What will be the effect of Covid - 19 on the teardrop camper industry
This may be the year of the staycation, with more people willing to stay closer to home than travel by plane. If you have been reading RV related news over the last month, like I have, you’ll see that business is booming for many RV dealers across the US and Canada as the pandemic moves into its fourth month in North America. Many people are seeing camping or traveling by RV as a way to safely socially distance. People that have cancelled international summer vacations are looking for a way to safely have a vacation and the RV industry is seeing an uptick in business as a result. But what will this mean for the teardrop, squaredrop, and other tiny camper industry?
For one RV dealer, once their business was able to re-open after a 6 week hiatus, he is worried that he may not have enough travel trailers or motorhomes to fill the demand. Here’s an article that highlights an Austin, Texas dealership. El Monte RV, which has several locations in Los Angeles County, has seen a 400% increase in RV sales and rentals just in the month of April! This is not unique to the United States. “RV sales ‘surge’ as Calgary campers rearrange summer plans.” At a dealership in Alberta, Canada most of the staff was laid off as the country navigated it’s way through the pandemic. Now, they are reporting that nearly the entire staff has been brought back due to the surge in demand. Just in the last week, that dealership in Alberta sold 42 vehicles. A RV dealership in Missouri is delivering RVs three times what they normally do in a week.
RV rentals are booming as well, per RVshare, a peer-to-peer RV rental company. The week ending May 16, 2020 saw an increase of 650% in rentals. RVshare surveyed their customers and found that 93% of those booking a RV want to avoid crowds for their summer vacation. That is up 70% since the company’s last survey asked that question.
The stock markets have taken notice as well. Camping World management has noted that new customers appeared to be entering the market with fewer trade-ins, meaning there are more first time RV buyers. They also pivoted to online sales since most states or provinces enacted “stay at home orders.” Thor Industries and Winnebago Industries have also seen a quick recovery in their business compared to many other industries. Below are the latest stock charts for the last year. The charts are from May 27, 2020. The steep declines begin in late February or early March as Covid - 19 started to become a reality for North America. Unlike many industries, they all seem to be experiencing what is known as a “V shaped recovery,” a steep decline followed by a sharp increase.