The RV industry, along with RV prices, is booming, with production reaching all-time highs every year. However, the lower and middle classes do not drive this growth. Instead, it is the upper-middle class and wealthy who are buying RVs. Unfortunately, this leaves those not in those classes priced out of a growing market. As someone who has been involved in the RV industry for many years, I believe it’s time we start paying attention to this issue. We need to find a way to make RVs more affordable for everyone if we want to see this industry continue to grow.
KOA recently released the 2022 KOA North American Camping Report. This is a research report that KOA funds and reports on the state of camping in North America. It is worth a read. In this year’s report, there is a statistic that nearly 4 in 10 campers report having a household income of $100,00 or more. This is a little more than twice the amount of campers reporting income that high in 2019. This sparked my curiosity since many find camping an affordable way to vacation, especially with a family.
Along with the income information, the report indicated that RV sales are booming, and interest in purchasing an RV has been at all-time highs since the research began eight years ago. In addition, the report indicated that three-quarters of RVers own their RVs. I had to dig into this since it did not seem to make sense with the great resignation over the last couple of years and the prices of RVs.
The Stats on Prices and Income
A quick bit of research on the price of RVs was quite an eye-opener for me. In comparing prices of RVs between 2008 and 2015 and 2015 and 2022, I found that the cost of RVs is skyrocketing. The average increase for a motorhome or fifth wheel was between 40% and 50% between the seven years examined. The price increase for truck campers was as high as 57% between the seven-year gaps and as low as 30%. For travel trailers, the increase was between 30% and 40% for each period. This was all done by looking at like models. A low-cost pop-up can be $15,000!
Armed with that information, it was important to examine the median household income between those same periods. Between 2008 and 2015, the median household income in the U.S. increased by 10%. In 2008, the median household income was $50,221, and by 2015 it had only increased to $55,775. Between 2015 and 2022, it was the same 10% increase to $61,937.
In 2019, if a family had an income of less than $53,000, they were classified as poor and lower-middle-class. The middle-class was any household between $53,000 and $106,000. The upper-middle-class and rich had a household income above $106,000.
What Does it Mean
Because household income is only increasing at one-fourth of the rate that RV prices are increasing, middle and lower-class families will soon not be able to afford a once affordable way to vacation. They will not be able to afford to purchase any type of RV without going heavily into debt. In addition, as this is written, increases in interest rates will make financing anything, including RVs, a lot more expensive for consumers. To purchase some type of RV outright will be out of the question for middle and lower-class families in a few years.
Once a consumer purchases an RV, they have to consider all of the necessary equipment not included that is required to camp. All of this is increasing in price as well. Also, reservations for camping need to be made well in advance of a trip if a family wants to have a spot in a campground. The flexibility and spontaneity of camping are beginning to dwindle.
As an industry, we are pushing out those families that can get a lot of joy by being able to take an affordable vacation to see North America. Also, there will be fewer consumers of all aspects of RV travel in the future because of this disparity between rising RV prices compared to the income increases over the same period. I am not a professional business analyst, but I do not see this as sustainable for the RV industry.
The industry is seeing significant increases in all aspects currently. Still, the trajectory in pricing vs. affordability indicates a swift downturn may be ahead. Also, the industry will become exclusive to those in the upper-middle and high classes only. In the near term, money is rolling into the industry, and growth is incredible, as indicated by the North American Camping Report. Still, it is not sustainable based on the current and historical pricing trends.
What Can be Done
We have recorded several podcasts with RV companies since we began podcasting in 2018. A common theme is that none of the manufacturers want to be entry-level. Additionally, manufacturers are producing more and more tech-heavy RVs, driving up purchase and maintenance costs. This is great for the full-timer but unnecessary for the weekend family campers. Consumers need to let them know that entry-level is not a bad word. Companies need to focus on affordable options for the lower and middle class to keep this industry popular. This will give families in the lower and middle class an opportunity to enjoy the beautiful offerings this country has without going into significant debt.
All consumers do not need or want fancy tech when going on a camping trip. It is more important to them to be able to enjoy time with family outdoors away from the crowded conditions that usually come with being lower or lower-middle class.
Your Thoughts
The RV industry is changing, and not for the better. It is becoming an unaffordable way to travel. This is terrible news for everyone involved because the industry is no longer accessible to the lower and middle class. This needs to change if we want to keep RVing as a way to see America. What do you think? Leave a comment below and let us know your thoughts on this issue. You can also contact us through our contact page if you don’t want your comment public.
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