In today’s blog, we’ll cover the latest news on how rising gas prices are affecting RV travel and shipments. Is this the end of good times for the RV industry? Will distance travel die a swift death given rising prices? I’ll look at the data and talk about the emerging trends.
This Month’s Big Story
RVTravel.com did an outstanding survey of over 2,800 RVers about how energy prices will affect their summer travel plans. On the question, “Will high fuel prices affect your RV travels this summer?” 19% said it would dramatically reduce plans and another 34% said it would reduce miles traveled. So, 53% of those polled said it would impact RV travel. When the question was reframed as “How would $7 a gallon gas prices affect your summer travels?” 28% said it would drastically reduce travel plans and another 36% said it would reduce miles driven. This brings the total to 64%, nearly 2/3rds of those polled! You can read more of this interesting survey at RVTravel.com. Likewise, RVTravel.com is also reporting that some campground owners are beginning to see an uptick in cancellations related to current trends. Campgrounds in the Western U.S. near National Parks, have the larger risk, given the long distances required to travel there.
The RVDA survey of dealer confidence drops considerably
An RV dealer survey by Baird recently found that dealer confidence about conditions has dropped considerably from 64 to 55 since February. Any score above 50 is positive, but the 14-point drop is considerable and says that many dealers see clouds on the horizon. Although the report’s timing isn’t clear, it was likely taken after the Russian invasion of Ukraine.
RV Quality concerns remain
A very recent National Highway Traffic Safety Administration RV recall list showed that about 1,700 trailer frames were being recalled for improper welding of the front coupler. This affects about 1,000 2022 KZ RV units and about 650 Forest River units. Most models are generally larger travel trailers and tow haulers. I think this recall caught my eye because there is an assumption that frames are built right. There isn’t more detail about who the frame manufacturer is, but the entire recall is another note about quality issues in areas where we assumed things were being done well.
As we’ll see in a minute, manufacturing employment levels in Elkhart, Indiana, are at a record and increasing each month. Overall unemployment is at only 1.6% for January 2022. This almost guarantees that RV manufacturers are hiring new employees at a fast clip meaning average tenures on manufacturing lines are likely the lowest they’ve been in recent history. All this to say that RV quality is correlated to average line tenure, so we should expect more quality issues with RVs being produced in this environment.
Spotlight
In the last news show, I talked about how some Florida residents resented snowbirds from northern climates taking spots at state park campsites. I contacted the Florida State Parks department and was graciously given a treasure trove of data showing just how out-of-state visitors impact occupancy at the state parks. In a nutshell, only the winter months see more people from out-of-state occupying state park campsites vs. residents. Using all the data provided, from July 2021 through February 2022, 60% of all reservation nights were from residents, with July through December being 71% residents and January & February being only 35% residents. So, as expected, the ratio changes abruptly to more out-of-state visitors during January and February. Also, average nights per stay is 50% or so higher in winter months for out-of-state visitors, as expected.
If you are from Florida, the main problem is obviously getting state park camping spots in the high-demand months of January and February. Yet, not every state park is the same. We put together a great visualization of this comprehensive data at the park level on johnmarucci.com that you can play with to see what state parks are more intensely utilized by non-residents. As far as I know, since the state parks department directly provided these data, this is the only place you will find this information.
Data Download
Let’s take a look at how travel is being affected by rising energy prices.
First, TSA passenger volume has steadied at the 90% level compared to 2019, which is the most recent typical year to use as a baseline. The apparent most significant deterrent from air travel was Covid, which has largely faded in recent weeks. My take is that the final 10% of passenger volume is likely high-profit business travel which may not fully return to pre-pandemic levels. However, many more business conferences are adding in-person attendance options this year.
At the same time, RV shipments are increasing while manufacturing employment in the greater Elkhart, Indiana area is up from prior months, which are at historical highs. The RVIA adjusted its 2022 production outlook as dealer lots are filling up, and backorders are being filled. February came in at just shy of 54,000 units shipped, breaking another record. Travel trailers and Class B camper vans again broke records leading the way, with other motorized RVs lagging likely due to parts shortages.
Meanwhile new and used RVs for sale on RVTrader.com, are historically high, staying near or over 215,000 units for sale for the past several weeks. This is a 38% increase in new and used units for sales year-over-year. My take is that the industry is overproducing units just now, given an inflationary environment, especially higher energy prices, which will likely work to quell demand. Energy prices will get passed through to daily staples like food, meaning more money will go toward daily necessities. If true, we may see a slowdown in lower-end and mid-priced RVs sales since inflation disproportionately affects those with less wealth.
My take, is if you are considering buying just now, be aware of potential quality issues, given the record pace RVs have been produced lately. Also, real discounting on new units should return shortly, driving down prices. This will also impact the used market as used prices are usually a function of discounted prices on new RVs.
Gas prices are retreating from the March 11 highs as many states are now back below the $4 per gallon price for regular unleaded. The current price as of March 28 was $4.246, about 9 cents lower than the high price on March 11. An RV trip of 3,000 miles at 10 mpg would cost $1,274 now vs. $858 a year ago, about a 48% increase.
You Can Do Good with your RV
Jon Truscott of Bournemouth UK saw the plight of so many Ukrainian refugees going to Poland and wondered what he could do about it. It so happens that Jon also owns a Motorhome and decided to use it for good. He used his motorhome to transport baby clothes, sleeping bags, baby food, and diapers for displaced children in cooperation with a local aid organization. As of Monday, March 28th, he had completed one full trip and was planning to do more. He is recording his trip to deliver goods with regular posts on Facebook at UK Motorhomes for Ukraine.
All the best in your camping endeavors!
As always, thanks to our fans who support our efforts by starting their shopping from our Amazon Storefront and by their generous financial support by using the THANKS feature located under each YouTube video ($ within the Heart icon). Your support is greatly appreciated!