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The RV Industry Proves Economic Theories Wrong Regarding Current Recession

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The coronavirus pandemic and the recession it has brought, has affected our planet in an unprecedented way. Human contact is shunned. As a result, thousands of businesses around the globe have shut their doors overnight. The restaurant industry, travel industry, movie industry and the gambling industry to name a few, have all been dealt a severe blow by the coronavirus. The International Labor Organization, a United Nations agency, warned that half the world’s workers are in danger of having their capabilities of earning a living seriously affected by the virus, TheGuradian.

The RV industry might be considered among the first wreckage of a recession.  After all, an RV is an expensive luxury. When those purse strings begin to tighten, luxuries are the first items to be passed over for more important things, like food and heat and water.  To make things even worse for the RV industry, most consumers won’t be in the position to make large purchases such as an RV. As a result, economists have always kept a close eye on Elkhart, Indiana, the RV capital of the world. However, according to FOX News and Yahoo, RV sales have skyrocketed in the past few months.

RV Industry has always been a bellwether for a recession, except now….

A year ago, if you Googled “RV Industry” and “economy”, you’d only read adverse articles. The RV industry had been on a downward spiral for years. According to the economic theory above, if economists used the RV industry as a barometer for the rest of the economy, news coming out of Elkart, Indiana (capital of the RV) would have many for the hills. One year ago, in August 2019, wholesale shipments of RVs were down 20.3%, year to date. As a result of low profits, Thor Industries Inc., a leading recreational vehicle manufacturer had been forced to slash the work week.

 

Why and how is the RV surviving the coronavirus recession?

But this coronavirus is a peculiar epidemic. With many experts within the healthcare field who face this threat everyday, a very powerful solution to fight the virus has been social distancing, and self isolation. This has proven to render the RV as a welcomed tool in the fight against the spread of COVID-19. Our national government considers the RV to be one of the greatest safeguards against the virus.

The government affairs team is currently engaging state officials, Congress, and the Vice President’s Coronavirus Taskforce to advocate for the use of RVs for emergency response purposes such as quarantine units, mobile staging units, mobile medical clinics, operating rooms, ICUs, bathroom trailers, laundry facilities, sleeping units, command centers, and more. RVs are uniquely able to meet these critical needs in an expedited timeframe. California has already announced their intention to purchase more than 1,300 travel trailers to use as quarantine units. The state team is working to advocate for similar uses for RVs in other states. RVIA

 

While the travel industry tailspins, the RV industry catapults

Dealerships are selling RVs in record numbers. Despite the economy and the looming recession, there are still plenty of people working and many still require the ability to travel. Such people are deciding against taking flights and other modes of transport. Instead, many are travelling in RVs. The travel industry has been most affected by the coronavirus. Cruise ships, flights and crowded hotel lobbies are some of the last places travelers want to be. The RV is a welcomed alternative.

Also, there are unpleasant glimpses into what cabin fever does to people. The Shining comes to mind. When people are locked indoors for extended periods of time it can take its toll. After weeks of obeying state-at-home orders, many people find RVs to be the perfect escape. Isolation makes people desire a change of scenery. However, with the coronvirus in the air, there really isn’t anywhere to go. RVs allow people to go anywhere they want, without stepping foot out of their homes.

As airline industry nose-tails RV industry soars

The RV is an excellent shield from outside viruses. In addition though, the RV is the only form of travel that people can feel safe. As a result, RV stock has soared

After taking a plunge with the broader market at the beginning of the coronavirus outbreak in the U.S., the RV stocks have bounced back triple digits. Shares of Thor Industries and Winnebago — the two biggest names in RVs and motor homes — have shot up more than 170% and 240%, respectively, from their March lows. RV suppliers, such as LCI Industries, also saw their stock prices surge. – CNBC

The airline industry is hurting. One of the leading airlines in the nation, United Airlines recently warned that the pandemic had hit the industry so hard, they would have to start laying off thousands of people. As a result of a reduction in passengers, United has also canceled most flights, except those going or coming from major cities.

Many travelers won’t take an airplane out of fear of catching the coronavirus. Even if these passengers were willing to take a flight, there are not many places to go to. According to Kayak.com, during the coronavirus, 88 countries are completely closed to commercial travel. Another 85 counties are partially closed. Entrance into such countries may depend on the traveler’s citizenship. Even if someone wants to take an airplane, they can’t.

RV sales soar across the country

This perfect storm of sorts has allowed RV sales to skyrocket. According to Shannon Nills, the owner of Oregon based Guaranty RV, sales are up. “Over the weekend we sold 52 units,” Nills said. “That’s almost double what we sell in a given weekend.” Other RV dealerships in Oregon has seen traffic on their websites more than triple. Fear of the coronavirus has inspired people to buy RVs in record numbers. In addition, consumers are eagerly researching RVs. NBC16

A local news story from Nebraska reflects a similar market trend. In Nebraska, RVs sales have also begun to catapult. Bish’s, a Nebraska based Lincoln RV and camper retailer, saw sales soar 200% during the month of April.

“The last four weeks it’s been doctors, nurses” said Justin Walls, Area General Manager at Bish’s. “We’ve sold a handful of campers to people who are wanting to quarantine from their family, not if, but when they do get the virus.”1011Now

Any market-based data-metric inspected, reflect similar RV industry sentiments. While the coronavirus recession has decimated many industries, the RV industry is standing strong. According to the Associated Press, the NPD retail tracker reported that in the last two weeks of March, sales for camping equipment jumped 30%, camp sets 119%, grills 74% and campfire equipment 42%.

Even when the coronavirus is a disturbing and distant memory, it is doubtful that people will be flocking to crowded airplanes and cruise-ships. Why subject yourself and your family to virus risks? A family vacation in a RV allows a family to spend more time together, save money on restaurants and hotels, and also avoid catching any viruses.

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