Recreational vehicles are a staple of the travel and tourism industry, but the industry is experiencing market changes that, in turn, impact the industry’s manufacturing and financial outlook. Specifically, growth is slowing in some demographics while increasing in others. Additionally, a general transformation is underway in terms of destinations. Specifically, state parks are under pressure by companies wanting to privatize services. All these trends are contributing to a fluctuating industry that will impact retailers and tourist destinations while contributing to rising and lowering economies on the local and state levels.
Trends That Will Transform The RV Industry
1. Decreasing fulfillment
After years of industry growth and fluctuating profits, the RV industry is experiencing a steady decrease in wholesale fulfillment, indicating a significant drop in retail sales. This decrease is partly attributed to the so-called millennials. Millennials are young adults ranging in age from 23 to 38, having been born between 1981 and 1996. This market tends to spend less on a vast array of things due to what is perceived as a decreased emphasis on owning material goods. That said, this market tends to emphasize experience over ownership, so RV retailers have a significant opportunity if they can reach this market as owning an RV is the symbol of the active, recreational experience, allowing people to experience life, cultures, and places across the globe.
2. Permanent living
Tiny homes have become a staple of people wanting to live more efficiently on less while being able to also enjoy the freedoms of mobility. This trend has led to the design of the RV as something of a permanent living solution. For instance, instead of the aerodynamic detailing of more modern RVs, a boxed style of a minuscule ranch provides the appearance of a mobile home–with the emphasis on home. Many people understand that they can travel, but they yearn for something that connotes stability, and the design resembling something with architectural permanence provides that emotional need.
3. Chrome cooking
As with traditional homes, the kitchen is the most important room in the house. From conventional ranges to full-size refrigerators, people want convenience, luxury, and something capable of scaling to fluctuating needs.
The aforementioned trend of dipping wholesale RV shipments to RV retailers can, in part, be attributed to the growing propensity for people to share RVs. Traditionally, an RV capable of sleeping six to eight people housed two to four. Owners were generally older people or retirees. Although this additional sleeping capacity was marketed as a value-added feature, owners rarely ever capitalized on it. Modern RV buyers, however, are doing just that. They are inviting friends and family to camp with them, and the ability for an RV to sleep multiple people will eventually translate into a perceived lack of need. After all, after camping with friends and family for years, RVing by yourself can feel lonely.
Additionally, like the Airbnb market and crowd-sourced car rentals, RV rentals are becoming more common to people wanting to vacation on the road without becoming saddled by a 10-year loan or the property taxes that will inevitably come with RV ownership.
5. Broader definition of family
Friends, of course, represent a proxy family, but pets are the primary familial extension that RV and accessory retailers are learning to serve. Emphasizing the pet friendliness of an RV has the potential of attracting a broad subset of vacationers navigating recreational living options, such as hotels and resorts, that by and large do not welcome pets.
6. Global warming
Global warming is wreaking havoc on much of the world, and the RV industry is experiencing similar woes that include a greater need for up-to-date travel information for up to 10 days in advance. For instance, seasonal flash flooding is becoming more prevalent at certain destinations, and RV travelers are specifically at risk.
Additionally, the fluctuations in temperature that accompany global warming make staying warm in the winter and comfortably cool in the summer a challenge. For instance, when temperatures drop to sub-zero levels, it is necessary for travelers to relay on high-quality insulation and heating accessories capable of seeing them through flash-freezes. Additionally, summer heat zones are becoming geographically broader, and the peak temperatures are remaining peaked for longer periods of time. Consequently, air conditioning is becoming a critical feature for all RVs, and the ability to affordably run electricity at parking stations, state parks, and RV camps is a growing concern.
7. Vehicle Size
A change in market and a more economical way to heat and cool living or recreational space has contributed to a desire for smaller recreational vehicles. Smaller recreational vehicles are, of course, cheaper to tend and enjoy, but they also add to an increasingly environmentally aware zeitgeist. This attitude for smaller, more environmentally responsible vehicles leaves more money to be spent on accessories, experiences, and food. Additionally, this trend is partly due to an increased number of people on a fixed income who still want the ability to enjoy luxurious living quarters or vacation sleeping arrangements.
8. Increased competition
The RV industry is experiencing increased competition in the form of tiny homes, which are related, in many ways, to RVs. However, the industry is experiencing intense internal competition between manufacturers intent on capturing what many people describe as a slowing market. For instance, companies, such as Thor Industries and Forest River own a significant number of brands within the RV industry. Dominating companies in the RV industry focus on increased luxury, but in an industry that offers relatively low entrance barriers, this consolidation also represents fixed thinking, which could easily lead to more innovative companies siphoning off much of the market with the right product or product mix.
9. State parks
Although changing political environments threaten state parks and natural resources in favor of development, the RV industry’s primary destinations include state and national parks in the United States, Australia, and China. This is leading to an increased practice of lobbying for privatization of services on traditionally public lands.
For campers, this trend can be seen as a boon as luxury services are often more notably present in private resorts, but there is a concern among environmentalists that resources will be ravaged to the broader detriment of the environment at large. That said, it is common for state parks to partner with basic services, such as those that deal in gifts and concessions. Consequently, this trend is expected to continue as budget decreases can significantly impact a state park’s ability to provide basic services.
10. Off grid
Relating to the aforementioned desire of campers to travel and vacation more affordably while also helping to protect or heal the environment is the trend of campers equipping their RVs with solar panels. These solar panels are used for the purpose of heating, cooling, and powering basic appliances.
Top Five Statistics About The RV Industry
1. The 21st day
The average camper, it is said, travels for 21 days. This period exceeds the average vacation of non campers, and it is said that on that 22nd day, RVers begin planning for their next vacation. Consequently, retail marketers can provide targeted marketing to people just off a recent camping trip as they are still gripped with camping fever, as it were, and are willing to build a shopping list for the next season.
2. Sizable market
Regardless of some people’s pessimistic forecast of the RV industry, the total dollars forecast is set too easily top $16,000,000,000. In fact, forecasts estimate a 20-percent increase to $20,000,000. Those zeroes represent a significant number of RVs and a stable market capable of sustaining ever-mingling attitudes toward travel, the nature of residence, and mobile vacations.
3. Average nightly price
The average nightly price of an RV park ranges between $40 and $45, a price point that is up nearly 300 percent from the not-too-distant average price of $15.
4. Ownership up
Despite the common exclamation that the RV industry is on the decline, actual ownership is currently up 16 percent over 2014 and 2015. This fact indicates that many industry pundits are focusing on the 2017 industry trends, which dipped.
5. To tow or not to tow
For retailers and people who earn their living by catering to the needs of RV enthusiasts, the towable market is the one that deserves the focus. For instance, in terms of total units, towable RVs represent the bulk of the RV market. In fact, towable units for 2020 are expected to outshine non-towable recreational vehicles by a whopping 712 percent.
Thanks for reading "Trends That Will Transform The RV Industry Outlook in 2020", by the Linchpin Team in Chicago, Raleigh, and Wake Forest.