This industry includes establishments primarily engaged in the retail sale of new and used motor homes, recreational trailers, and campers (pickup coaches). Establishments primarily engaged in the retail sale of mobile homes are classified in SIC 5271: Mobile Home Dealers, and those selling utility trailers are classified in SIC 5599: Automotive Dealers, Not Elsewhere Classified.
441210 (Recreational Vehicle Dealers)
In 2001, according to the U.S. Census Bureau there were 3,134 establishments engaged in the retail sale of new and used motor homes, recreational trailers, and campers (pickup coaches). They employed some 34,829 people with an annual payroll of $1.2 billion. The majority of the dealers were small employing less than five people. The total number of dealers climbed to 4,396 in 2003, according to D&B Sales & Marketing Solutions. In addition, the average sales per establishment were approximately $2.80 million. The National RV Dealers Association (RVDA) estimated that recreational vehicle dealers, as well as the rental market generated $15.75 billion annually.
Recreational vehicle dealers represented the largest sector of the industry with 2,243 establishments, with 51 percent of the market. Recreational vehicle parts and accessories numbered 744 businesses and represented about 17 percent of the market. Motor home dealers numbered 4,934 establishments. The remaining sectors include camper and travel trailer dealers, campers (pick—up coaches) for mounting on trucks, and travel trailers (automobile, new and used). States with the majority of recreational dealers were California, Florida, Michigan, Pennsylvania, and Texas. Combined, they shared about 44 percent of the market.
Retailers in this industry sell new and used recreational vehicles ranging in size from pop-up camper trailers to large, luxury motor homes. The prices for these vehicles range from around $2,000 for a new camper trailer to more than $100,000 for some motor home models. In addition to new and used vehicles, the 3,000 dealers nationwide sell parts and accessories to accompany the vehicles and trailers, as well as extended warranties and service contracts. Most dealers also operate repair centers to service the vehicles and trailers they sell. Some dealers supplement the sales operation by renting recreational vehicles on a short-term basis. Other dealers have taken on lines of related recreational products like snowmobiles to try to balance out the slightly seasonal nature of the business.
The industry is dominated by smaller dealers who own single locations. However, there is a small but growing trend toward multiple location dealers, similar to that seen among dealers of new and used automobiles. Recreational vehicle dealers are more commonplace in states traditionally known as being recreation or retirement destinations, such as California, Texas, Michigan, and Florida.
The relative health of the industry is closely tied to the health of the national economy. Because of this, the fortunes of retailers of new and used recreational vehicles across the country have risen and fallen with national economic cycles.
The sale of new and used recreational vehicles is not a purely regional industry. New and used recreational vehicle dealers are spread across the country, although areas that attract seasonal or tourist business have greater numbers of dealerships.
The dealers in this industry do not rely on exclusive franchises from manufacturers to carry and sell manufacturer's goods. The dealers operate on nonexclusive sales contracts, though some dealers do carry only one brand of product. Though there are a large number of manufacturers of recreational vehicles, a few produce the bulk of product sold by dealers. The various brands produced by the public company Fleetwood Enterprises (Coleman, Pace Arrow, Southwind, Cambria, Limited, Jamboree, Tioga) account for about 37 percent of the sales made by dealers in the industry. Other manufacturers like Winnebago, Jayco, Coachman, and Thor provide dealers with both vehicles and parts and accessories.
Dealers sell a wide array of products with hopes of filling as many economic or recreational needs as possible. The smallest product sold is a camping trailer with collapsible sidewalls that fold for towing. Truck campers are designed to be loaded onto the bed or chassis of a truck and are designed to serve as temporary living quarters. Van conversions, a relatively new presence on dealers' lots, were the largest segment of the recreational vehicle market in 1998, with 148,600 units shipped to dealers for resale to consumers. Travel trailers, typically between 12 and 35 feet in length, made up the second largest segment of the recreational vehicle market. Self-contained motor home units, pickup truck conversions, and sport-utility vehicle conversions also were popular.
According to RVIA, 33 percent of dealers have sales between $1.5 and $3 million per year. Another 29 percent of the dealers have sales between $3 and $5 million annually, while 22 percent post annual sales of $5 to $10 million. Only seven percent sell more than $10 million of vehicles, accessories, and repairs; nine percent of the dealers in the industry had less than $1.5 million in sales.
Even prior to the introduction of the automobile, travelers hooked trailers to their horse-drawn carriages in order to carry extra gear that would make long trips more endurable. However, with the growth of motor travel, the need for easily accessible eating and sleeping facilities grew. According to Carlton Edwards' Homes for Travel and Living: The History and Development of the Recreational Vehicle and Mobile Home Industry, the first tent trailers were made by individuals who tired of setting up and taking down their camping gear with every stop. In 1926, the Norwich, New York-based Chenango Camp Trailer Company started up the first production line dedicated to the manufacture of recreational vehicles. By the end of the decade, a handful of entrepreneurs around the country were engaged in the production of tent campers and trailers.
The first manufacturers of trailers and motor homes sold directly to the consumer, primarily through word of mouth and referrals. As companies went into production on a larger scale, they set up regional distributorships. Distributors were responsible for selling the product by establishing dealer networks and servicing dealer accounts. Early dealers of recreational vehicles typically were already involved in the sale of automobiles or had some experience servicing them through gas/service stations. Many dealerships sold automobiles and recreational vehicles side-by-side.
By the late 1940s, regional distributorships were discontinued after manufacturers established direct relationships with their dealers. Vehicle dealers enjoyed the freedom to choose the product line they wished to carry from all those offered by manufacturers. The dealer gained the authority to discontinue lines when they weren't profitable or when the brands carried had too much product overlap. This arrangement also allowed dealers to add new lines in order to augment the selection and variety of vehicles offered.
Dealers were rocked in the 1970s by the oil embargo, recessionary conditions, and the credit crunch of the 1970s. However, sales bounced back in the early 1980s, and by the mid-1980s business was booming for manufacturers like Winnebago and Fleetwood and the dealers who sold their brands. In 1988, approximately 427,000 units were shipped to dealers. According to the Recreational Vehicle Industry Association (RVIA), manufacturers shipped 292,700 new units to dealers in 1998. The retail value of these units was $8.36 billion. In addition to new units, dealers also sell used vehicles, which account for some 30 percent of unit sales income.
Since the early days of the industry, dealers, along with manufacturers, have recognized the importance of camping and motor home parks to their fortunes. Availability and access to the parks was vital to the industry. The continued presence and popularity of national parks and other recreation areas have thus been a vital factor in recreational vehicle dealers' success. National parks had more than 60 million visitors in the mid-1990s, with 3.4 million overnight stays in recreation vehicles.
The Recreation Vehicle Dealers Association of America (RVDAA) noted that, in 1995, the industry showed a 4.7 percent decrease in units shipped. This was expected, as shipments had been increasing since 1991, and reductions often occur after three or four years of increases. Even so, demand for new units in 1995 was the second highest total in at least a decade; the demand has risen since then. The retail value of those units actually hit an all-time high.
RV manufacturers are offering a variety of high-tech amenities, which add to comfort (and price). According to RVIA, new technologies include moving walls that expand the RV's interior (sometimes doubling the available floor space) at the touch of a button; compact direct broadcast satellite antennas; global positioning systems to help travelers track their exact location; WebTV, which allows travelers access to the Internet; and space-saving appliances.
An Internet survey conducted by RV News offered encouraging results for the industry. Seventy-two percent of visitors to the RV American Web site already owned an RV, and 75 percent said they intended to purchase an RV within the next two years. Eighty percent were searching for parts and accessories; 75 percent were looking for dealers; 72 percent needed service facilities; and 68 percent sought information on new RVs.
About 1 household in 10 owned a recreation vehicle in 1996. Younger buyers tended to favor folding camper trailers and truck campers, while older buyers preferred motor homes and van campers. In the 1990s, the industry began courting baby-boomers, as that cohort moved into the prime RV buying age bracket of 45 to 54.
Recreational vehicles continue to be a lucrative market for the dealers that retail them. Total 2003 RV shipments, which include motor homes, travel trailers, fifth—wheel travel trailers, truck campers, and folding camping trailers numbered 320,800 units. The RVIA reported that this was a 3.2 percent over 2002. However, most impressive was the 21 percent increase in 2002, over 2001. According to a study conducted by the University of Michigan, in 2001, the projected number was expected to increase 15 percent from 2001 through to 2010. These results were based on the aging of the "baby boomers." The survey also concluded that there were 7.2 million recreational vehicles scattered over the highways in the United States, or some 7.8 million households. Travel trailers were the most popular and accounted for the largest shipment valued at $147 billion. Fifth wheels generated $67.4 billion, folding camper trailers were valued at $35.7 billion, truck campers retailed $8.8 billion, and motor homes represented $61.9 billion.
The industry was led by a few massive dealership operations. Holiday RV, based in Orlando, Florida, had 1999 sales of $78.5 million and 193 employees. Other companies include Cruise America and RV Centers. Fleet-wood Enterprises, which manufactures RVs, also distributes through its own retail outlets. The company, based in Riverside, California, had 1999 sales of $3.5 billion.
In 2003, the industry leader for travel trailers was Coachmen with 5.5 percent of the overall market, followed by R—Vision Inc. with 5.4 percent; Fleetwood Enterprises Prowler with 5.1 percent; and Thor Industries Dutchmen with 4.5 percent. Fleetwood Wilderness and Forest River Wildwood shared 3.5 percent; Thor Industries Keystone had 2.8 percent; K—Z Inc. Sportsmen had 2.7 percent; and Forest River Salem had 2.7 percent. Other significant companies include Winnebago, National RV, Monaco, Jayco, Starcraft RV, Forest River, and Gulfstream. Fleetwood and Winnebago dominated the motor home market.
According to the U.S. Bureau of Labor Statistics, the industry employed approximately 25,600 people in the mid-1990s. Most dealerships within the industry are relatively small operations, employing a small number of people. Forty-two percent of the dealers employ between 1 and 7 people; 8 to 15 people are employed by 33 percent of the establishments. Only 11 percent of industry dealers employ between 16 and 25 people, while another 13 percent of all dealers employ 26 or more people. The number of people on the dealership payroll may fluctuate according to the season and the strength of business. Part-time, low-wage employees may be temporarily hired to clean returned rental vehicles or those taken in on trade. Temporary employees are occasionally used to prepare sold vehicles for delivery.
On behalf of dealers, the RVDAA has set up courses at a few local community colleges in the southeastern United States in an effort to improve the quality of education given to dealership service technicians. The courses are open to those interested in working as a repair technician, as well as to those already employed by dealerships.
D&B Sales & Marketing Solutions, June 2004. Available from http://www.zapdata.com .
The National RV Dealers Association. "RV Retail Shipments by Product Type 2003." Statistical Surveys, 26 March 2004. Available from http://www.rvda.org .
The National RV Dealers Association. "2003 Top Manufacturer Market Share." Statistical Surveys, 26 March 2004. Available from http://www.rvda.org .
The National RV Dealers Association. "RV Shipment Review & Forecast," 2004. Available from http://www.rvda.org .
Recreational Vehicle Industry Association. RV Shipments Data 1978-1998. Available from http://www.rvia.org .
U.S. Census Bureau. Statistics of U.S. Businesses 2001. Available from http://www.census.gov/epcd/susb/2001/US421420.HTM .