Gasoline at $4 a gallon one summer, followed by a credit crunch the next, amounted to the worst of both worlds for the RV industry.
After watching nationwide shipments of recreational vehicles drop nearly 33% in 2008 and a little more than 30% in 2009, an industry considered an early indicator of the overall economy has rebounded this year.
Sales have are up about 50% at Coleman’s Country Campers in Springfield, Ill., said co-owner Mike Miles, though he added that the increase is testimony to just how tough it was the last two years, the Springfield State Journal-Register reported.
“Nice campers that are reasonably priced are still selling, but in this economy people are a little more educated and a little thriftier,” said Miles.
Buyers also have become more selective in the middle price range, and “no money down” sales are a thing of the past, he said. Buyers are putting at least 10% down, or even paying cash.
“A couple of years ago, you could have walked in here and purchased a $30,000 or $40,000 RV with no money out of pocket. The bank would have financed the whole thing. But those days are gone,” said Miles.
Jim Anderson just plunked down $225,000 for a Winnebago motorhome — including satellite TV complete with hi-def widescreen panels, “basement” central air, double-pane windows, a bathroom, sleeping area, microwave, oven, combination washer-dryer, refrigerator, the works. One of the TV screens can be viewed from outside.
It’s his third motorhome purchase in a matter of years.
“This is it. The stuff that I wanted is in it,” said Anderson, who agreed that financing is harder than in the past.
Anderson, 64, spends his summers at the Double J Campground on Interstate 55 southeast of Chatham and his winters at a campground in California. He’s what is known as a “full-timer” in the travel industry.
Campgrounds in both states have remained full, despite the economy, Anderson said.
“You’re talking about people with disposable income. They’ve already bought RVs and they want to use them,” said Anderson, who worked for the state of Illinois in Springfield after more than 22 years in the Navy. He retired from the state in 2005.
Campground owners Jerry and Jeri Francis said that, while the economy has hurt RV sales, demand for campsites remains strong.
“We have been totally booked for three or four weeks (for the Fourth of July),” said Jeri Francis, who added that the number of Route 66 travelers has picked up in the Springfield area. The campground is on part of the old route between Chatham and Glenarm.
“We have a lot of foreign visitors who will pick up a rental in Chicago and travel Route 66,” said Jeri Francis.
The couple has gradually cut back its inventory of RVs to one model on the lot, though Jeri Francis said they might rebuild their sales business at some point. A propane sales and service center operates year-round.
“We sold a lot of our inventory. We had two or three contracts (on the remaining model), but bankers have just not been that eager to finance ‘toys,’” said Jerry Francis.
RV business indicators
An annual forecast from the Recreation Vehicle Industry Association (RVIA) is another indication of just how hard the industry was hit in 2008 and 2009. Nationwide wholesale shipments through April are up more than 93% compared to last year and, at the current pace, should be up nearly 40% for the year.
If the economy cooperates.
“Economic hazards could slow the pace of the recovery, including poor job and income growth, lingering credit constraints and low consumer confidence,” said a University of Michigan forecast for the RVIA.
But the forecast finds some long-term bright spots, including a wave of RV-prone Baby Boomers hitting retirement years, the fact that RV buyers tend to be more credit-worthy and have more disposable income than most consumers, more fuel-efficient motorhomes and a trend toward shorter trips.
“It’s one of the reasons we’re a leading indicator. RV purchases are discretionary and depend on credit availability,” said national association spokesman Kevin Broom.
Broom said spring and early summer are the prime buying seasons for recreational vehicles. Sales are expected to slow to a more sustainable level the rest of the year. May sales already were down slightly from April.
“It’s still a good total. We know we’re not going to keep doing 91% better every month,” said Broom.
Gas prices help
“In 2008, we got a lot of cancellations because of the gas prices. We haven’t heard that too much this year,” said Linda Roller, co-owner with her husband, Stan, of the Springfield KOA campground.
Roller said business is ahead of last year, but the uncertain economy remains a factor in cancellations.
“It’s usually somebody who has lost a job or just can’t afford to travel this year,” said Roller.
A pre-Fourth of July survey by AAA Chicago found relatively stable gasoline prices are a key factor in a 17.1% increase in holiday travel projected this year compared to 2009. But the same survey showed the average trip length, 617 miles, is unchanged and travelers also expect to spend less than the last Fourth of July.
Still, any improvement is good after the last couple of years, said Roller.
“We’re a little ahead of last year. Not tremendously, but we’re ahead. It’s positive,” said Roller.