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RV enthusiasts undaunted by skyrocketing gas prices
By Rachel Pleasant
Staff Writer
Gas prices reached record highs in mid-August, creating headaches for consumers and pangs of discomfort for the makers and sellers of gas-guzzling recreational vehicles.
According to AAA, the national average for a gallon of unleaded gasoline hit an all-time high of $2.56 in August, up 70 cents from a year ago
The price for a gallon of gas in the Charleston-North Charleston metro area, meanwhile, reached a high of $2.44, up from $1.78 a year ago.
Though motorists in the Lowcountry and beyond may dread pulling up to the pump, the area’s recreational vehicle dealerships have been mostly spared from the gas-price backlash—at least so far.
Pain at the pump
Gas prices haven’t hit the RV industry with a punch, say the owners of two local dealerships, but that’s not to say they haven’t had an impact.
“The impact we’ve seen has been with our first-time buyers,” says Sonny Slusser, owner of Sonny’s Camp-N-Travel in North Charleston. “Buyers envision all their trips will be to New York, Key West or the Grand Canyon, but 80 percent of trips are within 100 miles of home.”
Slusser says motorized vehicles in his showroom get as little as eight or as many as 22 miles to the gallon.
“If you’re getting 10 miles to the gallon, you’re probably going to spend an extra $16 on a trip,” Slusser says, an increase experienced RV owners are willing to pay but that deters first-time buyers.
At The Trail Center, also in North Charleston, owner Gloria Morgan says she sells only tow-along vehicles—a component of her business that has not slowed as a result of gas prices.
Though tow-along sales are still going strong, she has noticed that customers are increasingly opting for lightweight vehicles, which can be towed with more fuel-efficient trucks and SUVs.
Morgan also rents motorized vehicles, and she has noticed increased concern and procrastination among that customer base as the prices at the pump have increased.
Renting a motorized vehicle costs $175 per day plus the cost of fuel.
“There is uncertainty out there,” she says.
The terrorism factor
Slusser says the RV industry is still buoyed somewhat by memories of Sept. 11, 2001, memories made fresh every time an airplane crashes.
“People haven’t forgotten 9/11, and we just had an airliner crash in Greece and another one in Venezuela. That tends to fuel the RV market. People are skeptical about putting their families on planes,” he says.
In addition to reeling from memories of plane disasters, travelers simply don’t want to pay airfares and deal with the hassle of airport security checks, Morgan says.
“You have to practically undress, and if you smoke, you can’t take your lighters on the plane,” Morgan says. “Mass transit is a hassle.”
The way it was
While 2005’s gas prices are astronomical by certain standards, both Slusser and Morgan have seen their fair share of price increases, not to mention gas shortages, giving them an experienced perspective on the situation. While paying $2.50 a gallon isn’t fun, it could be much worse.
“I’ve always thought $3 a gallon would be a breaking point for my customers, at least for a while,” Slusser says.
“When I first got in the business, gas was at 30 cents per gallon. It went to 35 cents and people were skeptical. They thought we would go out of business. At 50 cents, things slowed down, but then people got used to it.”
Slusser, who’s been selling RVs since 1969, says his sales team averages between 25 and 30 deals a month.
The vehicles they sell range from as little as $4,000 for a foldable tow-along camper, to $210,000 for a 40-foot motorized vehicle complete with kitchen, bedroom and two televisions.
Gas mileage, though still in the single digits for many vehicles, has improved over the years. When Slusser first started in the business, a Winnebago got between three and four miles per gallon. That number has nearly doubled in the past few decades.
Industry indications
Though local dealerships are dealing with gas price jumps, the RV industry is showing signs of distress.
According to financial reports released in July, Fleetwood, the maker of everything from luxury coaches to tow-along trailers, posted a financial loss for the quarter that ended April 24. Recreational vehicle sales were down 21% to $381.3 million from $482.7 million during the same period a year ago. Fleetwood attributes the decline to a softer RV market.
Winnebago, likewise, posted a revenue decline. Revenues for the second quarter of fiscal year 2005 were $239.4 million, down from $266 million a year ago.
The declines posted by Fleetwood and Winnebago, Slusser says, may have something to do with the fact first-time buyers are leery of buying a vehicle with a tank that can require hundreds of dollars worth of gas to fill. He doesn’t expect, however, that the declines will last long.
“You’re probably going to see some pent up demand in six months. I’ve seen it too many times,” he says.
Still, any good businessperson has to think of the future and that’s just what Slusser’s doing.
He recently ordered a handful of Gulfstream Vistas, a 21-foot vehicle equipped with a Mercedes engine and transmission. The vehicle gets 22 miles per gallon of diesel fuel—making it one of the most energy-efficient RVs available.
“It’s not selling yet, but I think they will,” he says, adding that if gas prices don’t turn around—or at least level off—the RV of the future may be powered with hydrogen or with the same hybrid technology that has been so successful for car makers such as Toyota and Honda.
Until RV technology advances, Morgan says, most people are likely to pay the price of gas—no matter how high it gets—just to get away for a few days.
There are, however, those who will find another way.
“I have one customer who converted his truck to run off used cooking oil to save on gas. He bought a 26-foot travel trailer, and he’s headed to California,” Morgan says. “He goes to Chinese restaurants and asks them for their oil. They’re just going to throw it away.”
Rachel Pleasant is a staff writer for the Business Journal. E-mail her at rpleasant@charlestonbusiness.com.
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