The Wall Street Journal recently published a feature about the state of the RV industry that was interesting, and very much worth reading, but somewhat flawed in its perspective.
RV Sales Revive, but Without Frills (WSJ, Dec. 23, 2015)
The article’s first sentence declares that “Americans are buying recreational vehicles at the fastest rate in more than a decade.” Then the author, James R. Hagerty, quickly pivots and writes that “Unfortunately for RV makers, many are hitting the road in smaller, less expensive models.” I find his use of the word “unfortunately” to be unfortunate.
For which RV makers is this unfortunate? After all, not every RV maker is building large, expensive, class A diesel pushers. Trust me on this, there are plenty of manufacturers who are mighty happy that Americans are buying “smaller, less expensive models.” One of the hottest companies in the industry right now is called Little Guy Worldwide. Hagerty is also only totally right about the “less expensive” part. If you’ve been to a campground lately you’ve probably seen plenty of towables over 30 feet–and yes–most of them are inexpensive when compared to motorhomes–but not much smaller.
Hagerty’s feature consistantly implies that the RV Industry’s breathtaking comeback is deeply flawed because its customers want light and cheap. I concede that the comeback has not been as great for those companies who focus on luxury and luxury only, but for the rest of the industry, life is good. They are not reluctantly making lighter and cheaper rigs, they are building them with complete intentionality. This is the comeback that they planned, not the flawed comeback that the Wall Street Journal sees.
During the recession the major RV manufacturers intentionally sought to build smaller and lighter units that could be towed by the family SUV or minivan. And guess what? Those units are selling like hotcakes. When the general public thinks about RV’s they often think about blinged out motorhomes. But 90 percent of RV’s sold are towable units, many of which cost less than $20,000.
So why else are Americans gravitating towards smaller and cheaper rigs? Because an increasing number of younger people are buying RV’s, and they are buying what they can afford–not what the Wall Street Journal wants them to be able to afford. Many younger buyers (think millennials) also want to keep things simple and keep their footprints smaller. More power to them.
I am POSITIVE that the RV industry is thrilled about the decreasing age of RV ownership. In fact, they are doing the happy dance. Have you seen a Go RVing commercial on television or social media? These ads are very deliberately courting younger buyers–and the RV industry knows that they are going to purchase smaller rigs. However, the article implies that many older buyers are also making the decision to go smaller and lighter. If this is the case, then most of the industry is certainly making up those lost margins with increased volume. The RV manufacturers are playing the long game–and they are winning.
But it seems to me like everyone is winning right now. Consumers have a wide variety of models to choose from and they are competitively priced. Manufacturers have more customers than they have had in a decade, and those customers are younger, and will probably make more total RV purchases in their lives than previous generations.
But who is the biggest winner in this new golden age of RVing? It might just be the campground industry. All of those shiny new RV’s are going to be heading to America’s campgrounds in record numbers next summer. Best make your reservations now.
What are your thoughts about this Wall Street Journal article on the RV Industry? I would love to hear from you in the comments section below.