Back in the dark days of the pandemic, your travel options were limited.
The covid-19 shutdown devastated the travel industry, with airlines, cruise ship operators and hotel chains all suffering as people stayed home.
But there was a glimmer of hope in all the dark despair: recreational vehicles.
With an RV, you didn’t have to worry about sharing space with strangers, since you were essentially putting your house on wheels and hitting the road.
The RV Industry Association tweeted a video in May 2020 depicting all manner of happy campers enjoying their RVs.
“As America begins to reopen,” the video voice over tells us, “the desire to get outdoors has never been greater. And there’s no better way to recreate responsibly and control your travel experience than in an RV. It’s easy to become an RVer and there’s one for everyone.”
Well, it sure seemed that way.
Sales skyrocketed as many people who had never thought about buying an RV had an abrupt change of heart. Companies like Camping World Holdings (CWH) – Get Free Report and Winnebago Industries (WGO) – Get Free Report saw their stock take off amid all the sudden RV love.
But things changed as the world got a better handle on covid, other forms of travel were once more available, and U.S. interest rates began to rise.
Results from the RV Industry Association’s June 2023 survey found that RV shipments ended the month with around 24-thousand units, a decrease of more than 46% from a year ago. Shipments are down nearly 50% year-to-date.
“Our latest RV shipment forecast shows that shipments should begin to recover later this year and into 2024 as consumer confidence increases and the ongoing interest in camping and RVing turns into increased RV sales,” RV Industry Association president and CEO Craig Kirby said in a statement.
Sales on Downward Path
RV sales in 2023 are on track to hit their lowest level since 2015, Reuters reported. Beyond lowered demand, a sharp rise in interest rates has also made RVs much less affordable in recent months.
North American shipments of new motorhomes and trailers, almost all of which are produced in the United States, are expected to plummet to 300,000 this year, about half the number shipped in 2021, according to the RV Industry Association.
The only other time shipments have fallen so sharply was during the 2007-2009 financial crisis and recession.
Many dealers have unsold RVs on their lots and now face the prospect of bringing onto their lots the newest 2024 models which cost less than the aging models.
Nevertheless, the people at Winnebago seem confident. During last month’s third-quarter earnings call, Chief Financial Officer Bryan L. Hughes told analysts that “despite recent headwinds in the industry and, as context, gross profit margin remains above pre-pandemic third quarter 2019 levels.”
“We remain confident that the favorable exposure to the RV lifestyle that many people experienced during the pandemic environment, combined with the ability to work remotely due to virtual capabilities, will provide long-term secular tailwinds and propel Winnebago Industries growth in the coming years,” he said, according to a transcript of the call.