An RV may be more of a necessity, particularly as far as Baby Boomers are concerned, than what many people believe, according to two sources quoted in a recent Wall Street Journal (WSJ) article.
Alan Lidstone, co-author of “RVs — Getting Out and Staying Out,” said he does not believe fear of air travel since 9/11 is the reason for the rebound in RV sales this year. He believes fear of flying is a “smoke screen” for people who would have bought an RV anyway but who needed an excuse.
Basically, Boomers feel vacations away from everyday job pressures are a necessity, and many of them are choosing the RV lifestyle because of the flexibility and control it provides, according to the WSJ. It also quoted a 36-year-old building contractor who bought a $100,000 Holiday Rambler (a Monaco Coach Corp. brand) last fall because he wants to control his own destiny and because it is “bigger than many New York apartments.”
Buying an RV is “not as discretionary as you many think,” added Suzy Hultquist, analyst at Liberty Acorn Fund, a Chicago-based asset management firm. Many Baby Boomers with large savings are buying RVs instead of second homes, both of which are tax deductible.
Liberty Acorn owns one million shares of Monaco stock, the WSJ added.
Perhaps the most bullish analyst quoted the the article by the WSJ is Scott Stember of Sidoti & Co., who has buy ratings on Monaco, Thor Industries Inc. and Winnebago Industries Inc. Stember believes the current upward trend in RV sales will continue for about another 18 months and he believes Baby Boomers will fuel the RV industry’s growth for another 15 to 20 years.
However, analyst Michael Crawford with B. Riley & Co. sounded a cautionary note. He said the decision by several manufacturers to increase their production capacity could lead to a glutted market and eventually exert downward pressure on prices.