone revenue, not in accounting margin — and the marginal night in a desirable park in season could likely reach a multiple of five to six times more at retail than it is to the membership book.
Two honest qualifications. First, you cannot sell 20,000 sites at $57 a night, 365 nights a year — transient demand is seasonal and, as I show below, currently soft. The realized annual gap is narrower than the per-night gap. Second, the freeze compounds this but does not cause it. A member paying full current dues of $775 and camping 200 nights is producing the same problem as a frozen member doing the same thing. The dues freeze is an aggravating factor, not the disease.
3. ELS cannot shed the customer
As a lawyer, when I review Thousand Trails consumer contracts I often cringe. Almost all of them fail to contain basic, boilerplate provisions that would be standard today — all of them designed to protect the company. Many of these contracts were written decades ago, when nobody was thinking about merger clauses and exit strategy.
But that’s the problem. These contracts contain no exit strategy for the company. They are unclear as to which rights the consumer has and which rights the company reserves, and they provide ELS no effective termination provision. As long as the contract holder pays dues, they have an enforceable agreement.
Worse, many are transferable indefinitely — which means this problem never actually goes away. Someone can inherit these memberships. Literally. ELS is carrying a product that has the potential to be negative in income production for decades to come, and the contractual clock does not run out when the original member does. They guaranteed access not only for their members’ lifetimes but for the lifetimes of their heirs.
ELS’s own language acknowledges the shape of it. From the FY2025 revenue recognition note: members in good standing are entitled to enhanced benefits “for as long as they choose to remain in the program.”
4. ELS cannot sell the asset
The legacy contracts create a real impediment to ELS’s ability to monetize these campgrounds. ELS can close or sell an individual park — its contracts permit that. What it cannot do cheaply is monetize the real estate at scale.
Some of the older legacy contracts guarantee a member-to-site ratio. The ones I have seen specify 10:1. On current numbers that covenant is nowhere near binding: 108,731 members against roughly 20,000 member-available sites is about 5.4 to 1.
But read it again, because that covenant is not really about selling parks at all. The denominator is sites made available to members. Which means it binds on two things at once, and the second one matters more day to day than the first.
It constrains disposition: sell half the parks and the ratio doubles toward the cap.
And it constrains conversion: every site ELS pulls out of the member pool and rents to an annual or transient camper shrinks the same denominator. The covenant is therefore a direct cap on how much retail inventory ELS can create inside the parks it already owns — which is exactly the lever Part II is about. You cannot reallocate your way to a better yield past a contractual floor on member capacity.
Running the arithmetic on the disclosed figures, and reading the ratio the way the contracts I have seen appear to state it, ELS has headroom of roughly 9,000 sites before a 10:1 covenant would bind. That is a real number, and it is the first time I have seen anyone put one on it.
| Covenant arithmetic, year-end 2025 | |
|---|---|
| Total memberships | 108,731 |
| Membership sites | 26,000 |
| Less: sites rented to members on an annual basis | 6,014 |
| Sites available for member reservations | ≈ 20,000 |
| Members per available site | 5.4 : 1 |
| Sites required to hold 10 : 1 | 10,873 |
| Headroom before the covenant binds | ≈ 9,000 sites |
Two things to note about it. It cuts both ways — as the member base shrinks, the covenant loosens, so every member who leaves buys ELS a fraction of a site of reallocation capacity. And it is not knowable from outside how many contracts carry the provision, whether a court would read the ratio portfolio-wide or park-by-park, or whether the member side of the ratio counts every member on the books or only the holders of the contracts that carry the covenant. Nobody knows which until a court decides.
Then there is state law. ELS discloses the risk in the same words every year:
ℹ️ From the filing
“In some states, including California, Oregon and Washington, laws place limitations on the ability of the owner of a campground property to close the property unless the customers at the property receive access to a comparable property.”
Sixteen of the Thousand Trails parks are in California.
And the filings show what happens when a park does close, even temporarily. Turtle Beach and Rancho Oso were “closed temporarily due to storm and flooding events in 2023.” Rancho Oso was still flagged as closed in the FY2024 10-K, with roughly $6.6 million of subsequent cost added to its basis. Those were acts of God, not business decisions — but they are the only live test in the filings of what a closure does to a network sold on the promise of access to a fixed set of parks.
In effect, the 82 Thousand Trails parks — ELS is stuck with them. The land is worth more sold; the membership contracts make selling it at scale legally radioactive and financially unquantifiable. And because the contract book is non-uniform and un-searchable, ELS cannot even price which dispositions are safe.
5. And the book is getting worse as it shrinks
This is the part that should make an operator genuinely uncomfortable.
Start with the denominator, because it has not moved. ELS discloses 82 membership campgrounds holding 26,000 RV sites, and that site count has been flat since 2023 — no expansion, no contraction. Roughly 6,000 of those sites are rented to members on a full-year basis, which takes them out of the pool available for member reservations. Call it 20,000 sites in the bookable inventory.
Now the numerator. Total memberships peaked at 128,439 at the end of 2022. They stood at 113,553 at the end of 2024, 108,731 at the end of 2025, and 107,857 as of June 30, 2026 — down 16% from the peak. Paid membership originations fell from 23,237 in 2022 to 17,150 in 2025. What that count is actually made of — free trials, paying members, and which product each holds — is the subject of a separate piece: Is Thousand Trails Membership as Healthy as ELS’s Member Count Suggests?
Put them together and you get roughly 6.6 members per available site in 2022, and roughly 5.4 today. An 18% improvement in loading — achieved entirely by losing customers.
A campground is a fixed-cost business. The staff, the insurance, the property taxes, the mowing, the water and sewer plant, the roads — those costs exist whether the park runs at 60% or 95%. They do not scale down when a member cancels. Which means the right way to think about a legacy member is not “is this member profitable after allocated overhead,” it is “does this member’s dues check contribute anything toward a cost base I am paying regardless?”
For most of the book, the answer is yes, and emphatically so. A member paying $775 in base dues who camps fifteen nights a year costs ELS almost nothing at the margin. Nearly the entire check falls through to covering fixed cost. That member is not a problem. That member is the reason the fixed cost base gets covered at all.
The problem is the other population — the heavy user described above, frozen or not. That member is destructive not because of overhead allocation but because of opportunity cost.
So when the member base shrinks by 16% in four years, ask which population is leaving. It is not, for example, the 62-year-old with frozen dues camping 250 nights a year; that member is receiving the most value the contract has ever produced and has no reason to walk. It is the light user — the one whose dues were nearly pure contribution — who quietly declines to renew.
That is adverse selection, and it runs in exactly the wrong direction. The book does not merely get smaller. It concentrates toward its worst-economics customers while shedding its best ones, against a fixed cost base that does not shrink to match.
And ELS discloses the concentration itself, once a year, in that same Inflation paragraph. The frozen share of dues was 20.0% for 2022 and approximately 21.0% for each of 2024 and 2025. Over that same stretch the paying, non-trial membership base fell from roughly 102,400 to 88,000 — a decline of about 14%.
A legacy cohort that was simply aging out would show a falling share. A cohort that holds its share while the base beneath it shrinks is either replacing itself as fast as it dies off, or churning materially more slowly than everyone else. Both readings point the same way.
That is the share. Put it in dollars and it gets harder to explain away.
The dollar figures below are my arithmetic, not ELS’s: the disclosed frozen share applied to the disclosed subscriptions line. ELS reports no frozen-dues dollar figure, and since 2025 the subscriptions line also carries the new term-upgrade products, so treat the pool as an estimate with the range given below rather than a company number.
| Year | Subscriptions revenue | Share frozen | Frozen dollars | Total memberships |
|---|---|---|---|---|
| 2022 | $63.2M | 20.0% | $12.6M | 128,439 |
| 2023 | $65.4M | 20.0% | $13.1M | 121,002 |
| 2024 | $65.9M | 21.0% | $13.8M | 113,553 |
| 2025 | $69.3M | 21.0% | $14.5M | 108,731 |
| Change | +15.1% | −15.3% |
Frozen dues cannot rise on any individual contract. That is the entire function of the provision. If that estimate is right, there is only one way the frozen dollar pool grows: contracts entering the freeze faster than frozen members leave it.
By that estimate, between 2022 and 2025 the pool grew about 15% — while the membership it sits inside fell about 15%.
ELS rounds the frozen share to the nearest half point, so it is worth running the arithmetic across everything the disclosure permits. Take the most conservative pairing and the pool still grows 9.6%; take the most aggressive and it grows 20.8%. There is no reading of the rounded figures on which it shrinks.
Every year, more contracts cross 62 and lock. The cohort that cannot be repriced is getting larger in dollars inside a book that is getting smaller in members — and that is the concentration, stated in money rather than percentages.
Which produces a genuinely strange result, and one worth stating plainly for the members reading this: the camping experience is improving precisely because the business is deteriorating. Fewer people competing for the same 26,000 sites means easier reservations. Every member who cancels makes the membership marginally more useful for the ones who stay — and marginally less sustainable for the company that has to keep the lights on.
Part of this is outside ELS’s control. RV travel has had a hard four years; RV retail sales fell from 516,565 units in 2021 to 318,863 in 2025, down 38%. But the lifetime contract model discouraged investment and upkeep in these parks, which makes it harder to sell memberships now, because many parks need basic infrastructure work — let alone the modernization that would bring them up to current standards for destination RV resorts.
THE TURN: what is already visible in the numbers
There is a second, quieter drag on this book, and unlike the dues cap it is not a matter of contract interpretation. It is disclosed, arithmetic, and already in motion.
Under Note 2 of the 2025 Form 10-K, non-refundable upfront payments on the legacy products are recognized on a straight-line basis over 24 years and presented within Membership upgrade revenue. Not 24 months. Twenty-four years.
A $16,000 lifetime Adventure membership (a top price with no discounts prior to their discontinuation) — and that is a market price point I know from the resale side, not a figure from the filings, where the implied average contract works out closer to $6,700–$9,200 — converts to roughly $667 of recognized revenue a year, every year, until roughly 2049. The selling and marketing cost to land that member was expensed far faster. ELS has told its own shareholders, in prior filings, that this mismatch means it may incur a loss on entering an upgrade contract.
The consequence is that the Membership upgrade revenue line is now in structural runoff. ELS stopped selling upfront-payment products in the first quarter of 2025, which means no new dollars are entering the deferred revenue balance. The roll-forward makes the shape of it plain. New deferrals collapsed from $27.5 million in 2024 to $6.7 million in 2025 — a 75% drop. Revenue recognized out of the pool ran $16.4 million in 2024 and $13.7 million in 2025. For the first time, the balance — carried in Note 11 as deferred revenue from upfront payments on membership upgrade sales, and sitting inside the $221.5 million of deferred membership revenue on the balance sheet — is draining rather than building: $218.2 million at the start of 2025, $211.2 million at the end.
Let me be precise about what is declining, because this is where people get it wrong. Total member-paid revenue is not falling off a cliff. The new term upgrades get booked in Annual membership subscriptions instead of in Membership upgrade revenue, so the upgrade line loses that money and the dues line picks it up. What is declining — mechanically, predictably, and with no management discretion available to stop it — is the Membership upgrade revenue line, which now has roughly two decades of runway and nothing behind it.
For an operator, that is not a crisis. It is a known, non-cash amortization schedule. But it is worth saying plainly what it means: a line item that produced $16.4 million two years ago is contractually committed to trending toward zero.
PART II — THE EXIT
Having now spent an inordinate amount of time considering the issue, what’s the reasonable solution?
6. ELS has already accepted the diagnosis
In the first quarter of 2025, ELS stopped selling lifetime upgrades and the in-house financing behind them, and switched to two-to-four year term products.
The revenue-recognition improvement is easy to miss and enormous. Under the legacy structure, a dollar collected converted to roughly four cents of recognized revenue in the year of sale. Under a term subscription, a dollar collected is a dollar counted. ELS disclosed the new economics itself: two-year products priced at $4,000 to $8,000 and four-year products at approximately $7,000 to $14,000, producing what the filing describes as approximately $2,500 to $3,000 of earned revenue on an annual basis. Against roughly $667 a year from a $16,000 lifetime sale, that is a four-fold improvement in annual recognized revenue per member — on a product that collects materially less total cash.
But the biggest win was not revenue recognition. It was getting rid of the price cap. ELS bought itself the flexibility to change price rather than track CPI, to charge a true market rate, to shed the uncertainty of perpetual obligations, and to begin the long process of clearing up the legal ambiguity around these agreements.
So the diagnosis is not mine. ELS made it, and acted on it, for every contract written from 2025 forward. What remains is the book written before that.
7. The conversion play
The obvious move is a buyout — pay legacy holders to surrender their contracts. It is also the wrong structure, because it spends cash ELS does not need to spend.
The better structure is a conversion offered in kind. Give the legacy holder a fixed term of the product ELS is already selling — two to four years of use — in exchange for surrendering the perpetual contract. At the end of the term the contract is gone, and the member either re-enters at current pricing or exits.
No cash leaves the building. And the thing ELS gives up is a service it was already obligated to provide in perpetuity.
Under the revenue standard, a modification of this kind can be accounted for as a termination of the existing contract and the creation of a new one, with the unrecognized balance rolling into the new contract and recognizing over the new term. In plain terms: a legacy holder’s slice of that $211.2 million deferred revenue balance, currently amortizing at about 6% a year, would instead be recognized over two to four years.
Here is where I have to be careful, because the temptation is to overstate this. The $211.2 million is not sitting there waiting to be claimed. Three constraints, all real:
It is not immediate, and it is not the whole balance. Only the slice belonging to members who actually accept the offer moves, and it recognizes over the new term, not on signing.
Roughly a quarter of it is already spoken for. ELS carries a deferred commission asset of $58.1 million — commissions paid in cash years ago and not yet expensed, sitting at 26–28% of the deferred revenue balance. Terminate the contract and that asset comes off against the released revenue.
And the offset is largest exactly where it is least needed. Take a member who bought a $16,000 Adventure upgrade in 2024. About $2,000 has been recognized and roughly $14,000 is still sitting in the deferred revenue balance. Pay that member $5,000 to surrender the contract and ELS comes out meaningfully ahead on the income statement. Now run the same deal on a 2006 upgrade: after twenty years of amortization there is almost nothing left in the bucket, and the payment is close to pure cost. The accounting cushion is biggest on the newest contracts and vanishes on the oldest. Which is backwards from the problem, since the old contracts are the ones with the frozen dues, the 10:1 covenants, and the inheritance rights.
So the honest formulation is this: the deferred balance could substantially offset the cost of a conversion program. It does not pay for it.
8. The objection that has to be answered
Offer free camping in exchange for surrendering a lifetime contract and watch who takes it. The light user accepts — their contract isn’t worth much to them. The heavy user with frozen dues refuses, because theirs is worth a fortune.
Run an open program at one price and you would strip out the good customers a second time and concentrate the book further. Adverse selection does not stop at attrition; it recurs at the offer.
That objection is fatal to a naive program and entirely answerable in a real one. ELS knows exactly who the heavy users are. It holds every reservation record for every member in every park. This is not an open offer at a single price — it is a set of targeted, tiered offers sized to actual usage, expensive for the members who cost the most and cheap or unnecessary for the ones who cost nothing.
That is also the difference between a press release and a plan.
9. What it unlocks
Before the specifics, the evidence that repricing is where the money actually is. ELS has already run this experiment, on itself, over the same three years.
| Revenue line, 2022 → 2025 | Governed by legacy contracts? | Change |
|---|---|---|
| RV & marina annual rental — whole ELS portfolio | No | +21.1% |
| Annual RV base rental — at the 82 membership parks | Conversion capped by covenant | +17.7% |
| Annual membership subscriptions — dues and camping passes | Yes | +9.6% |
| Membership upgrade revenue | Yes | −4.2% |
| Seasonal / transient rental — at the 82 membership parks | Conversion capped by covenant | −17.9% |
| All 82 membership campgrounds, total | +4.3% | |
| Memo: CPI | +9.9% | |
| Memo: ELS Core operating expenses | +10.9% |
Same company. Same three years. Same business of renting RV sites. Where ELS is free to set a price annually at whatever the market will pay, revenue grew 21%. Where the legacy contracts govern, it grew 9.6% and fell 4.2% — at or below the 10.9% its own costs rose over the same period. The 82 membership campgrounds in aggregate grew 4.3%.
That gap is the price of the contract book, and it is not an argument — it is ELS’s own disclosure, divided into two columns.
Two honest qualifications before anyone uses that 21% against me. Portfolio-wide annual rental growth includes site conversions and acquisitions across more than 450 properties, so it is not purely rate. And the 2025 Annual membership subscriptions figure is flattered by the term subscription upgrade revenue reclassified into it. Neither changes the direction, and the membership campgrounds were held at 82 parks and 26,000 sites throughout — which makes their numbers effectively same-store, and makes the comparison, if anything, generous to the membership side.
Repricing the site. Converted inventory can be sold at a market rate instead of a CPI-tethered one. Here I want to be straight about the data rather than cherry-pick it: at the 82 membership campgrounds, annual RV base rental income rose from $25.9 million in 2022 to $30.5 million in 2025, up 17.7% — and on fewer annual sites, so that is rate, not volume. Over the same period seasonal and transient rental at those parks fell 17.9%, from $24.3 million to $20.0 million. Total revenue at those 82 parks went from $129.1 million to $134.6 million. Three years. Up 4.3%.
So the broad opportunity is annual conversion, which is where the realized rate growth actually shows up, and which is exactly where ELS’s whole portfolio has been drifting: annual sites’ share of RV and marina rental income across the whole portfolio rose from 67% to 72% between 2020 and 2025.
But the annual number understates the prize, because it averages the whole year and the whole portfolio. The real money is retail inventory at the right parks in the right season. A site on the Oregon coast in July, or in Florida in February, does not rent for an annual-lease average — it rents at the nightly rate, and that is where the gap between a member night and a retail night is actually collectible. ELS does not need to convert 20,000 sites. It needs to convert the sites where demand is provably there, in the weeks when it is provably there, and those are precisely the sites and weeks the heavy legacy user is occupying.
Covenant headroom. Roughly 9,000 sites of it, and it grows with every member who leaves or converts — which is the only reason the reallocation above is available at all.
Disposition flexibility. ELS cannot effectively sell properties, liquidate, or otherwise convey Thousand Trails as an asset until the contract question is resolved. Resolving it is what makes the real estate transactable.
10. The same move protects the members who stay
Section 9 and this section are not two separate benefits. They are one action described from two sides, and that is the part I most want a reader from ELS to see.
Retire the heaviest legacy users and you free the highest-value inventory for nightly retail at five to six times the yield. You also, in the same stroke, take pressure off the reservation system for everyone still paying. Those are the same sites. A park that is impossible to book in July is impossible to book because it is full — and it is full of members paying an average of ten dollars a night for it.
That matters commercially, not sentimentally. Pack too many members onto too few sites and the people paying full current dues cannot book anything, so they leave — and as established above, they are exactly the members ELS can least afford to lose. The conversion only works if the product stays worth having. Shedding the heavy tail is what keeps the service level high enough that the profitable base renews, while simultaneously freeing the weeks that are worth the most at retail.
So the play is not to terminate the membership business. In a fixed-cost business, dues-paying members guaranteeing a baseline are genuinely valuable, and Thousand Trails members have real worth to the parent. The problem is the class of holder, and the fact that the legacy book prevents efficient allocation of capital through strategic divestiture or acquisition.
The play isn’t to terminate the membership program. It is to increase paying retail while retiring the most problematic contracts.
There is a third lever ELS has barely touched: enforcement. Transfer provisions, good-standing requirements, and the conditions attached to inheritance are contractual terms that exist in the paperwork and are, in my experience on the resale side, applied inconsistently. Tightening that does not require anyone’s consent. It requires reading the contracts.
And there are further structures available that I am not going to lay out here. Some of them run the other direction entirely — rather than paying legacy holders to leave, ELS could make the term product decisively better than the perpetual one and let members convert themselves: exclusive access to premium or waterfront sites, priority booking windows, guaranteed reservations in peak weeks, benefits that a 1987 contract never contemplated and cannot claim. A conversion nobody has to be bought out of is cheaper than one that requires a check. There are several more variations on that idea, and a few narrower legal ones, that are worth more as advice than as a blog post.
11. What ELS should disclose
Here is the part I cannot resolve from the outside, and neither can any analyst.
Nobody outside the company knows how many contracts carry frozen dues. Nobody knows how many lifetime contracts remain outstanding. ELS knows all of it. Membership has never been a reportable segment, it sits at 5.3% of revenue, and so none of it is required disclosure.
The result is a $211 million liability whose disposition turns entirely on counts the company holds and does not publish.
Meanwhile, the one number that captures the whole trajectory has already turned. By my calculation from the cash-flow statement, in 2021 ELS deferred $20.9 million more in new membership payments and capitalized commissions than it recognized from prior years. In 2025, by the same method, it recognized $9.4 million more than it newly deferred. The income statement is now living off collections from earlier years, with $211 million still to run through it. The gap has flipped.
It is time ELS fessed up to the mess and created an exit strategy. There are legal methods to begin limiting exposure on these legacy products. There is an accounting cushion — a real one, though smaller and more lopsided than it first appears — to soften the transition years. And there is a version of this company on the other side of it that can actually price its own product.
The alternative is to keep amortizing a twenty-four-year schedule against a book that concentrates toward its worst customers every year it shrinks, and hope nobody does the arithmetic.
All figures are from ELS’s SEC filings — Forms 10-K for 2020 through 2025 and the Q1 and Q2 2026 supplemental packages — except where identified as my own observation, my own calculation, or my own knowledge of the resale market. Contract language is quoted from executed agreements in my possession.
Republication: the analysis and figures in this article may be quoted or republished with attribution to Ty Chapman and Live Free RV and a link to this page.
Ty's TakeAways.
ELS owns a business it cannot price, cannot ration, cannot exit, and cannot easily sell — and on the revenue line it looks too small to bother with. That is exactly why it has gone unexamined.
Dues on the legacy book are capped at CPI and freeze permanently at 62. ELS’s cost base is capped at nothing. Over time, that gap compounds — and on a perpetual contract it never closes.
The book concentrates toward its worst-economics customers while shedding its best ones. The frozen share of dues held at 20–21% while the member base fell 16% from its 2022 peak.
The $211 million deferred revenue balance is in structural runoff. No new dollars are entering the deferred revenue balance, and membership cash has already flipped from running ahead of GAAP revenue to running behind it.
The exit is an in-kind conversion, offered in tiers — not an open buyout. The deferred balance could substantially offset the cost. It does not pay for it.
ELS holds every count that would size this. It has never published one of them.
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