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Recreational Vehicle Industry Is Humming Along Road to Growth

Sales are up 17% from a year ago as more U.S. families choose domestic leisure travel after Sept. 11 attacks.

October 14, 2002|Terril Yue Jones | Times Staff Writer

Pete Recchio was just completing the funding and incorporation of his new recreational vehicle company last year when the terrorist attacks hit New York and Washington, bringing car sales and leisure travel to a screeching halt.

Shaken personally by the tragedy, he also was alarmed that his fledgling business would be stillborn, opening at a time when Americans were shunning big-ticket purchases, such as motor homes and trailers, and shying away from traveling for pleasure.

Fleetwood Enterprises of Riverside, the country's largest RV maker, shared that apprehension.

"Initially, orders were severely depressed, and we were quite concerned because we had seen some recovery after the big Nasdaq decline of March 2000," said Fleetwood Treasurer Lyle Larkin.

Claude Donati, vice president of sales and marketing for Gulfstream Coach Inc., is more blunt about his distress.

"We all thought the show was going down the toilet," he said, referring to the RV market.

They needn't have worried. The $9-billion RV industry, which runs from $5,000 trailers to million-dollar-plus motor homes, is booming. Sales are up 17% through August over the first eight months of last year. Stock prices have shot up for RV makers, which are boosting production. Margins are healthy.

And it's not so much despite Sept. 11 but because of it.

"It proves to us many times that the RV lifestyle is a passion and a goal of many people," said Recchio, sitting in a comfy swivel chair in the back of one of the 29-foot trailers made by his company, Ameri-Camp of Syracuse, Ind.

"It's a time when we can get away as a family and interact as a family, expose the kids to other parts of the country," said Amy Emett of Monrovia, who has been "RV'ing" ever since she got married 19 years ago and hopes to lease their house and retire with her husband to their 38-foot motor home within 15 years.

Life at home is busy with both parents working and two teenage girls busy with school, friends and sports. But the dozen or more trips a year the the Emetts take in their Winnebago Adventurer give them the chance to catch up with one another, as well as others who share their RV ardor.

"I absolutely love everyone we meet," said Emett, 40.

Daughter Bethanie is just as fervent: "It's the best," the 15-year-old said, especially the family trips to Rancho Oso in the Santa Barbara Mountains, where the family has made lifelong friends.

These days her elder sister, Sherr, 18, is outgrowing the family travel bug and stays inside the motor home more.

"As long as she has a TV and a mirror, she's OK," Bethanie said. "Me, I like traveling with the family." Games such as Pegs & Jokers and Rummy Cube are big hits in the Emett RV.

The Sept. 11 attacks came amid an onslaught of baby boomers reaching or nearing retirement who want to do more things as a family, a natural recipe for domestic sight-seeing sightseeing.

"The RV industry was the unwitting beneficiary of the attitude of seeing America one mile at a time instead of flying," said Dave Altman, president of Altman's Winnebago dealership in Baldwin Park.

"People are saying, 'What if I lost someone in my own family?' " Altman said at the annual RV dealers convention in Nashville recently. "With everything happening in the stock market, terrorism, the Middle East, people say, 'I'm tired of waiting,' and it's accelerated people to our industry."


Rising Popularity

A recent study found that more people are getting into RVs earlier in life. The average age of an RV buyer has come down from the low 60s to 49. The study by the University of Michigan for the RV Industry Assn. found that nearly one of every 12 families that drive, or 7 million households, have an RV of some kind.

"RV sales are right ahead of a big demographic wave, and we've just barely scratched that surface," said William Gibson, RV industry analyst with Banc of America Securities.

And much of the strength in the market has come in the last year.

"It seemed to be almost as if Americans made the buying decision turn in the industry's favor after 9/11," said John Diffendal, an analyst who covers RVs and manufactured housing for the investment bank BB&T Capital Markets.

"It's something to do with Americans staying domestic," Diffendal said. "They saw their future as one where they might not be traveling very much, and they wanted to see America."

After being nervous about the RV industry after Sept. 11, Gulfstream's Donati said, the resurgence now makes sense to him. The stock market's turmoil has made baby boomers cash-rich and looking to make that purchase they long have been eyeing, he said.

"Plus, 10,000 people retire every day," Donati said. "If we get 1% of them, the growth potential is enormous. And the growth is supposed to continue for eight years."

Historically low interest rates also fuel sales, which are up 31% year to date for Gulfstream, an RV maker based in northern Indiana, where much of the RV production in the U.S. is concentrated.

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