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RV rental firm Cruise America Inc. expects its sales revenue this year to be up 25% over last year, which would approach its most recent peak years experienced during the late 1990s, the Arizona Republic reports.
A confluence of factors has “played into the whole RV industry’s hands,” said Randall Smalley, chairman and CEO of the Mesa, Ariz.-based firm, the country’s largest RV rental company.
Cruise America experiences both sides of the business, rental and sales, according to the Phoenix, Ariz.-based newspaper. It cycles new Class C motorhomes into its rental lineup, selling used rigs after about three summer seasons and 70,000 miles.
Cruise America’s average motorhome sale is about $25,000. An average rental tab comes to about $1,000 for seven days for domestic travelers. About 60% of Cruise America’s annual revenue of around $100 million comes from rentals, 40% from sales.
“I think it’s (the RV industry) in its renaissance period,” said Robert Smalley Jr., Cruise America’s president and Randall’s brother.
The privately owned company was started in 1972 by the Smalleys’ father, Robert.
Part of this year’s sales growth will come from the return of European travelers, a valuable segment of long-term renters that had slumped the past couple of years. Europeans rent for an average of 19 days, domestic customers about nine.
“It’s back in balance; we’re doing very well,” said Bob Caldarone, assistant vice president of marketing and development for Cruise America.
The company spent about $50 million on 1,000 new vehicles this year and expects to order a similar quantity next year, keeping its North American fleet at about 4,000.
Cruise America is helping its customers by softening the blow from record-high gas prices. It is offering a rebate of 5 cents per mile driven, which could go to 6 cents next week, based on current average fuel prices, Caldarone said. But price isn’t so much a factor as supply – as long as gas is available, people are continuing to travel, he said.
And then there are people like Sherry and Kevin Klosterman, farmers from Mooreton, N.D., who visit Phoenix each fall for its NASCAR race, renting a trackside motorhome from Cruise America. They don’t care how high gas prices are, because they never drive it.
“We just pull up to the track and the motorhome is sitting right there,” Sherry told the Republic. “It’s more safe and it’s more fun (than a motel). You don’t have to worry about getting back to your motel.”
They buy a package with friends that includes the rental, race tickets and pit access that works out to about $600 per person for five days. They watch the races from the RV roof or grandstands. It’s heaven on wheels for race fans.
Meanwhile, Phoenix area musician Inda Eaton was scheduled to buy a 2004 barely used 31-foot motorhome from Cruise America on Tuesday (May 25) for $59,000. She and her band will travel in the RV this summer while on tour.
The “Americana rock” group plans to use the RV as transit, a backstage facility and sleeping quarters, Eaton said.
“I’m probably not the demographic that’s going to go out and go RVing,” she said, calling the unit a “business tool” but one that should be fun, too.