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High Gas Prices Not Slowing RV Industry

Category: RV News
Source: Washington Post
Publish Date: Thursday, March 22, 2007
Summary: Despite predictions to the contrary, higher gas prices have not dampened consumers interest in RVs.

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The Associated Press
Thursday, March 22, 2007; 1:28 AM

PERRY, Ga. -- With gas prices climbing, the turnout at a motor-home convention in the heart of Georgia this week is much better than most outsiders would expect.

About 20,000 motor-home owners and industry representatives have gathered at the Family Motor Coach Association's 77th International Convention to kick the tires of more than 1,000 enticing new models _ some costing more than $1 million and getting only 6 miles per gallon.

The recreational vehicle industry has been reporting record sales for the past five years, despite rising costs at the pump. Insiders credit a growing number of baby boomers who want the gas-guzzling vehicles for retirement and younger families opting for vacations closer to home for offsetting any potential losses because of soaring fuel costs.

"There's no better way to do it," said Bob Dalton, 70, who has owned a motor home for 30 years. "I can sleep in my own bed and I can eat my own food. I travel at my own pace. I go where I want."

Since the association last met in Perry in March 2005, the average price of regular self-serve gasoline has increased 21 percent, from $2.10 to $2.55 per gallon, according to the Lundberg Survey of 7,000 gas stations across the country.

So far, the higher fuel prices seem to have had little, if any, impact on Americans who vacation with recreational vehicles, which include simple pop-up campers, travel trailers towed by pickup trucks or SUVs and motor homes.

"If you can afford $600,000 for a coach, what's the difference between $2.50 or $3 per gallon," said Dalton, a military retiree. "It does affect me. I drive less and stay longer."

Winnebago Industries Inc., one of the nation's leading motor-home manufacturers, reported a 2.2 percent decline in net income and a 3.6 percent drop in revenues in its most recent quarter, saying rising fuel prices for shaking consumer confidence. But Kevin Broom, a spokesman for the Recreational Vehicle Industry Association, noted that Winnebago makes only motor homes and that its earnings report was not a reflection of the whole RV industry.

The RVIA, which represents 550 manufacturers and suppliers, expects sales to dip a little this year, but 2007 still looks to be the fourth best in the past 30 years, Broom said.

He cited favorable interest rates, the success of an industry program to attract younger buyers, and a switch from flying to other modes of vacation travel since the Sept. 11, 2001, terrorist attacks.

"RVs are the most cost effective way to vacation for a family, even when you factor in the cost of fuel," Broom said, noting that travel expenses such as hotels, restaurants and rental cars can be avoided or reduced when using an RV.

Mark Tuggle, sales manager for Douglasville-based John Bleakley Motor Homes, Georgia's largest motor-home dealership, said younger buyers are a new phenomenon in RV sales.

"If they weren't gray headed and had handicapped sticker, salespeople would shy away from them," Tuggle said. "Now they can be 32 years old and have two kids and you need to pay attention to them."

The influx of younger RVers still wasn't apparent at the motor-home convention, which ends Thursday. Many were gray-haired retirees, although a few appeared to be baby boomers _ people born between 1946 and 1964 who are reaching retirement age with company-sponsored 401(k) accounts and other savings.

"Baby boomers have more expendable income," said Dave Uhlenbrock, spokesman for the motor coach association, which has 120,000 family members. "They can do what they did at home in a motor home. There are motor homes with washers and dryers, lovely shower areas, satellite TV and Wi-Fi. They call them land yachts, and they truly are."

The models on display at the 1,700-acre convention site about 100 miles south of Atlanta ranged from small, diesel-powered models that cost about $90,000 and get 22 to 26 miles per gallon to high-end models with satellite television, leather upholstery, tile floors and marble countertops. These 40- to 42-foot mobile manors cost $600,000 to $1.3 million and have fuel economy in the single digits.

Dalton and many others stopped to admire a luxurious $382,000 motor home with a surprise inside. The 41-foot Travel Supreme gets only 6 to 8 miles per gallon, but nestled in its rear compartment is a tiny, fuel-efficient Smart car, a creation of DaimlerChrysler AG's Mercedes Car Group, rated at 40 mpg.

Drivers lower a ramp and back it out of the compartment for trips to monuments or grocery stores.

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