Recovery, Boomers Send RV Sales Roaring Back

Pent-up demand and aging boomers are helping the industry post impressive sales figures.

Winnebago Industries, Inc. is the leading U.S. motor home manufacturer.

Winnebago Industries, Inc. is the leading U.S. motor home manufacturer.

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This spring, Jenny Miller and her husband bought a trailer to take their one-year-old son camping, but the plan had been in the works long before that.

"We had been talking about buying one for a couple of years, and we were just kind of waiting for our finances to get in order so we could make the purchase," says the 29-year-old Davenport, Iowa resident.

Miller is representative of a broader national trend boosting the RV industry. Recreational vehicle sales crashed during the recession as Americans lost jobs and savings, but now, buyers are back and ready to make the RV purchases they put off for so long.

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RV shipments dropped by over 30 percent in 2008 and again in 2009, according to figures from the Recreational Vehicle Industry Association. Annual shipments fell from nearly 400,000 per year in 2005 and 2006 to below 166,000 in 2009, forcing many dealerships and plants to lay off workers and some to close. But the RV industry soon rebounded, posting 46 percent growth in 2010. Since then, the increase has leveled off but remained strong, with manufacturers shipping nearly 290,000 units last year.

It's not just that Americans are feeling more comfortable shelling out $15,000 for a camping trailer or $100,000 for a motorhome, says one industry expert. Banks are also now more willing to help customers buy campers and motorhomes.

"This industry was impacted by the economic crisis, as far as the drying up of consumer credit," says Phil Ingrassia, president of the RV Dealers' Association. "As things have improved, the economy has gotten better and there's more credit available for consumer purchases like an RV."

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He predicts more strong growth this year, with shipments totaling nearly 310,000 for 2013.

The lack of credit options and decline in consumer spending represent only two of several obstacles the RV industry has had to face. Ingrassia points out that California and Florida, which both have in the past seen strong RV sales, were also hit particularly hard by the housing crisis and subsequent recession.

In addition, retailers first have to be financially healthy in order to sell vehicles. That means buying millions of dollars in campers and RVs to fill lots and showrooms, and some dealers don't have that much cash at their disposal.

"We may stock $3 to $4 million of motorhomes, easy, and that's before the towables. That's much more of an investment for a dealer, more of a commitment," says Lindsey Reines, owner of Reines RV in Manassas, Va. "Those who are committed and have a good selection are doing well."

One factor helping to buoy sales while the industry rebuilds is the bubble of baby boomers just now moving into retirement. According to figures from RVIA, the average RV owner is late-middle-aged, but still younger than baby boomers, at around 48 years-old. However, Ingrassia says that older buyers are also often big spenders, willing to spend on nicer models they plan to use in their free time as retirees.

That means the wave of baby boomers is "good news for the industry as far as the typical buyers of motorhomes and large fifth-wheels," Ingrassia says. "Those are typically older people who are getting ready to retire."

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Thor Industries, one of the leading manufacturers of RVs in the U.S., has already benefited from those aging boomers, says COO and President Bob Martin. But he also adds the company is not limiting itself to the retiree set, aiming some of its marketing efforts at younger buyers.

"We're definitely looking at Generation X and Y as well," he says. "We have a lot of families that are starting to camp."

Miller and her young family are a perfect example of that trend, but she says that she also knows some older buyers who recently made their own big purchase after a long wait: her parents.

"They've been looking for a new RV for a long time, probably at least two, three years, and they finally found one that they wanted." she says.