Report: Campground Sector to Grow During ’13
Editor’s Note: The following information appears in a news release issued by IbisWorld.
The Campgrounds and RV Parks industry was not immune to recessionary declines. Cutbacks in travel and falling recreational vehicle (RV) sales contributed to disappointing years of decline in 2008 and 2009 when industry revenue fell 6.0% and 1.8% respectively. “The industry finally started its recovery in 2010,” IBISWorld industry analyst Stephen Morea says. Aided by strong job growth, increasing disposable income levels and increased domestic travel, the industry rebounded, offsetting any declines experienced during the recession. In the five years to 2013, IBISWorld expects revenue to increase at an annualized rate of 2.4% to $5.0 billion.
The campgrounds and RV parks industry is driven by a number of factors including the state of the economy and other travel-related trends. “During the recession, people cut back spending on luxuries like vacation and travel,” Morea says. In 2009, domestic travel fell 5.1% and international arrivals into the United States declined 5.2%, adversely affecting the industry.
Starting in 2010, incomes started to rise again and people began to spend more freely; travel rates subsequently improved. Adults older than 50 years old, also known as the baby-boomer generation, are a key customer segment for RV dealers and the campgrounds and RV parks industry. During the five years to 2013, the number of adults aged 50 and older increased at an annualized rate of 2.2%, which contributed to greater industry revenue growth. All of these factors contributed to industry revenue’s expected growth of 3.6% in 2013.
The campgrounds and RV parks industry has low market share concentration, with the four largest companies in the industry controlling less than 5.0% of industry revenue. Currently, the industry’s largest companies include: Equity LifeStyle Properties, Kampgrounds of America Inc., Outdoor Resorts of America Inc. and International Leisure Hosts Ltd. The industry is comprised of mostly smaller establishments; however, consolidation in the industry has become more commonplace. Low interest rates have provided the industry’s largest companies with access to capital and sound amounts of financial resources, allowing them to expand, consolidate and upgrade existing properties. An example of such a consolidation was Equity LifeStyle Properties acquisition of Thousand Trails, which was a RV and outdoor-vacation membership business.
A potential threat to the industry is any further strength in the U.S. dollar, because a stronger dollar makes it more attractive for U.S. residents to travel abroad. Another possible threat to the industry would be a rise in fuel prices, as, RV and campground patrons are often required to travel to their destination by automobile. In the five years to 2018, IBISWorld estimates that the world price of oil will increase. Nevertheless, steady economic growth and favorable demographic trends are expected to propel industry growth past these concerns. During the five years to 2018, industry revenue is forecast to increase. For more information, visit IBISWorld’s campgrounds and RV parks in the U.S. industry report page.