Americans are packing their bags, purchasing motor homes, and fleeing large cities as fears of a second coronavirus wave emerge.
Bloomberg reports floor traffic at Mike Regan’s two RV dealerships near Austin, Texas, jumped 30% compared with last May.
“Cooped-up Americans desperate to get out after months of lockdowns are dreaming of doing something—anything—that resembles a vacation. But a majority of them worry a second wave of the coronavirus is coming, and think politicians have pushed too fast to reopen. Unsurprisingly, when it comes to getting out of Dodge, the close-quarters of an airline cabin are a no-go,” said Bloomberg.
Regan said, “the minute the campgrounds opened on May 1, and the governor turned everyone loose, our business went through the roof.” He said sales at his Crestview dealerships slumped 50% in April, though expected to be significantly higher this month.
RV sales have been widely used as a recession marker (which is something we noted in August 2019): collapsing sales is the start of the downturn, and improving sales could suggest a trough and or upturn. However, as the economy dives into depression, not seen since the 1930s, RV sales are set to rise as the pandemic has frightened people away from crowded cities.
Not mentioned in the report, another reason for increased RV sales could be due to 38 million people have lost their jobs in the last several months, some may not be able to make rent payments or afford their homes, have started to explore other options for cheaper living accommodations.
Richard Curtin, a researcher at the University of Michigan who follows the RV industry, said the latest surge in RV buying shows consumers are still intact despite a “coronavirus recession.” However, he did not breakdown the sales in terms of demographics, which is likely to show baby boomers are the largest buyers – as the downturn has crushed millennials.
Regan said many of the buyers in May were considered the first time, and their motives for purchasing were due to the ongoing pandemic.
Mike Rhoades, 73, of Kyle, Texas, is one of those first time RV buyers who would typically be on a cruise ship, but the pandemic has severely altered his way of life. He purchased a $30,000 trailer and is planning a several week trip along the Texas Gulf Coast.
Camping World Holdings Inc., think of it as a giant toy shop for baby boomers, said RV sales in the first-quarter beat analyst projections. The company shifted much of its sales online during lockdowns.
Thor Motor Coach CEO Bob Martin said first-time buyers are buying entry-level and mid-range RVs.
“Every dealer that I talk to is just blown away by the reaction of people that have never even thought about an RV,” Martin said. “A lot of people are really going to look more at this lifestyle.”