The recreational vehicle industry’s long road to recovery stops in Atlantic City, N.J., for a major show this weekend at the Atlantic City Convention Center, following a devastating recession that hit the housing market, the automobile business and the industry that’s a little bit of both.
Vacations on wheels, RVs’ roots are anchored throughout southern New Jersey’s tourism industry, the Press of Atlantic City reported.
Some companies, such as Driftwood RV in Cape May and Atlantic counties, reported strong sales in 2010 after a slump last year and say they fared relatively well in the recession.
Others, such as Bridgeton Travel Trailer on Route 49 in Cumberland County, could not survive the drop. The business is selling its remaining stock and will close soon, said Donald Olbrich Jr., 24, a sales manager who has worked at the family business since he was a teenager.
“When it first started, we didn’t think it would last that long,” said Olbrich, whose family business once had 14 employees but is now down to him and his mother. “It was just going on longer than we thought, and we just can’t do it anymore.”
The national Recreation Vehicle Industry Association (RVIA) reports the RV industry has seen a comeback in 2010 after about two years of declines as consumers changed spending habits and the credit crunch impaired potential buyers from getting financing.
RV manufacturers have shipped 194,000 units through September, a 59% increase from that time frame last year, according to the RVIA. The year-end increase over 2009 is expected at about 45%. A unit shipped is one way the industry measures growth and declines.
But the drops in the two previous years were significant as the economy soured: 2008 saw a 33% drop in RVs that manufacturers shipped from the year before. In 2009, shipments dropped another 30%, according to the RVIA.
The credit crunch affected people’s abilities to get loans, as well as some dealers themselves getting financing for their floor plans, said Kevin Broom, RVIA spokesman.
The drop was in stark contrast to years from 2002 to 2006 — five consecutive years of growth, Broom said.
The industry started to rebound near the end of 2009, he said.
Nationally, the RV industry is projected to increase next year, shipping 259,600 units in 2011, but the recovery is likely to be slower than in previous downturns amid changes in consumer habits and spending, according to a forecast by industry analyst Richard Curtin of the University of Michigan.
“There’s definitely a rebound at this point as it relates to the industry,” said Harry Lutz, show manager for the annual Atlantic City Fall RV Show this weekend. “The banks are starting to be more proactive in lending.”
RVs have a strong base in southern New Jersey, the site of most of the state’s campgrounds that cater to weeklong summer tourists and seasonal visitors.
Earle Humphries, 70, owns Atlantic Cape RV in Galloway Township. Humphries hopes to see a resurgence in RV sales for his business in 2011.
“It’s getting a little easier now, but it’s just been very hard to get the people to say yes because they’re so afraid they’re going to lose their job and there’s a lot of people getting out of the RV lifestyle for a while until things turn around,” Humphries said.
The desire for people to buy recreational vehicles for the open road or for seasonal campgrounds did not go away during the recession, according to local dealers.
At Driftwood RV, sales have been strong recently, said John Worthington, director of marketing.
The company, which has locations in Dennis Township and Egg Harbor Township as well as two campgrounds in Cape May County, specializes in park model trailers that are placed at seasonal campgrounds.
Worthington said Driftwood fared better than some other RV dealers in the down economy but felt the impacts too.
“We’re having a great year now and hopefully we’ll have a great finish,” Worthington said. “Sometimes people need to put off their dreams a little, but they always have them. It’s the dream of family time and vacation. People put them off, but they’re always close to the surface.”
Meanwhile, consumers have been leaning more toward travel trailers — those RVs that are towed behind pickup trucks and SUVs, Broom said.
What had represented about 80% of the market half a decade ago now represents more than 90% of the market, Broom said. The travel trailers generally cost less, are easier to get financing for and are available to a mass market already owning SUVs and pickup trucks, Broom said.
Smaller, lighter and more environmentally friendly and energy efficient RVs — including those with solar panels — have also been popular, dealers said.
The show is sponsored by Affinity Events. Affinity Group Inc. (AGI) is the parent company of Affinity Events and RVBUSINESS.com.