Interest rates and inflation may have put a crimp in the American lifestyle, but RVing has given them a much-needed outlet, especially after the pandemic. And that gives this little niche industry the power it needs to keep shining bright, according to the latest news from FOX Business.
In a recent FOX report, the team reported that “RV travel saw a dramatic surge in the wake of COVID lockdowns, and as the industry returns to the pre-pandemic ‘sweet spot,’ the bellwether boasts a ‘bright future’ for the U.S. economy.”
“We are not seeing a looming crisis. We see long-term health in the industry, and there are things that we can’t control – the election cycle, inflation and interest rates. But if those move in the right direction, which we think they are, then definitely looking at a bright future,” RV Industry Association (RVIA) spokesperson Monika Geraci told Fox News Digital.
The story pinpointed the pandemic as the impetus behind Americans scooping up RVs to travel safely while distancing from others. In 2021, RV shipments reached historic levels at over 600,000 according to RVIA data.
Although shipments dipped in the year following COVID, with supply and demand issues being factored in, data now indicate this year’s shipments are outpacing last year’s. In fact, May 2024 saw an increase of 7.2% compared to the 30,919 units shipped in May 2023.
“What we have seen ebb would be the sales and the shipments, because so many people did buy RVs in those few years at the height of the pandemic. We’re coming back down to earth, if you will,” Geraci said.
“We’re settling back into … more of our regular cycle, production outpacing sales for six months and then sales outpacing production. We know that we’re getting back to that sweet spot where we’re replenishing dealers at the right level.”
That sweet spot gives entrepreneurs a sweet opportunity to hit it big in the RV and boat storage industry, which has failed to grow as rapidly as RV sales, leaving consumers with a huge dilemma: Where can we store these big rigs, especially if HOAs prevent them from being parked on lawns and driveways.
Last year, Toy Storage Nation worked with industry data analysts to identify an alarming fact: The amount of professionally operated storage facilities fell far short of meeting the needs of RV consumers. In fact, the math couldn’t lie: America needs approximately 5 times more RV and boat storage to meet the growing demand.
The experts also believe sales will likely swell again if and when interest rates soften. “Two years ago, when the Fed started raising interest rates, RV sales slowed down significantly, and they’ve been running at [a] recession-level rate really for the last two years,” Blue Compass CEO Jon Ferrando told Fox News Digital.
“2021 set an all-time record for RV sales in the US. 515,000 new RVs were sold in the U.S., and today we’re running around a 340,000 run rate, really impacted by inflation, high interest rates and consumer sentiment.”
Given the contrast between RV shipments and sales, the economic bellwether sends a “mixed” message about the long-term economy.
“[RVs] do make for a good indicator on how people are feeling about the economy. If people are feeling comfortable in their jobs, comfortable in their income, feeling comfortable, they’re more likely to go out and make that purchase,” Geraci said.
Geraci and Ferrando agreed that the primary “catalyst” for a better-performing RV industry and the overall economy is lowering interest rates.
“Purchase intent is still there. But we know from a lot of anecdotes and talking with dealers that the high interest rates are impeding people’s ability to follow through on that purchase intent,” Geraci explained.
Most investors now expect the Fed to begin cutting rates in September or November and are penciling in just two reductions this year – a dramatic shift from the start of the year, when they anticipated six rate cuts beginning as soon as March.
Ferrando said he still “sees us in a waiting game. I see pent-up demand, and we just need a catalyst,” Ferrando said. “I see sales taking off strongly in 2025 and beyond.”
“We’re more hopeful than we were a few weeks ago that interest rates will start to come down here in the next couple of months. As interest rates come down, we do expect both shipments and sales to continue to rise,” Geraci said. “That should be a good sign for the overall economy.”
