RV Consumers

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RV Consumers

The average RV consumer in the United States is 48 years old, married, owns their own house, has an annual income of $62,000, votes Republican, has at least a high school degree, and lives in a rural part of the West. However, the fastest growing segment of RV consumers is non-white millennials, with "nearly half of all non-white campers [saying] they want to try an RV" for camping accommodations. In addition, "millennials are a major target market for RV companies," as "more than half of RV buyers are under the age 45." A deep dive of my findings is below.

Definition

The definition of RV that was use in this research has been taken from the 2017 North American Camping Report: Recreational Vehicles (RVs) include, "type A, B, or C motor homes, travel trailers, fifth-wheels, pick-up campers and folding camper trailers (e.g., pop-ups)."

General market data

According to the Recreational Vehicle Industry Association, "RV shipments for 2017 totaled 504,599 units, an increase of 17.2% compared to 2016." This number even exceeded by 8% the high expectations of the 472,200 units predicted for 2017 sales at the end of 2016. The increases in 2017 represented the eighth consecutive year of "wholesale shipments growth" since the 2008 recession. Moreover, continued growth is expected for 2018, extending that streak to nine years. The Association also states that the market size for RVs in 2017 was estimated to be about $18.5 billion.

For 2017, Thor Industries and Winnebago Industries, two leaders in the RV market, both saw huge growth in sales. Thor Industries reported a 56.9% growth to $2.02 billion over 2016, while Winnebago reported a 75.1% percent growth in the last quarter of 2017. While much of this growth can be attributed to acquisitions, both companies recognized that to "capture the coveted age range, [they] have had to make major design changes to their product." These changes include upgrading amenities to include features like "cherry cabinets, top-quality counter tops, convection ovens, washers & dryers, surround-sound systems, satellite dishes, big-screen TVs and top-of-the-line beds." However, it also includes providing access to WiFi and numerous outlets for charging devices. These companies have also "begun to make lighter but more durable trailers," which "means customers can haul their trailer with a minivan or light duty truck."

Class B and C motor homes were up by 30% over 2016, while fifth wheel travel trailers saw a more modest increase at 10%. Popups and truck campers were the only two segments that saw decreases in 2016, each falling 10%.

Despite the growth for motor homes they still represent a small portion of RV sales as USA Today reports that "trailers... now account for 87% of the units sold." Moreover, while the average age of an RV consumer is 49, new RV buyers are "likely to be millennials, those in their 20s or early 30s, including a lot of young couples who don't have kids yet." However, millennials are more likely to purchase travel trailers because they have found that "travel trailers [are] easier to use than motor homes and two or three times less expensive." On the other hand, Baby Boomers are buying motor homes "more as a life-altering decision, one that will occupy most if not all of their time after retirement." That being said, "even when consumers do turn to motor homes, they’re looking at smaller models than before."

Currently, "about 10% of American householders over 55 own an RV, while 8.9% of those 35 to 54 do." Across all age groups in the United States, 7% of households have at least one RV, which represents 8 million homes. The Association credits the growth in popularity of RVs "mainly due to product innovations that appeal to retiring baby-boomers as well as younger buyers."

Most RVers end up purchasing more than one RV over their lifetime. In fact, "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." These purchases tend to follow a specific pattern: "The first purchase is usually for a smaller, less expensive unit... Then they move up as they start having children, then children bring friends or friends bring children. Then, there's another time when they move down in size. Then it's the retiree couple who is traveling around."

Full-timer RVers in the United States currently number about 1 million, but on average, owners and renters travel about 4,500 miles per year in RVs. The ability to bring pets along on road trips is a significant factor in ownership, with 54% of American travelers choosing to have their pets with them when they travel by RV.

When camping, "RVers continue to spend the most camping nights annually." The North American Camping Report indicated that 33% of RVers spend 8-30 days camping, compared to 25% of tent campers and 15% of cabin campers. Of the people who were new to camping in 2016, 26% chose an RV as their introductory accommodation, up from 18% in 2015.

RV spending

RV consumers "tend to be solidly middle income," with an average annual income of $62,000. As such, the amount consumers spend on RVs varies widely depending on the style, length, engine, and optional amenities of the vehicle. However, according to the Mobile Home Parts Store, the following price ranges are typical for RV purchases in the United States:

Class A diesel motor home: $230,000 — $1,000,000 (New), $35,000 — $500,000 (used)

Class A gas motor home: $105,000 — $200,000 (New), $20,000 — $150,000 (used)

Class C motor home: $45,000 — $95,000 (New), $12,000 — $80,000 (used)

Fifth Wheel: $40,000 — $160,000 (New), $15,000 — $115,000 (used)

Travel Trailer: $15,000 — $80,000 (New), $8,000 — $60,000 (Used)

RoverPass, in its "Costs of Buying an RV" article provided the following price points for new pop-up and truck bed campers:

Popups: $8,000 — $20,000 (New)

Truck bed campers: $3,000 — $40,000 (New)

Overall, RV owners spend an average of $117.52 per month on RV maintenance costs and $29.12 per night for a parking space. Fuel prices vary, as each vehicle consumes gas or diesel at different rates. However, Cars.CostHelper found that owners of Class A RVs will spend an average of $250 — $600 on fuel for every 800 to 1,500 miles and Class C RV owners will spend an average of $60 — $220 on fuel for every 250 to 550 miles.

Insurance premium costs also vary, but range between $50 to $400 per year, depending on the make, model, and year of the vehicle and the state in which it is registered.

Many people choose to rent RVs for their road trips. These consumers pay an average of $1,400 to $3,500 for a 7-day, 700-mile trip in a Class A motor home and an average of $1,000 to $2,500 for the same trip in a Class C motor home.

Demographics

Despite extensive research into RV consumer demographics, there were few reports available that included race in their studies. However, the North American Camping Report, sponsored by Kampgrounds of America (KOA), has been keeping track of various race-related statistics of North American campers since 2012. Assuming that the demographics of RV users are similar to camping demographics, we can make some inferences based on the data obtained by this report. Certainly, RV users are still overwhelmingly white, which coincides with the 74% of campers that are white compared to the 26% who identify as non-white. However, this percentage has fallen from 88% in 2012. In addition, this report provides a breakdown on who is open to trying an RV, which can also tell us who is more likely to buy one.

Currently, along with the 74% of campers who are white, 9% are Hispanic/Latino, 8% are African-American, 6% are Asian/Pacific Islander, and 3% are "other." However, these demographics are rapidly changing as "twenty-two percent of Hispanic campers, 31 percent of African American/Black campers and only 12 percent of white campers have started camping within the past couple of years... [In addition], a full 14 percent of new campers were of Asian descent, which is a large shift from overall population figures." This is "most prevalent among younger Asian campers, with 43 percent of this group reporting that they have only started camping in the past few years."

With regard to RV use while camping, currently 22% of campers stay in RVs. This number falls to 18% with millennials, but that number is trending upward. In contrast, 22% of Gen Xers, 29% of Baby Boomers, and 40% of Matures choose RVs when camping.

Non-whites are more likely to be open to trying RV accommodations as 26% of non-whites tried RVing for the first time in 2016, compared to just 20% that tried camping in a cabin. What's more is that "when asked what types of accommodations they would like to try for the first time in 2017, nearly half of all non-white campers said they want to try an RV (including 51 percent of African American/Black campers). Among those who say they want to try an RV, 1-in-5 specifically mention a camping van."

The specific breakdown of who wants to try which type of RV for camping accommodations is as follows:

28% of non-whites and 25% of whites want to try a motor home

20% of non-whites and 17% of whites want to try a travel trailer

19% of non-whites and 15% of whites want to try a camping van

15% of non-whites and 14% of whites want to try a pop-up trailer

11% of non-whites and 14% of whites want to try a 5th wheel

12% of each want to try a pickup camper

Other limited demographic data was discovered during my research. For instance, the typical RV owner is not only Caucasian, but is also married, has a full-time job, has at least a high school diploma, votes Republican, and lives in a two-person household. In addition, most RVers come from rural areas, with the highest number coming from the Western part of the United States. Rural or suburban RVers also frequently come from the Midwest and South.

RV purchase motivators

According to CNBC, "most RVs are used for frequent weekend getaways, maybe five or six trips a year, with one longer trip mixed in." Other major reasons for owning an RV include using "their vehicles to travel with pets, take business trips when necessary, go tailgating, or even participate in team sports."

However, the researchers at Brandon Gaille found that "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." Saving money, though, is not the only motivating factor that goes into an RV purchase decision. A Harris Interactive Poll discovered that RV owners believe their choice "supports a lifestyle that is both balanced and active, and that owning an RV help[s] them spend more time with their families, develop stronger bonds with their children, and [participate in] more outdoor activities."

In fact, when considering a healthier lifestyle, "56% of RV owners report that traveling in this fashion reduces their exposure to illnesses and other health risks." This is likely due to the fact that they are able to make their own meals using the built-in kitchen, sleep in familiar beds, and avoid public restrooms by using the one that comes equipped on most RVs. Moreover, 65% of RV owners "report that owning an RV helps them be able to escape from the pressures and stress that their life brings" and two-thirds of RV owners credit RVing with helping them to become more physically active. A majority of parents who own RVs (56%) also find that having their children travel with them in an RV provides educational benefits they wouldn't get elsewhere.

Competing Interests

After searching through market research reports, industry studies, and reputable industry-related websites, I was unable to find much information about competing interests upon which consumers are spending their disposable income. However, I was able to find that the purchase of vacation homes is falling, only representing 16% of the total housing market in 2015 compared to 21% in 2014. Likewise, first time boat buyers represent 33% of all boats sold in the U.S., which represents a 20% decline since 2005. As a result, the average age of a boat owner is increasing, whereas the average age of an RV owner "has been going down over the last decade."

This data seems to indicate that boats are the number one competitor to RVs, but only in the Baby Boomer and Gen X generations. Millennials are turning away from boating and choosing camping instead, as the data shows that "in the overall population millennials comprise 31 percent of the adult population, yet account for 38 percent of campers."

Conclusion

The popularity of RVs is on the rise, with sales growth expected to increase for the ninth consecutive year in 2018. While Caucasian consumers still represent the largest market for RVs, non-white consumers are purchasing these vehicles in ever-increasing numbers. Moreover, the average age of RV owners is on the decline as millennials enter the RV market more often each year.
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