Editor’s Note: The following article by RV Executive Today Editor Mary Ann Shreve tracks the continued rise in the RV rental market.
It’s full steam ahead this spring for the RV rental market as early signs appear to show increases in fleet size, bookings, and number of rental operations.
“We’re busier earlier this year, and we’re seeing a lot of independent people out there with just one unit who want to rent it out,” says Bert Alanko, president of MBA Insurance. “The market is really strong, based on the volume of inquiries we’re getting here for (insurance) quotes. And we’re seeing our clients add more units to their fleets.
“Renting RVs is definitely an expanding market opportunity,” he adds. “Between affordable gas, low interest rates, Baby Boomer interest in experiencing RV travel, and frustration with air travel, the stars are all aligned in our favor. It’s a great time to be in the business.”
Since January, Alanko has seen an uptick in the number of individuals with small fleets of two or three units who want to get into the rental business. He calls it “the Airbnb effect.”
With the rental business as good as it is, Alanko continues to be surprised by what he feels is short-sightedness from RV dealers who show no interest in entering the field. Foreign companies continue to open and expand operations here, while U.S. companies hold back.
“They’re coming from Australia, from New Zealand, and jumping into the business,” he said. “They see the opportunity that U.S. dealers and manufacturers just kind of pooh-pooh.”
In January, Santa Fe Springs, Calif.-based El Monte RV was purchased for $65 million by Tourism Holdings Ltd. (THL), an international RV rental company based in New Zealand. THL bought Los Angeles-based Road Bear RV, a national RV rental firm, in 2010. The New Zealand company estimates that the purchases now make it the second-largest RV rental operator in North America, with 28% of the market, behind Cruise America’s 52%. And THL plans to continue expanding into the Northern Hemisphere, which it views as the world’s largest recreational vehicle market.
“Companies are coming from other countries and having a large presence, but our people think you can’t make money in rentals – well, there’s a disconnect,” says Alanko.
Meanwhile, business is “exceptionally high” at Road Bear RV this spring, says Hannes Rosskopf, president and general manager of U.S. operations. “We have the largest number of vehicles on the road right now that we’ve ever had.”
The majority of Road Bear’s clients are European, and its employees are multilingual and cater to overseas visitors who want to explore the United States by RV. “Europeans appreciate having someone [at Road Bear] who speaks their language and can explain things to them and help them get on the road,” says Rosskopf. “They’re happy to do business with a company that has an international perspective.”
Every employee speaks from two to six languages, he says, insisting that finding multilingual employees isn’t a problem. “Once you have a base of international employees, word spreads and other multilingual people want to work here.”
Catering to international visitors might be more than some dealers want to tackle, but there are plenty of other niches in the RV rental market, says Rosskopf. “There are enough customers out there, it’s just a question of how you define them. And that determines how you go after them. For instance, there are regional customers versus national customers. And we don’t allow animals in our units, while some other companies do. Every company has a different niche.”
And although there’s competition in the rental business, he says it’s “friendly competition.” If he’s booked up, “we might send a customer to another rental company.”