After Hurricane Katrina devastated the Gulf Coast in 2005, at least one industry got a lift: recreational vehicle makers, who benefited from the more than $1 billion spent on travel trailers and mobile homes to house displaced residents.
But, according to an Associated Press report, after Hurricane Gustav made its way through the U.S., RV makers have little reason to expect a similar boost, said analysts, the companies and the Federal Emergency Management Agency (FEMA).
The key difference: Gustav is proving much milder than Katrina. The 2005 storm displaced about 1 million people, and FEMA spent more than $1 billion for more than 96,000 trailers and mobile homes to house evacuees.
Gustav, on the other hand, spared the Gulf Coast’s more populated areas, including New Orleans. Although the city evacuated more than 2 million people, officials have said they may be able to return home within days.
“Back in 2005, with Hurricane Katrina and Hurricane Rita, there was a significant number of displaced people who needed temporary housing for a period of time, and the RV industry really came through and provided that,” said Craig Kennison, an analyst with R.W. Baird & Co. “In this situation, I don’t think we have a large number of displaced people.”
FEMA spokeswoman Debbie Wing said it is still too early to know the housing needs of evacuees. However, the agency prefers to rely on permanent structures, such as apartments, for temporary housing first because they pose fewer logistical hurdles.
“Trailers and mobile homes are a last resort, certainly,” Wing said. “We look at other options first.”
In 2005, RV maker Fleetwood Enterprises Inc. took orders valued at $170 million from FEMA to provide trailers and manufactured homes for displaced residents.
This time, spokeswoman Kathy Munson said the company was not expecting much following Gustav, in part because of controversy that arose following Katrina over complaints that some residents in FEMA-dispatched trailers became sick from formaldehyde in the units.
Munson said Fleetwood trailers did not have the formaldehyde problem, but she said she expects FEMA to rely on other housing options this time.
“We have had a long-standing relationship with FEMA,” she said. “We’re very proud of the trailers we provided.”
Similarly, Coburg, Ore.-based Monaco Coach Corp. ramped up production of its travel trailers by the thousands following Katrina, but spokesman Craig Wanichek said the company was not expecting additional business from Gustav. He declined to comment further.
Still, while RV companies may not see added business from Gustav, the storm’s milder-than-expected fallout is obviously good fortune for residents, FEMA’s Wing said.
“Hopefully people will be able to return to their homes,” Wing said. “That’s the ideal.”