RVing: ?wheel? big business

Big vehicles are selling big these days. ?We had a biggest month of sales ever in March,? says Rich Watson, sales manager for K&C RV in Longmont.

And Watson says K&C?s three stores in Colorado (Longmont, Golden and Colorado Springs) sales hit about $80 million last year.

Why are RV sales growing? The first and most obvious answer that industry observers give is baby boomers. They?re retiring earlier with better health, and their pockets are lined with more disposable income.

?Clearly baby boomers are buying more,? says Bill Swails, chief operating officer for EarthRoamer, a company that makes high-end campers in Broomfield.

Watson agrees but adds that he?s seeing a younger market segment kicking tires on the lots. ?It used to be just the older folks, the early baby boomers, but it?s evolved into younger people, couples with kids,? Watson says. ?They don?t just want to sit around in a hotel. These are more active people who live in the city and want to get out and get away. And Colorado has some gorgeous places to go and see.?

Swails says that since Sept. 11, 2001, he?s seen more people who want to explore more of the United States instead of traveling abroad. ?An RV is a good way to see the country and check things out. And I think it?s just kind of the American way, to get out and explore.?

Swails believes there?s also a little bit of a domino effect going on, too. ?Someone tries out an RV and everything goes OK and so their friends try it, too, and like it.?

Watson says the industry has a wider selection of products to offer consumers, too. ?You can get a nice tent camper that you can pull on the back of an SUV for $6,000. It?s not as expensive as many people might think.?

And he says the used market is strong, too. ?We have about $3 million in used inventory.?
Watson adds that part of reason for more sales is his parent company, FreedomRoads LLC, an RV retailer based in Lincolnshire, Ill. FreedomRoads, which has $250 million in new and used inventory and revenue that exceeded $1 billion in 2004, has 52 locations and is growing.

?The company is going out and buying the best dealerships in the country,? Watson says. ?And it?s so big that it?s able to buy in bulk so we?re able to sell at very competitive prices.?

FreedomRoads bought K&C RV in August 2004. Watson says it was a well-run company then, but it?s better now with the strength of FreedomRoads.

?We?re able to increase inventory with more top lines and lower prices, and we?re more aggressive,? Watson says.

As good as sales are now, they?re still not as good as they were in the 1970s. Swails says the RV industry hit its peak of sales in 1975 ? just before the energy crisis. ?Right after that year, sales saw a dramatic drop with higher gas prices.?

Higher gas prices have clearly made their way onto the scene in the United States. Will they hurt RV sales?

?That?s the big question,? Swails says. ?Anyone who ignores them is crazy. I know for sure that people who buy RVs are price sensitive, so prices could very well have an impact.?

But Watson isn?t as concerned. ?It?s not nearly as expensive as most people think,? he says. ?Sure, they get seven miles to the gallon, but you drive up to Estes Park and you park it for a week, you?re not actually driving that long.?

Swails says his company is in a good position to weather a high-price problem. ?Our vehicles have diesel engines, and we?re accommodating bio-diesel fuel, too.?

According to a study by the Recreation Vehicle Industry Association released in April, RV owners plan to use their vehicles more this summer than last year, despite higher fuel prices. The finding comes from a survey of 444 RV owners, taken as gasoline prices were climbing rapidly in March.

Almost seven out of 10 RV owners surveyed plan to use their RVs more this summer than they did a year ago. Twenty-seven percent are planning to use their RVs the same amount as last year. Only about 4 percent of RV owners plan to use their RVs less this season.

These findings indicate that as in 2004, when RV shipments rose 15 percent despite record-high fuel prices, the price of gas will have little impact on RV use this spring and summer.

?RVers are as enthusiastic as ever about traveling this season,? says Robert Hitlin, president of Reston, Va.-based Robert Hitlin Research Associates Inc., who conducted the study for the RV association. ?Over the last several years it appears that spikes in fuel prices have had a minimal impact on RV travel plans. RVers are desensitized to these fuel price spikes because we have had several of them in the past few years.?

Watson says he?s bullish on RV?s future. ?The future is great, very strong mostly because of the sheer numbers of baby boomers and younger buyers who are entering the market for RVs,? he says. ?Plus, the economy is picking up. I feel very good about how things are looking.?

The RV association also reports that changes in the frequency and duration of vacations favor the RV industry, and that Americans are traveling shorter distances, on weekends and with less planning.

Primary RV demand remains very good, and the potential for future sales is bright, according to a University of Michigan study. Among all U.S. households, one in six intends to purchase an RV in the future.
Both parents and empty-nesters are strong potential buyers of RVs, and promising future prospects are emerging among younger, ethnically diverse consumers, reveals a Harris Interactive study commissioned by the Go RVing Coalition. The study also found that Generation Xers exhibit interests in outdoor activities that are highly compatible with RVing.

Demographic trends favor substantial RV market growth, according to the University of Michigan. As baby boomers enter their prime RV buying years, the number of RV-owning households is projected to rise to nearly 8 million in 2010 ? a gain of 15 percent between 2001 and 2010, outpacing the overall U.S. household growth of 10 percent.

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