Houston We Have a Problem: The RV Industry is Booming – Over 40K Shipments in July

July 2020 was the highest month for RV shipments in over 40 years. According to the RV Industry Association (RVIA) report, 43,035 RVs were shipped. This is a 53.5% increase in Shipments from July 2019. August is on track to do the same.

2019 vs 2020 RV Sales Graph. Source RVIA

Towable RVs lead the sales surge with over 39,160 sold in July. Motorhomes represented 3,875 of the units sold.

Coronavirus has driven interest in camping and family activities that are safe. I expect to see sales strong through at least 2021.

Campground Infrastructure is a Problem

The challenge I see with the sales surge is campground infrastructure and availability. Although manufacturers and dealerships can increase their throughput, campgrounds are not being opened at the same rate and many of the campgrounds out there have dated infrastructure. 40,000 new RV owners a month are going to want a place to take their rig that have modern amenities like 2 or more AC's, Microwaves, several TV's, etc. that put a demand on RV park power grid.

According to a post on Wikipedia, there are 13,000 private camp grounds plus 1,600 state parks in the US. If we assume each park will have 60 sites, that leaves us with a capacity somewhere around 109,000 RV park camping locations. Three 40K per month deliveries (120,000) will exceed the total number of camping locations in the US!

My numbers may be off some, but the point I am trying to make is that we have been experiencing campground availability issues before the pandemic. The increase in sales is going to put further pressure on campgrounds as demand increases.

Did I hear someone reading this say Boodocking? Maybe, but most new RVs are not set up to truly function off-grid day one. Accordingly, many of the deliveries are going to first time RVers. New RVs will need power upgrades, water upgrades, etc. before the can Boondock for more than a few days at a time. Campgrounds are easier for new RVers.

Low Supply and High Demand = More Expensive Camping

I don't have a crystal ball, but the math is the math. 2020 RV deliveries are up 50% or more month over month from 2019. As new people enter the market they will want a place to use their rigs. With campground availability somewhat fixed, the demand for spaces will very likely drive up cost.

When I started RVing it was $20-$30 a night to stay in a campground. I have been seeing $50-$60/night averages over the past couple of years. Record demand could push average prices to $80+ per night.

Now May be the Time to Open a Campground

If you have thought about running your own campground some day, now may be the day to think seriously about making the dream a reality. A campground can be built for around $20K per site. 60 sites at $20K each = $1.2-$1.5 million capital investment.

Renting each site for $70/day would generate $4,200 every day the campground is full. Clearly a campground isn't going to be full every day, but let's assume the site would be 50% full on average. This 60 site campground would generate $766,500 per year at 50% occupancy. There are certainly expenses needed to pay staff, mow the grass, etc., but a well ran site in a good location could completely pay off the initial investment in a few years. From that point forward, a campground could be a cash generating machine.

Jim Kerr

Jim Kerr is a entrepreneur that has founded several businesses including Orbitz, Team Convergence, Assure Flight, and Passion Highway. He is an airplane pilot, PADI SCUBA Dive Master and adventure traveler. Along with his wife Lisa, they travel North America in their 2020 Grand Design Momentum 397TH Toy Hauler with their cat Dexter. To find out more about Jim, visit JamesNKerr.com

Recent Posts