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Colorado RV Shows Mirror Market Resurgence

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March 26, 2010 by   Leave a Comment

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More people are answering the call of the open road, according to the Denver Business Journal.

Recreational vehicle dealers report big sales increases, and RV show organizers say there’s been higher attendance at their events in early 2010.

The number of RV units shipped from national manufacturers to dealers rose by 116% from January 2009 to January 2010, from 7,300 units to 15,800, according to the Reston, Va.-based Recreation Vehicle Industry Association (RVIA). The numbers have spurred RVIA officials to predict shipments will increase 30% this year, a predictor of vehicle sales.

That growing interest in motorized homes and non-motorized trailers was visible at two Denver-area RV shows this year. Attendance at January’s Colorado RV Adventure Travel Show at the Colorado Convention Center rose by 24% over last year. And it was up 14% at March’s Colorado RV, Sports, Boat and Travel Show at the National Western Complex, said Vilma Fraguada, regional manager for Affinity Events, organizer of both shows.

That increased interest is apparently leading to more sales. Chris Sach, vice president of RV America, said that sales at his four Front Range locations are up 22% in the first 2½ months of this year compared to the year-ago period. Buyers range across the age spectrum, he said.

There is no one reason for the jump in sales, RV officials said. But with the economy loosening up, buyers are more apt to make purchases. Also, there’s an apparent change in the way people vacation in this country.

“As people start looking for ways to spend less on vacation … an RV is a really good way to do that,” said Kevin Broom, director of media relations for the RVIA. “[The industry is] coming back. We’re not all the way there yet, but we’re on the way.”

The RV business got hit harder than many others in the past two years, as shipments to dealers fell 32.9% from 2007 to 2008 and another 30.1% the next year, according to RVIA data. Those numbers were exacerbated by the fact that while sales of lower-cost trailers fell by 26.9% last year, those of higher-cost motorized homes dipped 53.4%, Broom said.

High-end motorhomes can cost in the low six figures, and may be equipped with 32-inch TVs, surround-sound home theater systems and full-sized refrigerators.

About 6%, or 180, of the roughly 3,000 dealers nationwide at the beginning of 2008 closed by the end of 2009, said Phil Ingrassia, vice president of communications for the national Recreation Vehicle Dealers Association (RVDA) of Fairfax, Va. Fraguada said she knew of at least four Colorado dealers that closed during that time.

And Broom estimated that, counting manufacturers, suppliers and dealers, as much as 50% of the industry lost jobs in 2008 and 2009.

Lower consumer confidence and a tight credit market were the biggest factors affecting RV sales, Broom said. Potential buyers were denied loans for the six-figure vehicles, just as home buyers and startup businesses couldn’t get credit.

But things began to turn around in the second half of 2009, then jumped at the start of 2010, and the RVIA predicts 215,900 units will be shipped in 2010. Dealers are restocking, consumer confidence is at a reasonable level again and credit markets are returning to normalcy, Broom said.

RV dealers haven’t slashed prices drastically as some other retail industries have done. But they have started making former luxury features such as GPS systems and washer-dryer sets standard in their new vehicles, Fraguada said.

The newer RVs also are more fuel-efficient, appealing to people who want to travel more cheaply and be more environmentally friendly, she said.

RV America locations are attracting new customers, who talk about the advantages of being able to cook their own food and avoid paying for motels on vacations, Sach said. Longer trips are in line with the trend of families spending more time together or using vacation time to visit friends and other family members, he said.

Linda Frederickson, who is nearing retirement after 32 years as a network manager for Qwest Communications International, purchased a 34-foot motorhome for $105,500 in mid-March — and sold her Lakewood house. She hopes to travel with friends and to see family members, and she didn’t want the hassle of trying to catch flights and book rooms constantly, she said.

“I just don’t think flying or staying in a hotel room would have as much appeal for me,” Frederickson said. “This way, I can just take my time, go around and check things out. … I think I got an excellent deal.”

RVs won’t be taking over the world. The 33,683 motorhomes registered in Colorado in 2009 were just 0.7% of all vehicles registered in the state, according to the state Department of Revenue.

But Sach, who has seen several industry cycles, said this feels like a permanent shift in which people might be coming back to a home on wheels.

“I believe people are ready to have fun and spend time with their families and quit worrying about whether the market is up or down,” he said.

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