Home on wheels: The RV industry keeps on movin'

Thursday, February 22, 2007

By Linda Redeffer

Business Today

Don Hill, general manager of Youngblood's Capetown RV, sat in the living room of a fifth wheel. (Fred Lynch)

Recreational vehicles -- RVs -- as an industry have set up camp in the American economy and look to be settling in.

According to the Recreation Vehicle Industry Association, wholesale shipments of RVs peaked in 2005 and show no signs of slowing down. More RVs were shipped in the first nine months of 2006 than the first three quarters of any year since 1974, according to the RVIA. The RV industry, according to the RVIA, is a $14 billion-a-year endeavor.

Locally, RV sales reflect the growing trend. People who buy them range from families who find them an economical way to take a vacation to construction workers who take them from one job site to another to live in.

Don Hill, general manager of Youngblood Capetown RV Supercenter in Cape Girardeau, has watched the industry grow in the 30 years he has been in it. He said he has seen the quality of the units and the service on them improve and become more standardized. RVs have all of the comforts of home: microwave, full kitchen with laundry facilities, generator, Internet hookup capability. Some have "slide-outs" which expand the width of the RV for added room.

Thirty years ago, Hill said, only a few RV dealers were in business. Now his dealership is one of two in the Cape Girardeau/Scott City area off Interstate 55. There is a larger sales center in Sikeston, Mo., and a dealership in Jackson -- McDowell South.

"Years ago a town like Cape Girardeau could not support one dealership," Hill said. "The people have lots of choices."

Hills says he sells mostly travel trailers and 5th wheels -- units that are towed behind a vehicle -- although his business does carry the self-contained motor homes favored by retired buyers. Mike Hayden of McDowell South sells only the fifth-wheels and travel trailers.

"For a lot of people this is a second home," Hayden said.

RVs are financed like a second home. Hayden and Hill both offer financing ranging from 12 to 20 years, and RV owners can deduct the interest paid on the mortgage from their taxes, the same as with real estate.

"It's really economical," Hayden said. "I've found some people who planned to buy an RV and pay cash, and when they checked into it and found out about the tax provision, they decided to finance instead. They would be getting more money back from the taxes."

The RVIA has found that ownership now encompasses a 40-year age span, from age 35 to 75. More RVs are owned by those age 35 to 54 than any other group.

Hill said families find RVs an economical way to take a vacation. They avoid the lines and delays in crowded airports, and it's less expensive and easier to take your lodging with you than to put a family, including the family pet, in a hotel. The RV way of traveling is a lifestyle, Hill said. Families like the security and ease that come with parking a vehicle in a campground and knowing the children can play there safely with other children from nearby RV-ing families. Meals are easier and healthier in an RV kitchen rather than buying fast food on the road.

RV sales have remained strong even through the rise in gas prices. People who have them still use them, Hill said. They just don't go as far.

"We have people in Cape who go to the Perryville campground just to be away from the phones, be together as a family and spend family time together," he said.

Americans have also learned to weather the ups and downs of gas prices, he said.

"In 1979, people were dumping $20,000 RVs for $5,000," he said. "People did not panic this time. They took shorter trips and rode out the storm."

Hayden said the gas prices may have affected the sale of motor homes, but did not affect the travel trailers.

"They would take them to spots and leave them there and drive back and forth," he said. "We get a lot of people in construction work that travel. They don't want to stay in a hotel, and they have their own place to stay every night."

Hayden said because the industry keeps improving on the design of the RVs -- "making them bigger and lighter" -- he expects to see sales continue to grow.

The RVIA indicators show trends that favor long-term market growth. Americans are traveling shorter distances with less planning, according to the RVIA, which for RV owners is a convenient travel pattern. Travelers are showing less interest in going abroad, favoring scenic American destinations -- another indicator for continued RV sales growth.

"We sell fun," Hill said. "We sell something no one has to have. It's a fun business."

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