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Spending leisure time in a diesel pusher – that’s how the Chicago Tribune recently described the RV life – Baby Boomer style.
Members of the Woodstock generation, who once thumbed their noses at all things conventional, appear to be embracing these fuel-guzzling icons of Americana, the Tribune reported.
“For a generation that started out in sort of a rebellious mode, with the mantra, ‘Don’t trust anyone after 30,’ they have really become the premier consumers,” said Anne Brouwer, senior partner at retail consultants McMillan/Doolittle LLP. “And this seems entirely in character, because travel and adventure are part of what Boomers crave, and it may not be convenient anymore to travel on the Harley.”
Despite gas prices averaging more than $2 a gallon nationally, Dr. Richard Curtin of the University of Michigan predicts, 347,800 motorhomes and towable RVs will be shipped from factories to dealerships this year, the best year since the all-time record of 389,900 units delivered during 1978, according to the Recreation Vehicle Industry Association (RVIA).
Demographics is a major reason for the upbeat forecast.
“Some 350,000 people turn 50 each month in the United States, providing an enormous and growing pool of potential buyers for at least the next decade,” Craig Kennison, senior research analyst with Robert W. Baird & Co., stated in a recent industry report.
Adding to the pool of potential buyers are those who no longer want to fly since the Sept. 11 attacks, said Tom Walworth, president of Statistical Surveys Inc., the independent market research firm that tracks RV retail sales.
“Some people don’t like to be touched, patted or set aside.”
Of course, the $12 billion in annual sales the RV industry enjoys has some vulnerability, mostly tied to the economy and consumer confidence levels.
After hitting a high-water mark in 1978, for instance, the industry tanked because of high inflation and fuel prices.
The industry gained ground through the 1990s but saw sales fall off immediately after Sept. 11, 2001. Business picked up and optimism rose in the fall of 2002, leading dealers to build up inventory for the spring of 2003, only to have the war in Iraq stall sales.
“The industry went into damage control,” said Guy Nielsen, an analyst with Nutmeg Securities. One effect was heavy discounting to move inventory in the first half of last year.
Momentum started to build in the fall of 2003, and business has been good so far this year, leading to record sales for manufacturers such as Thor Industries Inc. and Monaco Coach Corp.
Clouds hover on the horizon – rising interest rates and gasoline prices – but observers say the threats remain distant.
“Interest rates will become a factor, but they are so low now they will have to go up a couple hundred basis points until they are a factor,” Nielsen said. “And the most important thing about fuel is that it’s available,” he said, unlike in 1973-74, when there were shortages.
If prices keep rising, it could shave demand, he said, but so far the impact appears minimal.
Shifts in the industry have contributed to the current momentum.
Younger RV purchasers “have branched out further than camping,” Curtin said. “There are all sorts of outdoor sporting events, from antiquing to motorcycle racing to horse shows.”
Product lines have expanded to adapt to the changing appetites of the RV buyer, with prices ranging from $5,000 to $10,000 for the most modest towable units, to $1 million or more for the ultraposh motorcoaches.
“One thing that’s so different … is how much is for the upscale market,” said Monaco Coach CEO Kay Toolson. “It’s no longer Joe Six-pack with a camper, out roughing it.”
A 40- to 42-foot Fleetwood American Eagle motorhome, for example, can have amenities such as tile floors, tongue-and-groove woodwork, slideout walls to enlarge living quarters, dual surround sound, Corian countertops and three TVs, said sales staffers at Crystal Valley RV, a Freedom Roads LLC dealership in Island Lake, Ill. The dealership sells these models, which list for $410,000 to $470,000.
Firms such as Monaco have developed luxury resorts catering to motorcoach owners. Monaco’s Outdoor Resorts Indio, near Palm Springs, Calif., has an 18-hole golf course, health spa, four swimming pools, four lighted tennis courts and a juice bar.
Jim and Teri Owens, a Des Plaines, Ill., couple who camp with their two daughters in a modest towable RV they bought used for $8,000, have seen such high-end parks in Florida.
“You’d feel like an outcast, like the Beverly Hillbillies, if you pulled in with something less than a $200,000 motorcoach,” joked Jim Owens, 38, a commodities trader.
Another shift has been toward sales of diesel-powered motorhomes, which have greater power and speed than gasoline-powered RVs.
“If you’re on a 75 mph. road and you put it on cruise control, you’ll keep up with everybody,” said John Swardson, co-owner of Camp-Land, a dealership in Burns Harbor, Ind.
The gains may also have something to do with the industry spending heavily to market to Baby Boomers.
Phase III of the Go RVing Coalition’s national ad campaign was launched in 2003, using the voice of actor Tom Selleck, and it will run through 2005. From 1997 to 2002, $60 million was spent on the campaign.
“The thing that really got me was a commercial the RV association ran three or four years ago, showing someone pulling up to a fork in the road,” motorhome owner Jim Card, a 45-year-old stagehand who lives in Chicago’s Old Irving Park neighborhood, said as he reminisced how the traveler in the commercial had the freedom to pull off in either direction. “I like spontaneity.”