Signs we’re at an RV market top

Malcolm Forbes must be spinning in his grave.

A larger-than-life promoter of unbridled capitalism, Forbes had a Falstaffian appetite for over-the-top excess, exemplified by his extravagantly opulent 70th birthday bash in the Moroccan desert. The shindig cost a reported $2 million, featured Elizabeth Taylor as “honorary host” and had an 800-person guest list that included Barbara Walters, Walter Cronkite, Oscar de la Renta and three U.S. governors. That was in August 0f 1989. Six months later, Forbes was dead.

For all that, however, Forbes’ eponymous magazine was a serious—if doctrinaire—journalistic effort, with reporters and editors and fact-based writing. You might have disagreed with its emphasis or story selection or “spin,” but at least you could understand how it arrived at its conclusions. But the three-plus decades since the old man shuffled off-stage have not been kind to his legacy. The magazine now publishes just eight times a year and is no longer owned by the Forbes family, but nonetheless lends its name to such sketchy endeavors as the Forbes Business Council, a fee-based way for self-promoting businessmen to claim ersatz legitimacy as truth-tellers.

One current example of this faux journalism—and a pretty good if unintended signal of a market top—is this week’s piece headlined, “From Silicon Valley Cubicles to Scenic Vistas: How Millennials Are Redefining Success With Luxury RVs.” Written at least three years too late by Ben Spiegel, founder of “a boutique real estate private equity syndication and investment firm,” it purports to lay out the reasons why the RV park sector should be getting your investment dollars. Spiegel’s firm, Redwood Capital Advisors, actually has only one smallish RV park in its portfolio—a 56-site property in Alabama that it acquired just five months ago—but that didn’t prevent Spiegel from rhapsodizing about the “freedom, flexibility and an unbridled spirit of adventure” that makes RVing an irresistible millennial magnet.

Even the most blatant advertorial, however, should be grounded in solid facts, so it’s disconcerting to observe that Spiegel’s foundational observation—the one on which he builds his entire thesis—is that “the average RV owner today” is 32-years-old. Just rereading that statement should have made Spiegel question himself, but he did not, and neither did anyone at Forbes, which apparently is unconcerned about what’s published under its name. Neither did RVBusiness or the RV Industry Association’s News & Insights newsletter, both of which reposted Spiegel’s propaganda without comment and without questioning either his lack of expertise or his lack of a competent editor. Or a reliable BS detector.

At a guess, it seems that Spiegel misread an RV Industry Association (RVIA) report that concluded the average age of RV buyers is now 32—a vague and questionable assertion in itself, but in any case a long way from concluding that this is the average age of all RV owners, which remains several decades older. But accepting the misstatement at face value serves the industry’s increasingly desperate efforts at seeing only blue skies where others might notice that thunderheads are building. Wow! lookit all them young’uns piling into the RV space!!

One might shrug this off as just so much more industry self-promotion, if not for the fact that it comes at a precarious moment. The rapid approach of summer increasingly looks more threatening than inviting, with global warming leading to predictions of an early wildfire season in the Midwest and one of the most active hurricane seasons on record in the Atlantic. Ocean temperatures, meanwhile, have broken records every day for more than a year, and not just on the margins: 2024 is beating 2023 records by a lot. Warmer oceans account for the grim hurricane prognosis, of course, but more broadly are responsible for greater weather turbulence overall, which isn’t what campers want to hear.

A different kind of heat, meanwhile, is affecting capital markets, marked by this week’s report that the consumer price index rose 0.4% in March over the previous month, and 3.5% over the past year. Core prices, which strip out more volatile food and fuel costs, moved up 3.8%. All those figures, reported the Wall Street Journal, were higher than economic forecasts and suddenly raised the specter of continued high interest rates right through the end of the year.

That’s not good news for the people who make and sell RVs, the great majority of which require financing—and which, to be blunt, are not exactly “must have” purchases, no matter how much Ben Spiegel may claim that “more and more millennials are choosing to ‘put their equity on wheels.'” RV manufacturers have been desperate to refill the production pipeline, down almost half from its 2021 peak, and were almost gleeful about a 17.8% increase in February shipments year-over-year. But most of those newly produced RVs are just piling up on dealer’s lots, with sales in February down 8.9% year-over-year, even as a continuing inventory backlog of 2023 and even 2022 models has led to steep discounting. And while dealers typically increase inventory at this time of year in anticipation of a spring wave of shoppers, February’s decline is casting a long shadow.

The campground end of the business is likewise jittery. Despite KOA’s repeated announcements of how much business has improved year after year, those statements invariably are couched in dollar terms rather than camper nights, which actually have been declining (as I reported last fall). That means camping is only getting more expensive, which is just one more knock on a recreational activity whose backbone has been an increasingly beleaguered middle class.

Yet while KOA has not been forthright on the subject publicly, at least it is beginning to acknowledge the new reality internally. A KOA corporate “all hands on deck” meeting a few weeks ago to brainstorm ways to rebuild attendance reportedly resulted in various suggestions for franchisees, notably by tossing aside years of corporate opposition to discounts as “cheapening the value experience” of staying at a KOA. Deeply discounted “hot deals” are now in, especially for campers who add nights to their already booked stays, and especially midweek. Campgrounds that increase camper nights the most will get special awards, too—although those awards almost certainly will go to those who need them least, since larger multi-park operations will be better able to absorb price cuts than their mom-and-pop counterparts.

Meanwhile, the tattered remnants of the Forbes empire are still being milked for whatever cachet they can lend to poorly researched “pay to play” journalism. At least poor Malcolm went out on a high note, 35 long years ago.