The RV industry has been facing unique challenges and changes over the past few years, with demand for RV travel slowing down compared to previous years. Nika Shneyder, co-founder of Chill RV Rentals, has noticed a decrease in bookings and shorter trips being taken due to limited discretionary spending. However, industry experts believe that demand will pick up in the summer months of July and August. RV sales are often seen as an economic bellwether, with consumer sentiment and economic conditions playing a significant role in the industry’s performance. Large dollar purchases like RVs are typically made when individuals feel confident about the economy, making them sensitive to interest rate changes.
RV shipments, a proxy for sales, are showing signs of recovery after bottoming out last year due to the pandemic. The current high cost of borrowing has made it challenging for businesses like Chill RV to add new vehicles to their fleet. As a result, they have turned to a consignment program to rent out privately owned RVs. The spike in RV sales during the pandemic led to a shift in the industry’s dynamics, with sales being pulled forward and impacting future years. Dealers have had to navigate a drop in demand and work through excess inventory as a result.
Despite the challenges faced by the industry, there is a sense of cautious optimism for the future. The RV Industry Association projects an increase in shipments for 2024 and 2025, with the expectation that interest rates will decrease and inflation will cool down. While consumer spending on RVs did fall off in recent years, the desire to own and purchase RVs remains high. In Elkhart, Indiana, known as the “RV Capital of the World,” the RV industry plays a significant role in the local economy, with manufacturing and transportation accounting for a large portion of jobs. The city’s unemployment rate has fluctuated in response to industry changes, with signs of optimism for future market strength.
At the dealer level, there is still a sense of optimism among customers looking to purchase RVs. Banks are still willing to lend money, albeit at a higher premium due to interest rates. Some customers are opting for more modest purchases and planning shorter trips closer to home due to inflation and fuel costs. The upcoming election year adds a layer of uncertainty, with some customers waiting to see how political outcomes may impact the market. Overall, sales are softer than during the pandemic boom but are showing improvement compared to last year. Despite ongoing challenges and changes in the industry, business in Elkhart appears to be relatively steady, with signs of busy activity and cautious optimism for the future.
