Power Breakfast Covers Wide Range of Topics
An impressive gathering representing a broad cross-section of the northern Indiana RVing sector, along with ranking members of Elkhart County’s government and educational communities, met Thursday morning (May 8) at the 2nd Annual RV Industry Power Breakfast to assess the impacts — good and bad — of an industry finding another gear in 2014. Also appearing, via remote linkup from Washington, D.C., was U.S. Sen. Joe Donnelly (D-Ind.) and U.S. Rep. Jackie Walorski.
The event, facilitated by RVBusiness magazine and BJ Thompson Associates, drew nearly 560 people to the Northern Indiana Event Center – part of the RV/MH Hall of Fame complex situated on the northeast edge of Elkhart County – providing a lively give-and-take forum for issues and hot topics shaping today’s RV industry.
Sherman Goldenberg, publisher of RVBusiness, noted that the aftereffects of the “Great Recession” had served as a rallying cry for the industry, and the Elkhart region, to pull together — a theme that’s at the heart of the concept for the Power Breakfast.
“When the bottom dropped out, the world changed forever, and perhaps converged on northern Indiana more than any other area,” Goldenberg said. “The Power Breakfast is the only venue we have in Elkhart where people can sit down, break bread together, and openly discuss issues that we all face. I think that’s the reason it continues to gain traction.”
The event featured an informative and fast-paced agenda, kicking off with an opening program that offered insight into the employment and transport issues that accompany the industry’s rapid growth along with reports from the Recreation Vehicle Industry Association (RVIA) and the Recreation Vehicle Dealers Association (RVDA) on the Go RVing campaign’s success and the overall health of the industry.
Kyle Hannon, president and CEO of Greater Elkhart Chamber of Commerce, opened the proceedings by addressing the strains companies face in finding qualified workers and growing operations as the RV industry motors back to pre-recession levels.
“We have a quandary,” Hannon said. “What should we do next with regard to the number of workers, quality of workers, movement of workers and the movement of companies? If we don’t find answers then we will force expansion of the industry to other areas.”
Hannon said the formation of the “Job Board” and the “500 Families” initiative — designed to bring 500 professionals to the area — were ways that the chamber is actively working to improve the workforce challenges in Elkhart.
Hannon also spoke about Elkhart’s efforts to diversify its business base, noting “When we talk about diversification we are meaning to add to what we have not detract. We are so fortunate to have the RV industry in Elkhart.”
Update on Shipments, Go RVing Successes
RVIA President Richard Coon took a look back to bring perspective to the “banner year” the industry is experiencing in 2014.
“In 2007, the industry shipped 354,000 units,” Coon said. “When the recession hit, we went in the toilet, shipping just 166,000 units in 2009. Coming off a strong year in 2013 with 321,000 units shipped, we are projecting 2014 to reach 340,000 units. But, in terms of how we tracked in the first quarter, we’re starting to think we were a little shortsighted. We could break 360,000 units this year.”
Coon also pointed to the concentration of manufacturing in Elkhart County, which now accounts for 85% of the RVs built for the entire industry. “That means there could be 289,000 RVs manufactured in the Elkhart area this year, compared to just 170,000 in 1999,” Coon noted. He also addressed the trend toward consolidation by manufacturers that has gained momentum in 2014.
“Consolidation is generally a sign of growth, but it also brings with it unintended consequences,” Coon said, echoing Hannon’s concerns about shortages of facilities, lack of workers and a shortage of transport drivers.
Representing a positive offshoot of the industry’s growth, RVIA Vice President of Communications and Marketing James Ashurst reported on the Go RVing campaign’s extended reach across a range of media, particularly electronic outlets.
“In 2013 Go RVing spent $12.3 million,” Ashurst said. “In 2014, the budget is projected to be $14 million. Although our methods are changing, the goals remain the same — drive people to our website, increase consumer engagement and generate leads for dealers.
“It’s working because research shows that we’re up 10% in terms of awareness from 2010 when we launched the ‘Away’ campaign. More importantly, 44% of those folks that are aware of the campaign are likely to purchase an RV.”
While the focus continues to be on TV advertising, which accounted for 47% of GoRVing’s expenditures in 2013, Ashurst acknowledged the rising influence of digital media, especially social media.
“Social media is still somewhat of an unknown,” he said. “You’re not sure what it’s worth to get ‘liked,’ but you know you want more of them. It’s an area that we will continue to pursue.”
Rounding out the morning’s opening session was the teleconference visit with Donnelly (D-Ind.) who worked closely with the RV industry during the downturn.
“We went through some really rough times, but the RV industry continues to provide a great life for a lot of workers in the Elkhart area,” Donnelly said. “We want to make sure we keep the pipeline filled with qualified workers. One of the main areas is education. We want to make sure our high schools and community colleges stay on the right track to create a skilled workforce.”
KOA’s Jim Rogers Addresses Audience
Following a break, Walorski, who represents the Elkhart area, also appeared via teleconference. “As I watched the RV industry take a devastating hit during the recession, I knew the industry and those Hoosier workers would rebound,” she said.
The Republican representative of Indiana’s second district talked about forming an RV Caucus in Washington to represent the industry. “Your industry is powerful, and I’m positive you’ll continue to produce quality products, produce jobs and promote American tourism. Keep up the great work,” she said.
Ushering in a panel discussion in the second portion of the program, KOA chairman and CEO Jim Rogers acknowledged the relationship between the RV industry and the campground hospitality sector.
“Last year we came in and we talked a little about doing ‘Undercover Boss’ and what came out of that,” Rogers said. “Our theme going forward is ‘What’s behind the yellow sign.’ What we learned in that TV show is people did not know what KOA was.
“We still have a huge opportunity to think about what it is that people don’t know about us,” Rogers said, and that applies to the RV industry as well as to KOA. “We only have about 9 million households who are RV owners. We have plenty of room for growth.”
KOA, with 62,000 campsites in its system of about 500 locations across North America, is the largest single player in the campground market.
“We rely on the RV business for our success,” Rogers emphasized. Last summer, short-term RV stays were up 7% at KOA, and long-term RV stays were up 8%. Stays at their park-model “KOA Deluxe Cabins” were up 16.1%.
Of the 25 million households that went camping last year, “over half of them used a tent,” Rogers said. “What a huge opportunity for this industry. We don’t need to get Americans to go camping, we need to get campers to buy RVs,” Rogers said.
Looking out over the hundreds of RV industry leaders, Rogers told them, “You have an incredibly bright future ahead of you. The next five or 10 years look incredible.”
RVIA Chairman Doug Gaeddert, general manager at Forest River Inc., took the stage saying that the breakfast’s growth mirrors that of the RV industry. “Last year was really good, this year’s great and next year will be even better,” Gaeddert said.
He detailed some of the difficulties facing the industry at the moment. “Everyone in the room is facing challenges in addition to the norms,” from difficulties finding qualified workers for open positions to a transport-driver shortage leading to weeks of completed RVs waiting to go to dealers.
“These challenges have been created for the very best of reasons: Business is good,” Gaeddert told the breakfast crowd. With the industry growth in the first quarter being pushed by even stronger growth in the higher-cost motorhome segment, “it might be the industry’s fastest quarter of growth — measured in dollars — ever,” he said.
Gaeddert expects to see consolidation continue in the industry, albeit at a slower pace. “There’s only so many dealers, so many manufacturers, so many suppliers,” he explained. “As the industry continues to grow — and it will — and the opportunities for acquisition become fewer and farther between, the trend will be more toward organic growth,” he said.
On the financing front, Gaeddert said more companies are available to finance in both the wholesale and retail markets than there were in 2009, but he warned that the industry needs to promote healthy use of credit. “Don’t forget how much it hurt when we hit our hands with the hammer last time,” he cautioned.
The morning concluded with a Town Hall Meeting hosted by RVIA. To view the related story click here.