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ON THE LINE: Garpow on Residential RV Trends

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November 13, 2009 by   Leave a Comment

Bill Garpow

Bill Garpow

PUBLISHER’S NOTE: Among the more thought-provoking conversations we encountered at the National Association of RV Parks and Campgrounds’ (ARVC) 2009 InSites Convention and Outdoor Hospitality Expo this week (Nov. 9-12) at the Orange County Convention Center in Orlando, Fla., involved exhibitor Bill Garpow, executive director of the Recreational Park Trailer Industry Association Inc. (RPTIA). Garpow, based in Newnan, Ga., voiced concerns in this brief interview about a creeping trend that most in this industry are well aware of by now: RV’s designed for leisure pursuits being used by a growing number of hard-pressed Americans as residences during the ongoing recession. Here’s the crux of that conversation:

RV BUSINESS.com: Bill, we’re all aware of an increase in destination-style “camping” in units generally designed for longer term use. That’s a trend with which we can all live. But now we’re seeing news reports about people settling into recreational park trailers and conventional RVs for full-time habitation, which has caught many in this business off-guard. It’s an emerging trend, is it not?

Garpow: It is. The last thing in the world that a park owner wants to have is a school bus stopping at the front gate and picking up kids from his park. That’s the final warning call to a local unit of government. And it means approximately $6,000 to $12,000 per child that somebody has got to pay for in school taxes, property taxes. And they’re not getting it from the RV parks right now. That’s not to say that if the trend continues they won’t find a way to get it because they probably will.

RV BUSINESS.com: That certainly couldn’t be viewed as a good thing for the recreational vehicle sector.

Garpow: We don’t want that — don’t need it, can’t use it. It would just increase the heck out of the cost of a camping site. If we want to maintain the industry the way it is, we’ve got to be very careful about allowing recreation vehicles to be used as residential property.

You’re talking about mixing good people who are using it (the RV) the way it should be used as a vacation and seasonal dwelling — people of stature, people of means that come to your park and they spend money while they are there and their kids have a great time. And when they’re done – or if they have a problem — they go home. They don’t leave that problem and put it on the local unit of government to try to solve it for them.

Quite frankly, they don’t have squabbles in the household, if you know what I mean. You don’t have the police department out there at 2 o’clock in the morning trying to straighten out a man and a wife that have gotten into a (loud) discussion.

RV BUSINESS.com: You are frankly talking about something – the residential aspects of recreational vehicles – about which this business arena has always been quite wary. Certainly, your typical mainstream park operator wouldn’t want any part of it. Nor would the members of the Recreation Vehicle Industry Association (RVIA), which has always tried to keep its distance from all this for a variety of reasons, especially with regard to federal standards pertaining to residential dwellings.

Garpow: The recession has kicked that particular use up, and we’re seeing more and more of it. Unfortunately, when a park owner lets that genie out of the bottle and has people in his park using it as a domicile, chances are pretty good that those folks aren’t going to mix real well with your standard camping family.

As a matter of fact, they will probably have an attitude because, after all, the way the full-time resident sees it, ‘I live here and you’re only here for a weekend or 10 days, and when you’re here, you’re a pest. You pull in to the campsite at 10 O’clock at night when I’m watching my favorite TV show and it’s disruptive and I don’t like it.’ It doesn’t take too long for our good camping customers to figure out that ‘we’re not really appreciated here anymore.’ And what are they going to do? They’re going to go some place else.

So, what is the campground owner going to be left with? He’s going to be left with a trailer park. It’s going to be full of people who are going to be living as full-time residents and it’s going to be very difficult to convert back to an RV park.

RVBUSINESS.com: So, you’re essentially talking about crossing that long-held divide between a “campground” and a “trailer park.”

Garpow: Kind of, except that you are going to be using less than a manufactured housing park (in terms of space and infrastructure) to do it. You are using something that is smaller, tighter and less expensive. And guess what? That’s the kind of folks you are going to attract — people that can’t afford anything else.

It frightens me, and the reason it frightens me is because, long term, we’re dependent on the local units of government to welcome recreation vehicle parks with open arms into their community.

They are an asset. People come from other locations, and while they are in that park, they spend money at the park and in the local community. They go out to eat and they buy gasoline and groceries and they entertain themselves. It has an economic impact on the community.

It was money that was earned someplace else, so it doesn’t take any jobs away from the local community. The economic largess is wonderful. In the past, that’s worked for us. But if you suddenly bring in people of lesser means who don’t have the capability to do any of these things, and they start sending kids to school and they start imposing on government services, suddenly the welcome mat is going to be pulled out from underneath us.

RVBUSINESS.com: Before we close out here, Bill, we probably ought to ask you about the current state of the recreational park trailer marketplace.

Garpow: We’re down about 55% from the high that we had for 12-wide units. Things are starting to pick up a little bit as they are for other segments. Some of the manufacturers have even got a little bit of a backlog, which is great news. I hope we don’t run into supplier problems. We may see some of that because we’ve never experienced a deep, long-term turndown like this before.

We’ve had some deep ones before. I remember back in 1979 during the gas crisis. That was deep, but within six months we were back where we were.

But this time, we’ve had some suppliers that have basically shut off their ability to produce and we may have some difficulty obtaining OEM parts.

RVBUSINESS.com: So, the recovery at this point is real?

Garpow: I think we’re seeing it. We still have a problem with financing. That’s going to take some time. We still have a problem with the consumer who lost a lot of their 401(k) in the market. But fortunately, some of that has come back. We’ve also had some people, worse than others, take a real hit in the value of their primary residence that could be as much as 40% in some cities. But in other locations it hasn’t been too bad. If you look at it, those places that experienced great galloping increases in the last 10 years or so (in real estate) are the ones getting hit with the great galloping decreases in value.

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