Over the past 40 years, RV industry trends have been very volatile. The number of wholesale shipments in 1978 has only been exceeded in one year , but the value of those shipments has been steadily on the rise.
In 1978, 389,900 RV unit shipments had an RV retail value of $4.077 billion. In 2014, 356,700 RV unit shipments had an RV retail value of $15.39 billion.
What does this mean for the RV industry? That the value of owning an RV is on the rise. 2014 saw the highest ever value of RV shipments. With the exception of 2000-2001, every year has been over $10 billion in value when it comes to RV unit shipments. With a record 9 million RV units on the road, the lifestyle with this type of vehicle has a strong and enduring appeal.
Who is Attracted to the RV Lifestyle?
- According to the Recreation Vehicle Industry Association, RV owners aged 35 to 54 posted the largest percentage gains in ownership over the past decade.
- RV ownership rates rise quickly and remain at high levels across all age groups until owners were above the age of 75 years.
- The number of RV-owning households has grown to a new peak of 8.9 million households, up from 7.9 million in 2005. According to Dr. Richard Curtin of the University of Michigan, 8.5% of U.S. households now own RVs, up from 8.0% in 2005.
- A total of 21% of all U.S. households stated intentions to purchase an RV at some point in the future. This represents only a slight decline from the 23% rate in 2005, and is ahead of the 16% rate in 2001.
- 70% of current RV owners say that they intend to purchase another RV to replace their current one at some point in the future. RV owners in the 18-34 age demographic are the most likely to purchase a second RV.
- The median income level of an RV owner is $62,000 per year. The average age of ownership is 48, which has been going down over the last decade.
- 39% of RV owners have children under the age of 18 living in their own. RV owners in the 35-54 age demographic posted the largest gains in ownership since 2005.
RV ownership is often seen as being a value purchase. Instead of investing into hotel rooms and other costs during a trip, RV owners can save money by parking somewhere, making their own meals, and getting closer to nature than a hotel room provides. A family of four can save up to 62% on the costs of a vacation simply by owning an RV. That means many families see an RV as being able to pay for itself over time. This is why sales have been strong, especially since the economic recovery from the 2007-2009 recession in the United States. Even when fuel prices go up, 4 out of 5 RV owners say that an RV vacation costs less than other forms of travel.
Why the RV Industry is Seeing Consistent Growth
- Ownership of an RV supports a lifestyle that is both balanced and active. Respondents to a Harris Interactive survey stated that owning an RV helped them spend more time with their families, develop stronger bonds with their children, and more outdoor activities.
- RV ownership also supports healthier eating choices when traveling on the road. There’s also better sleep since owners have their own beds, and having on-board bathroom facilities is also an advantage during a road trip.
- In the United States, some RV owners may be able to deduct the interest from the loan as a second home mortgage.
- Fuel costs would need to reach $7 per gallon for a family of four to have higher costs traveling with an RV than with other forms of vacation travel.
- Owning an RV encourages more family trips away from home. More than 90% of RV owners report taking 3+ miniature vacations per year thanks to the more than 16,000 campgrounds which accept RV units across the United States.
- RV owners can also use their vehicles to travel with pets, take business trips when necessary, go tailgating, or even participate in team sports.
- Green technologies are also being incorporated into modern RV design, attracting consumers who want eco-friendly options and energy efficiency with their vehicles.
- RV sales are expected to benefit as aging baby boomers continue to enter the age range in which RV ownership has been historically highest.
- This all adds up to a 64% gain in RV ownership in the United States since 1980. Population and demographic trends support continued growth within the next decade.
An RV makes it easy to go explore. This is why many consumers are attracted to this vehicle as a travel option. Add in some of the other advantages, such as the second home mortgage interest deduction that may be available, and it becomes a reasonable investment to make for the family. It creates a comfortable way to travel, allows families to be able to take their pets along for the ride, and the cost is similar to upper-end vehicles that many families with income levels associated with RV ownership may desire. With the largest segment of RV owners being 35-54, the future looks bright for the industry as Millennials get to experience the joys of this lifestyle opportunity.
Combating the Age Barrier of RV Ownership
- In a survey conducted by GE, 41% of people [mostly RV dealers] expected sales to rise 5-10% in the next year.
- Another 26% expected sales growth to reach 10-15%.
- Many in the 35-54 age demographic are looking at an RV as an option over a van or other transportation option thanks to costs that hover in the $85k range for a new RV.
- Margo Armstrong, interviewed by CNBC and an RV owner since 1995, travels full-time and says that may owners are families or couples who are in their 60s.
- To attract younger RV owners, campgrounds and parks are opening exercise rooms, offering Yoga classes, and activities for children as people wish to stay more physically active.
- RV sales historically have tended to rise and fall with the economy and consumer confidence.
- Owning an RV today is associated with camping, and 87% of people who go camping also intend to enjoy at least one other outdoor activity.
- The most popular activity associated with camping is hiking, but photography, fishing, and kayaking are also active hobbies that are enjoyed and RV ownership helps make them more readily accessible.
When consumer confidence is on the rise, then RV sales typically follow. Recent trends have shown that more people are embracing the idea of RV ownership even in down economic times, however, because they see it as an investment into their families. There is still a stigma that only only older demographics purchase an RV, but that is slowly changing thanks to the number of features and options manufacturers are adding to new units. You used to think of owning an RV as part of retirement, but that perspective is changing and that means good things for the future of the RV industry.
The Motivations of an RV Owner
- 2 out of 3 people who do not own an RV see ownership of one as being a way to allow families to spend more quality time together.
- 73% of non-RV owners say that the cost-savings features of ownership for vacations and travel is a strong incentive to purchase an RV at some point in the future.
- Appealing to past RV owners (75%) and those with RV purchase plans (67%) were messages that RVs are becoming smaller, lighter, and more fuel efficient.
- 56% of RV owners report that traveling in this fashion reduces their exposure to illnesses and other health risks.
- 58% of RV owners say that having kids travel with them in this vehicle offers them additional educational benefits.
- 65% report that owning an RV helps them be able to escape from the pressures and stress that their life brings.
- 2 out of 3 RV owners say that ownership has helped them to become more physically active.
By marketing RV ownership to potential owners with these key motivations, sustainable growth looks to be rather easy to achieve. According to CNBC, the RV industry is thriving and is getting younger as income levels recover from the 2007-2009 recession. Although average income levels in the US are about $10k below the average income levels of an RV owner, that is a relatively small gap to close. A part-time job would be enough to cover this expense and allow more family time during off-times. This is how the RV industry can transcend niche demographics and market their products to households of virtually any size or income level.