America is going camping and the latest reports confirm the trend I wrote about in an earlier story. Winnebago and Thor both posted record earnings in their latest quarters with sales up over 20%. Overall, the RV industry is crushing it. RV dealers are making record profits and many are surprised to be catering to younger buyers. More than half of new RV buyers are under the age of 45.
That’s welcome news to the camping and RV industry which suffered a sharp decline in the days after the great recession of 2008. The credit markets froze, bringing new RV sales to virtual standstill. Americans were sweating their next job, not really thinking about taking the kids on vacation to the mountains. I remember those dark days vividly. Many mom and pop campgrounds threw in the towel and went out of business. Today the camping business is back and KOA is having their best season in nearly 60 years.
Smaller Is Huge Right Now
You can call this the Age of the Teardrop Camper because, despite lower gas prices, customers are flocking to smaller campers trailers that can be towed behind an SUV or minivan. You can see the difference at RV shows. Ultralight, teardrop and feather weight campers are taking up more and more of the floorspace and accounting for a larger percentage of sales. While coach style RVs are comfortable, there’s a price tag associated with that convenience.
Working On The Road
Younger people, millennials in particular, make up about 31% of the population. In campgrounds and RV parks they’re now making up 38% of campers. Just a few years ago campgrounds and RV parks were almost exclusively retirees but not anymore. Today your neighbors are just as likely to be a younger couple. For many young people owning an RV is more appealing than owning a home. Many are working on the road and from their camper.
Young people may have an ulterior motive when it comes to camper living. Sure, it’s fun to travel but many of them are using campers, vans and RVs as emergency backup housing. If they’re relocating to a new area, they’re using the camper as temporary housing so they make better decisions on where to buy or rent in a new town. As rents and home prices continue their insane upward spiral, more people are turning to RV, van and camper living as an affordable alternative.
Hotels Can Suck It
The appeal of campers and RVs has been polished by the unrestrained greed of the hospitality industry. When you stay at a hotel these days you’re paying between 20% and 25% taxes and on top of that are fees for parking, WiFi and monetary booby traps like minibars. One of my personal fee gripes are resort fees. Instead of a pool and a gym being a competitive selling point, the hotel is charging you for things that you don’t always use. Hotels use fees so they can cheat on advertised rates. Fees, bedbugs and noisy neighbors are prompting more people to give big hotel chains, like Hilton and Starwood, the middle finger. The last straw for me on fees was a fee on our dinner check at Margaritaville in Hollywood, Florida.
The RV industry has challenges ahead, so don’t pop the champagne just yet. The industry is facing rising labor costs with limited ability to export jobs like other manufacturing industries have done. To increase their margin they start making components cheaper. Start fielding crappy campers and the market will turn on them. Then they’ll be stuck with warehouses full of brown furniture.