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  • In the years that followed the financial crisis, sales of RVs

  • began booming.

  • Once considered a pretty dowdy way to travel.

  • RVs have benefited from slick industry ad campaigns, relatively

  • low gas prices, and a renewed interest among Americans of all

  • ages including retiring boomers and younger RVers lured by a

  • chance to live the so-called van life.

  • Sales began to drop in 2018, but the latest boon to the business

  • might be the coronavirus pandemic.

  • So it's a common thing that we've been hearing from our dealers,

  • from customers, friends of mine, the same way that maybe never

  • considered the lifestyle, but they needed a place to get from

  • point A to point B and an RV truly is the safest way to do it.

  • We've been wanting to buy a camper for a while now, and we knew

  • that if we got a camper or the sooner we got a camper the more

  • we would go camping, just in general.

  • And so this gave us the nudge to do that.

  • RV companies such as Winnebago and Thor Industries have seen

  • revenues soar over the last decade.

  • RV sales grew from 2010 to 2017 in most years by double digits

  • annually. The new boost from the pandemic could fuel growth for

  • months if not years to come.

  • But it also risks straining the industry's capabilities.

  • Some longtime RVers and industry watchers say the RV industry's

  • rapid growth has come with its share of pains.

  • Some say they are seeing reports of quality issues with RVs

  • bought in the last several years.

  • They attribute it to the boom in production and intense price

  • competition among manufacturers looking to lure new customers.

  • Surging demand has strained the supply chain and production

  • capacity of the RV industry's heartland.

  • Elkhart, Indiana, where the vast majority of RVs are made.

  • Data indicate first time buyers are pouring into dealerships and

  • shows looking for their own happy home on the road.

  • This is a promising sign for a business built around a lifestyle

  • even RVers admit was once seen as deeply uncool.

  • But long timers say new customers need to do their research

  • before signing and understand what the RV life is really about.

  • It can be wonderful, but people need to do their homework first

  • just to make sure it's a dream come true rather than a

  • nightmare.

  • A recreational vehicle, broadly speaking, is one that has spaces

  • and features that enable people to essentially live in it

  • comfortably, at least for a time.

  • There are many types that fall under this banner.

  • The two main categories are towables and motorhomes, which each

  • break down further into different subcategories, such as camper

  • vans, fifth wheels and so on.

  • Vehicles in these different segments range in size, the

  • amenities they offer, and in their sticker prices, which can run

  • from thousands of dollars to more than a million.

  • Towables which are hitched to the back of cars or trucks, make

  • up 90% of the market, according to the RV Industry Association.

  • Motorized versions make up the other 10%.

  • Towables allow consumers to get in at a lower price point because

  • you're not paying for the engine in the automotive portion.

  • So as long as you've got a vehicle that can tow it, it allows

  • people to get in and a little more affordably way.

  • As the industry has grown, RVs have become larger and more

  • sophisticated with features that ever more closely resemble

  • those found in an ordinary home.

  • The RV industry is as old as the automotive industry itself.

  • Historians place its birth in the year 1910, just about seven

  • years after the Ford Motor Company was established.

  • 1910 was the year the first motorized campers were made.

  • Up to that point, people who wanted to sleep comfortably on

  • wheels had to resort to outfitted railway cars.

  • Most of these early designs were pretty simple, and they were

  • devoid of many of the conveniences found in contemporary RVs,

  • such as fully functional kitchens and bathrooms.

  • Yet these new campers found a market among Americans eager for a

  • new tool to help with comfortable travel.

  • A culture of tin can tourists began to sprout in America in the

  • 1920s. By the 1930s, RVs included beds, dining tables, water

  • and electricity. Progress continued into the 1950s and 1960s,

  • around the time many of the current RV manufacturers were

  • founded. RVs became an established American cultural phenomenon

  • by the latter 20th century.

  • Despite this, they were for a long time considered, well, not

  • really hip. People thought that RVing was young people thought

  • it was very corny and just for retired people.

  • And of course, that's change now in the last few years.

  • As the U.S. economy recovered from the recession, spurred by the

  • financial crisis of 2008, the RV industry saw several years of

  • impressive growth. Sales of the iconic brand Winnebago grew from

  • $449.5 million in 2010 to around $2

  • billion in 2019.

  • Sales of market leader Thor Industries, which owns the also

  • iconic Airstream brand, grew from $2.3 billion in 2010 to

  • around $8 billion dollars in 2018 and 2019.

  • Part of what fueled this is a dramatic spike in interest among

  • members of very different generations, say industry analysts.

  • So-called baby boomers are retiring and looking to spend more

  • time traveling. These customers fit industry analyst Chuck

  • Woodbury characterization of road going grandparents eager to

  • enjoy their golden years.

  • But there has also been a sharp rise in younger buyers, fueled

  • by what some call the van life trend.

  • Van life is often rendered with a hashtag signifying the role

  • social media has played in the movement.

  • A fair number of younger buyers see an RVs and converted vans

  • the promise of a life of greater freedom and simpler living.

  • Others are just looking to get away from home for a bit.

  • There really is a large resurgence in wanting to get back out in

  • nature. Everybody realizes it's good for the soul as well as for

  • the physical body, and the RVs allow you to get there, set up a

  • base camp, do what you enjoy doing, hang out with friends, hang

  • out with other families, and get that break away before you

  • return to those very active lifestyles that pretty much all of

  • us have today. We love the camping lifestyle.

  • We both grew up camping.

  • We love-there's so many, like family values that go behind

  • camping between, you know, teamwork and organizational skills,

  • and enjoying the great outdoors.

  • And so we really wanted to still have that element of camping

  • and instill those values in our kids.

  • There is an important point to make here.

  • Many of the people living the so-called van life do not buy

  • ready made RVs.

  • Instead, they often buy conventional transit or cargo vans.

  • The Mercedes Sprinter and Ford Transit lines are popular

  • choices. These vans are then converted either by the owners

  • themselves or by shops that specialize in van conversions.

  • This is often a lot cheaper than buying a ready made camper van.

  • Like conventional RVs these can range from these simple and

  • spartan to the luxurious.

  • Perhaps the most famous camper van of all time is the Volkswagen

  • bus, formerly known as the Type Two which became a symbol of the

  • counterculture and at home on the road for a generation of

  • hippies. The camper version of the Type Two was called the

  • Westfalia, named for the company that converted the van for

  • camping. Volkswagen has been making camper vans since the

  • original VW bus era.

  • Among others, there was the Vanagon, the Eurovan, and the

  • California camper, which, despite the name, is not sold in

  • California or anywhere else in the United States.

  • VW has said it plans to revive the original VW bus concept as a

  • futuristic, fully electric van in 2022.

  • The major RV manufacturers also make their own camper vans,

  • often built off platforms such as the Mercedes Sprinter.

  • And the RV Industry Association says the average age of RV owners

  • has been dropping from the age of 48 in 2015 to 45 in 2017.

  • We see a lot of people that do the van life for a number of years

  • and then move into a little more traditional RV, even if it is

  • just the van camper or small, motorized or even a towable

  • product. That means the industry is connecting with younger

  • consumers and suggests more good years are ahead if those

  • customers keep coming back.

  • Many of these younger are RVers have jobs that allow them to work

  • remotely, widespread internet connectivity helps.

  • About 1 million to 1.5 million live in their RVs full time.

  • According to the RV Industry Association.

  • RVs have become so popular in fact that some people say RV parks

  • and campgrounds have become pretty crowded.

  • Stories abound of travelers struggling to find space to park

  • their vehicles. RV parks are not growing very fast and very

  • expensive. $20 to $25 thousand a space is where it costs

  • somebody to build an RV park when you figure all the hookups and

  • everything that goes into it.

  • So they're very expensive. It takes a long time to get that

  • money back. So there's not that many RV parks.

  • And yet you've got all these people that want to stay in them.

  • And then you've got the full timers that are staying in and

  • you've got the traveling nurses, the pipeline workers, all these

  • people. So where are these people going to stay?

  • Those in the industry say the explosive growth of RV sales has

  • exposed some other troubling phenomena.

  • The fact is RVs.

  • What you don't see, what you don't see beneath the surface, the

  • staples and the glue that's holding them together on the cheap

  • ones and the short cuts that people take.

  • Industry watchers such as Chuck Woodbury say they have heard

  • tales of RVs cheaply and hastily made.

  • I went out on a press trip once with a they gave us these bottom

  • line, RVs to use.

  • And I'm telling you, the bed was it was like a normal bed at

  • home but without the mattress, just the box springs.

  • I mean, it was awful. Critics attribute the troubles to the

  • dramatic spike in demand, and intense price competition among

  • the few manufacturers in the business.

  • Today's RV industry is heavily consolidated, a trend that

  • intensified during the financial crisis, when many smaller

  • makers were either gobbled up by larger competitors or simply

  • went out of business. Now, three makers control the vast

  • majority of market share, Winnebago Thor Industries, and Forest

  • River, which is owned by Warren Buffett's Berkshire Hathaway

  • holding company. Thor Industries has about 48% of the market

  • alone, according to Jefferies analyst Bret Jordan.

  • Forest River has about 33% and Winnebago about 8%, with the

  • remaining 11% made up by smaller players.

  • 83% of RVs are made in Indiana, mostly in Elkhart County, the

  • heart of the industry.

  • So the soaring demand has left what was once a small, very

  • regional industry, struggling at times to ramp up production

  • and to service vehicles in need of repairs.

  • RVs have also become a lot more complex.

  • It seems obvious to say it, but it is worth remembering that RVs

  • are more like houses than they are like cars.

  • They have bathrooms, sinks, refrigerators, complex lighting

  • systems and unique construction.

  • That means servicing one of these things requires a pretty wide

  • skillset, including a familiarity with automotive maintenance,

  • electricity, plumbing, and other things.

  • In 2018, the RV Industry Association invested $10 million in the

  • creation of the RV Technical Institute in Elkhart, Indiana.

  • The institute launched in the fall of 2019.

  • The goal is to create more trained technicians, help current

  • practitioners strengthen their skills, and reduce service wait

  • times for customers.

  • With respect to quality issues, the RVIA said it maintains teams

  • of employees that regularly make unannounced safety inspection

  • visits to RVI member factories, which comprise 98% of RV

  • manufacturers in the country.

  • A recent survey of owners by the RVIA showed that less than one

  • percent of them plan to stop RVing.

  • Thor industries in Winnebago were not available to comment on

  • this story.

  • In 2018 and 2019, RV shipments had shown signs of decline after

  • years of growth. But the onset of the global pandemic has

  • boosted consumer interest.

  • According to those in the industry, campgrounds and RV parks

  • have seen jumps in reservations.

  • On June 10th, KeyBank analyst Brett Andress said in a note that

  • RV demand has stabilized and has shown signs of accelerating.

  • The firm raised estimates and price targets across the board for

  • manufacturers and the RV seller Camping World.

  • Andress said he believed Covid-19 had the potential to create a

  • longer tail this time given incremental hesitation toward

  • traditional leisure avenues such as hotels, cruises, and

  • sporting events. Evidence for this can be found in the airline

  • travel disruptions seen after the attacks on the World Trade

  • Center in September 11th, 2001, which led to a significant 15

  • month tailwind for the RV industry.

  • However, he did also say there are concerns the industry might

  • not have enough inventory to meet demand.

  • Jefferies analyst Bret Jordan said in a note on May 5th that

  • production shutdowns due to the pandemic did have a significant

  • effect on demand in April.

  • And it was looking bleak as to what's going to go on.

  • And as time continued, we started to see the trends.

  • Consumers, you know, who had been confined to an apartment or to

  • a home in one place, were itching to get back out and do things

  • yet remain socially distant.

  • And an RV allows you to have some of that freedom of flexibility

  • and control. In a note on June 12th, however, Jordan said that

  • many of Thor's dealers reported a significant sales boost from

  • April to May and were