Across the U.S. and Canada, RV rental firms report doing a brisk business this summer – more, perhaps, than some might have thought amid the year’s escalated gas prices.
In fact, from what we’ve learned, the RV rental sector may top $350 million in revenues this season and some industry observers consider it a leading indicator of future RV purchases. With this in mind, members of the RV Rental Association (RVRA), a division of the Recreation Vehicle Dealers Association of North America (RVDA), expected to increase the size of their fleets by 14% this year, according to a survey released earlier this year. That’s good news for firms such as Winnebago Industries Inc., Fleetwood Enterprises Inc., Forest River Inc. and Four Winds International Corp., key suppliers to the rental sector.
Leader Cruise America Inc., with a fleet of more than 4,000 motorhomes and travel trailers scattered across 132 locations in the U.S. and Canada, reports that bookings up 5% for the year and up 13% for the first 20 days of June. “Last year was a great year,” said Bob Caldarone, Cruise America’s director of marketing. “Any time we are ahead of last year, it is a terrific sign.”
The year started out soft, came back a little in February and March and turned slow again in April when gasoline prices began to escalate, says Caldarone. “When prices fluctuate northward,” he said, “customers hesitate. They don’t suspend; they postpone. Once prices stopped escalating, it became a non-issue.”
The RVRA said at the start of the summer that its members projected RV rentals to grow by an average of 24% this summer. And Bert Alanko, chairman of the 425-member trade group, sees nothing so far this season to dispel that.
“The rental industry is strong,” said Alanko, president of MBA Insurance, a Scottsdale, Ariz.-based insurance agency that insures some 1,500 RV rental clients nationwide. “What’s beautiful is when retail sales (of RVs) are good, rentals are strong. When sales are bad, rentals are strong. You may be getting a different customer but the rental business is still strong.”
The prime rental season used to be Memorial Day through Labor Day, says Alanko. More recently, however, based on the fleet inventory practices of his clients, Alanko finds seasons beginning as early as March or April and extending into October. “The summer for us is very strong,” said Joe Laing, director of marketing at El Monte, No. 2 in the RV rental business behind Cruise America. “I’m projecting it to be up between 10% and 20% but I can’t tell you anything better until after the fact because of the increase in domestic business.”
Founded in 1970, El Monte – the oldest name in the rental business – has grown in large part due to its foreign traffic. In some years, as much as 80% of El Monte’s business came from overseas, although that has leveled out some in recent years as El Monte expanded its U.S. penetration.
As for the impact of fuel prices on bookings, he agreed with Cruise America’s Caldarone that any impact on the rental business appears to have subsided as consumers in large part seem to have decided that spending an extra $50 on fuel for a 1,000-mile trip isn’t enough for them to cancel their vacation plans.
Any prospective RV renter who sits down and does the calculation, he maintained, find that it is “still cheaper to rent a motorhome than to fly and stay in a hotel someplace.”
“With gas prices, there are certain markers that once they hit causes a psychological panic,” said Laing, adding that those markers were reached when gas hit $1 a gallon and again at $2 a gallon. “Now, gas prices have hit $3 and above…These are psychological barriers that make great news stories, but don’t affect the RV rental consumer much…We’ve had some of the best sales we’ve ever had. Rentals are absolutely going positively.”
El Monte’s fleet ranges from 1,500 to 1,800 units and runs the spectrum from 22-foot Class C’s to 40-foot diesel pushers – most of them Winnebago and Fleetwood products situated at 33 rental locations, the largest concentration of them on the West Coast. The Class C with slideouts has become El Monte’s most popular rental unit, he said.