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Were it not for the fact that federal recreation managers have been so captivated by the motorhome industry, and so obsequious to that industry's every desire, I'd take no joy in seeing an industry collapse. Even knowing how much harm this industry has done to public lands management, seeing it now wither is but a bittersweet experience.
For more than a decade, traditional tent-oriented campgrounds on public lands have been undergoing a process of upgrading to meet the demands of the motorhome industry. As a result of these changes, participation in traditional camping has been put into a state of decline. As a consequence, land managers are moving even further away from managing existing campgrounds for those traditional values that made camping such a popular family pastime. A downward spiral was created by the motorhome industry's success in convincing public land managers that the future of "camping" will be motorhome based.
Today the collapse of the motorhome industry is underway and unstoppable. I share none of the optimism expressed by recreation vehicle industry touts expressed in the appended article.
And why does any of this matter, especially to those who are not themselves into the motorhome life-style!? Because federal land managers have been creating a future upon the premise that their customers want more more-highly developed, motorhome-friendly, recreational opportunities. They are betting upon a future that is not to be and they are destroying the future that might have been.
Scott
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Nov 28, 2006
Steep uphill as recreation vehicle industry meets
By James B. Kelleher
LOUISVILLE, Kentucky, Nov 28 (Reuters) - The U.S. recreational vehicle
industry faces a steep uphill, but top manufacturers and dealers,
gathering this week for their annual convention, are banking on
favorable demographics to restore RV sales.
Retail sales of motor homes have fallen for 19 consecutive months as
higher interest rates and gas prices and a slowdown in housing have
weighed on consumer confidence.
Further deterioration is seen for 2007, when shipments of motor homes
and campers are expected to drop more than 11 percent, according to the
latest forecast from the Recreation Vehicle Industry Association (RVIA).
Yet on the eve of the convention, which will feature the latest
products from 96 RV and chassis manufacturers and draw 13,000
attendees, Richard Coon, the RVIA president, insisted he was optimistic.
The reason? Gas prices have moderated. More importantly, the baby
boomer generation continues to age. His favorite piece of data: Every
day, over 12,000 Americans turn 50. "The 50 and older crowd is our
prime market," Coon says. Over the next decade, that market is expected
to double to 80 million from 40 million.
Mike Molino, the president of the Recreational Vehicle Dealer
Association (RVDA), agrees. "It's hard to fail in this business," he
says. "We could do a bunch of things wrong because the demographics are
so strong."
NEW PRODUCTS KEY
But relying on an aging America to deliver customers to showrooms
wasn't much of a strategy in 2006 -- and it's unlikely to do much good
in 2007, analysts said.
Within the motor home category, sales of gas powered, "Class A" coaches
-- the biggest and most profitable the industry makes -- have fallen 20
percent year to date, while Class A diesel sales are down 12 percent.
Sales of towable travel trailers and folding campers are down a more
moderate 1 percent. But take out sales to U.S. relief agencies and
others after the back-to-back hurricanes that pummeled the U.S. Gulf
Coast in 2005 and "the declines are even worse," says Bob Simonson, an
analyst at William Blair.
As a result, stocks of some of the biggest publicly traded manufacturers have suffered.
Shares of Fleetwood Enterprises Inc. (FLE.N: Quote, Profile, Research)
and Monaco Coach Corp. (MNC.N: Quote, Profile, Research), the No. 1 and
No. 2 manufacturers in the Class A category, have fallen 37.5 percent
and 13.3 percent, respectively, as demand for the fuel-swilling
bus-like behemoths has dried up.
But not everyone's hurting. Thor Industries Inc. (THO.N: Quote,
Profile, Research) and Winnebago Industries Inc. (WGO.N: Quote,
Profile, Research) are up about 25 percent and 6 percent, respectively.
Both are big players in the hard-hit Class A space but have
aggressively brought new products to market, helping them avoid the
fate of their slower-moving peers.
Thor, the No. 1 maker of towables, has had success with the vehicle,
also known as the "toybox," a trailer with extra cargo room and a
drop-down rear wall popular with all-terrain vehicle enthusiasts and
motorcyclists.
Winnebago has scored big with its new diesel-powered Class C motor
homes -- smaller and more fuel efficient than the Class As but bigger
than the Class B van campers.
"Where companies are innovating, we see growth," says Craig Kennison,
an analyst at R.W. Baird. "Where companies are not innovating, they're
subject to interest rates and other macroeconomic variables and finding
it difficult to grow."
Even those markets are showing cracks. On Monday, Thor reported fiscal
first-quarter earnings below some analysts' estimates as it lowered
prices to help dealers move inventory.
Analysts said the industry still faces very strong economic headwinds,
including borrowing costs. While they are low by historic standards,
rates are still higher than a few years ago. That's discouraging RV
owners from trading up, a critical part of the market.
"We don't expect a turnaround to occur in the motor home industry until we see lower interest rates," says analyst Kennison.
The other big headwind is the real estate market. Because many
first-time buyers use home equity to finance such a discretionary
purchase, falling home prices kill new sales.
"I'm quite concerned about next year, particularly at the high end,"
says Simonson at William Blair. "This is a very discretionary item.
It's one that can be easily postponed."
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- Outdoor recreation 
