Forbes: Katrina Boosting Demand for RVs
A soft retail market has slowed recreational vehicle sales this year and caused many manufacturers to cut back on production, according to report by Forbes.
But now, sales may get a boost – and it’s from Hurricane Katrina. Like contractors who get paid to rebuild homes and buildings, RV makers figure to get a shot in the arm, as new customers looking for temporary housing and a home-based escape route for the next disaster start lining up.
Indeed, trade association officials project as many as 40,000 RVs may be needed in the wake of Katrina.
It couldn’t come at a better time for the industry, which has seen sales decline over the past year amid high gas prices. With motorhomes typically getting under ten miles per gallon, Winnebago Industries saw sales drop 15% to 20% in May and June compared to last year, according to industry analysts. Recently, the company laid off workers for the first time in ten years.
But while storms create misery for others, they can mean some relief for this industry.
RVs can be invaluable in emergencies – from high-tailing it out of harms way during a hurricane or tornado to setting up shop in your driveway during a power outage, like many on the East Coast did during the blackout of August 2003. Those who own them are usually first to evacuate during a storm. Some Florida counties actually required owners to evacuate prior to Hurricane Jeanne last August.
This year, Oak Grove City Park is among a handful of northern Louisiana towns offering free RV spaces to evacuees on a first-come, first-served basis.
For RV makers, moving big numbers of units after a natural disaster takes on a more orderly and systematic approach than it did a decade ago, as the Federal Emergency Management Agency (FEMA) has asserted more control of the process.
“When Andrew hit in 1992, we sold everything on the lot in almost no time,” said Chuck Simpson, owner of Independence RV in Winter Haven, Fla., of the customers who came randomly running to his dealership. “FEMA has pretty much taken over, getting the trucks to the affected areas.” FEMA typically deals directly with manufacturers, buying trucks and cycling them quickly through dealerships to affected customers.
Lance Wilson, head of the Florida RV Trade Association, projected that FEMA would need 40,000 RVs to meet the needs caused by Katrina’s wreckage, though agency reps didn’t return calls confirming that number. Dealers typically realize a normal profit margin, with slightly reduced prices offset by low costs brought on by the lack of need for a marketing plan.
“Dealers will sell hundreds at a time, usually routed through by FEMA,” Wilson said.