RV business doing well despite rising fuel costs

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By Jennifer DeWitt | Saturday, June 07, 2008 |

Terry Madigan, a service technician at Thompson Family RV, installs a hitch package on a new camping trailer at the Davenport dealership. (Larry Fisher/QUAD-CITY TIMES) Buy this Photo

Record prices at the gas pump could have put the brakes on the recreational vehicle business. But instead, area RV dealers say business is healthy and customers may be looking at their hobby as an escape from the stresses of the tough economy.

Quad-City dealers see customers buying RVs, upgrading to larger units and planning trips as they always have. But their trips might be shorter this year and fuel costs are definitely weighing heavier on their minds.

“We’re down 10 percent but it’s not from the folks who have experienced RVing,” said Mark Thompson, the president of Thompson Family RV. “It may be some new buyers are being more cautious because of consumer confidence and they’re holding back. It’s not that we won’t see them next year.”

In fact, operators of his 49-year-old family business are so confident of the future that they are completing a $1.2 million expansion at their west Davenport operation that will add 22,000 square feet to the service department.

“People who RV aren’t going to give it up because gas costs more,” he said. “It’s like if golf is your thing and golf went up $100 — you’re still going to golf, you just might find other places to do it.”

John Dresselhaus, co-owner of the US Adventure RV dealership in Davenport, agrees that interest is not waning because of fuel prices. “We’re having a good year, but we’ve had pretty explosive growth in the last few years. The level of growth is not what we’ve had, but we are still growing.”

“Despite some of the doom and gloom you hear out there, people are still camping and finding RVing is a good way to spend time with friends,” he added.

On a national level, RV sales are projected to be down 14 percent for the year, although that varies widely across the country, said Kevin Broom, spokesman for the Recreation Vehicle Industry Association. The expected decline comes on the heels of a 9.5 percent sales decline in 2007. Sales were down 11.8 percent in the first quarter of 2008.

But there are some areas and some manufacturers that still are faring well, he said.

Others, such as the Iowa-based Winnebago Industries announced last week that it will close a Charles City plant and cut 270 jobs. The motor home manufacturer blamed higher fuel prices, a difficult lending environment and low consumer confidence for driving demand down.

“In the long term, we expect the industry to be healthy and resume growth when the economic situation improves,” Broom said.

A recent survey conducted by the association found that RV owners are adjusting to fuel costs rather than not traveling. The Campfire Canvass study, released last month, showed 82 percent of RV owners said RV vacations still are less expensive because of the savings on hotels and restaurant costs. And 76 percent polled said they intend to use their RVs at least as much this year as last year. But 58 percent indicated they would travel to destinations closer to home.

“They aren’t stopping that type of fun since fuel prices are higher but I can say they aren’t going as far,” said Dresselhaus, whose Brady Street dealership is beginning its fifth year.

Tom Enyeart, the owner of Shabbona Creek RV near Atkinson, Ill., said customers who might have thought about something as extensive as a cross-country trip to California have altered their plans and are heading to the East Coast because it’s closer. “Most people are cutting their travel plans in half — they’re spending the same but cutting the trip in half.”

“Even at $4 fuel, it’s still cheaper and frankly more fun than finding a hotel room,” said Enyeart, who was not letting fuel costs derail his own RV trip to Florida.

Operators of area campgrounds actually believe the situation could work in their favor by keeping more local campers close.

“A lot of us are concerned what the gas (situation) means, but in some sense it might be a positive,” said Roger Kean, the executive director of the Scott County Conservation Board, which oversees the county’s camping facilities. “It’s early to tell, but if the (Memorial Day) holiday weekend is any indication we were full even earlier than usual at West Lake Park.”

Leon Hodges supervises the U.S. Army Corps of Engineers Mississippi River Project, which oversees Corps facilities between Potosi, Wis., and Saverton, Mo. He also agrees it is early to judge how the season will go — especially since spring floods put some of the facilities out of business for awhile. “Reservation-wise, it looks like it’s going to be a good year. Everything’s shaping up for a good year if the river and Mother Nature just cooperate.”

Both Kean and Hodges said their facilities cater largely to the “local” camper — the person who lives within 50 to 60 miles. “We may actually see numbers increasing where people are staying closer to home,” Hodges said.

“The campers who drove one-and-a-half hours away might decide to stay here this summer,” Kean said, adding that those who drove to a Quad-City campground from an equal distance may choose a facility closer to home.

“People are still looking at it as a good outdoor form of recreation and fairly economical,” he said. “People like to camp, like to socialize, sit around the fire and have conversations with their friends.”

Broom, of the Recreation Vehicle Industry Association, said the industry is seeing a 20 percent rise in RV rentals.

Similarly, Thompson said his business is starting to see a market for foreign visitors — sparked by the value of the dollar and the ease of the Internet. He said one of his employees fielded a call from an Australian customer this week looking to buy an RV to travel the United States and sell it when the trip was over.

“Right now, it’s a good value to come to the United States. And $4 gas is cheap to them.”

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com.

Extra measures

With all eyes on energy costs, a study by the Recreation Vehicle Industry Association shows RV owners are taking extra measures to be more energy efficient. In addition to turning off home utilities while they are away, the survey found:

- 66 percent drive or tow their RV at 55 mph.

- 76 percent minimize air conditioning use by opening windows

- 74 percent turn off lights in their RVs

- 68 percent turn off water when bathing

- 15 percent use solar panels on their RVs

Find the 10 lowest prices for gas in the Q-C, at qctimes.com/pages/gas/