Editor’s Note: The following information about the future of RV parks and campgrounds and the RV industry appeared in a news release from Wert-Berater Inc. For more information call (888) 661-4449 or visit www.wert-berater.com.
Industry Outlook
Recovery for the campgrounds and RV parks industry has arrived. After fighting through declines, industry revenue is expected to perk up in 2012 and 2013. Wert-Berater Inc. forecasts that revenue will increase at an estimated annualized rate of 2.4% to $5.4 billion over the five years to 2017. Furthermore, industry revenue will increase 2.6% to $4.9 billion from 2012 to 2013.
Sensitivities
Travel spending is expected to increase over the next five years. In 2013, domestic travel is projected to increase 4.1%, while inbound travel will rise 5.4%. Increased travel rates will benefit campgrounds and RV parks, which have felt the pinch as people canceled and delayed their trips. Over the five years to 2017, domestic travel is forecast to increase at an average rate of 3.3% per year, while inbound travel will increase at an average annual rate of 5.3%.
The industry will also benefit from the economy improving, unemployment rates declining and people spending more money. Consumer spending is expected to increase 1.2% in 2013, and some of this renewed spending is expected to go toward trips and travel. Over the five years to 2017, consumer spending is anticipated to increase at an average annual rate of 3.3%.
Changes in the relative price of domestic and international travel also play a large part in determining travel patterns. Over the past five years, the U.S. dollar has depreciated, which has encouraged domestic travel by making foreign travel relatively more expensive. This factor has also encouraged foreigners to visit the United States. These trends benefit the campgrounds and RV parks industry by encouraging Americans to travel domestically while spurring an influx of foreign tourists. Other non-economic factors include the time available to travel, cultural and family links and the age of travelers. The price of gas is an additional factor that feeds directly into travel costs, especially in driving-dependent industries such as the campgrounds and RV parks industry.
RV sales
The performance of the RV dealers industry will improve through 2017. In 2013, its revenue is expected to increase 2.7% to $18.5 billion. Furthermore, revenue is forecast to grow at an annualized rate of 2.9% over the five years to 2017. However, RV sales will take years to return to their zenith, hampered by the lasting effects of wealth destruction on key customer markets’ ability to finance RV purchases. Current RV owners will also likely continue to choose domestic campgrounds and national parks over international tourist destinations because domestic travel remains a more cost-effective alternative to international travel.
The most promising case for long-term growth in RV sales is the aging Baby Boomer generation. The Baby Boomer population, consisting of people born from 1946 to 1964, numbers about 78.0 million people. This generation is expected to be wealthier and to live longer than any prior generation, making them prime targets for an RV lifestyle. Additionally, Boomers grew up during the height of the Boy Scouts’ popularity, resulting in an appreciation for the outdoors. According to the Recreation Vehicle Industry Association (RVIA), one-tenth of vehicle owners in this age group also own an RV.
Future trends
The industry is expected to resume expansion as the economy improves. Demand for on-site rentals of RVs and for the storage of RVs will rise. However, sales of used RVs are expected to accelerate over the initial part of the next five years until the arrival of more robust economic growth. Moreover, as revenue grows, industry profit margins are also expected to creep up slowly, making the industry more appealing for potential entrants. Over the five years to 2017, the number of enterprises is expected to grow at an annualized rate of 0.7% per year to 13,431. Employment is also expected to increase at an average annual rate of 1.6% to 47,140, though the industry will continue to use temporary employees during peak guest periods.
The progressive aging of the population, particularly of people aged 55 to 75, will continue to positively influence demand and industry revenue growth as the economic situation improves. Continuing strong growth in RV shipments will support this increase. There will also be an increasing trend toward the franchising of campgrounds, with operators being associated with chains and benefiting from joint promotional activities and access to online information and reservation systems for guests. Significant increases in direct online bookings by guests are expected.
Overall, increasing investment in improving facilities and amenities for guests will remain important, even in low growth periods. Such amenities include the provision of wireless Internet access and access to health and fitness centers. These will need to be supported by continuing industrywide and national promotional campaigns promoting the benefits of RV and camping activities.
