One person’s blessing can be another person’s curse. Take gas prices, for example: according to AAA, Gas Buddy and the Energy Information Administration, gas demand is declining and so are gas prices, down more than 19 cents a gallon from a month ago and more than 14 cents below last year’s June prices. For the RVing public, that’s good news. For RV parks and campgrounds grown accustomed to a brisk amount of business, maybe not so much.
Although lower gas prices mean more people may decide to hit the road, one reason for those lower prices is . . . fewer people are hitting the road. “Demand is just kind of shallow,” according to AAA spokesperson Andrew Gross, as quoted in an Associated Press story earlier this week. “Traditionally—pre-pandemic—after Memorial Day, demand would start to pick up in the summertime. And we just don’t see it anymore.”
Of course, less demand is just one factor in the gas equation, and it will take months to sort through accumulating data to determine what’s really going on at the pump. Crude oil prices are one obvious variable. So is refinery capacity. But it’s not just prices that are down, as overall gas consumption is off by 10% from pre-pandemic levels. More fuel-efficient cars may account for some of that, as may growing sales of EVs. However you parse it, though, the bottom line seems to be that fewer people are driving this summer than in years past, and they’re not driving as far.
How much of that will translate into less traffic at RV parks and campgrounds? That, too, remains to be seen, but it certainly suggests the possibility that business overall will continue softening, as became noticeable early last year. One indicator the bloom is off the RVing rose: RV sales continue declining, even as RV manufacturers keep shoveling out new product on the thin hope that business will turn around any month now. Retail registrations in April, released Monday and the most recent available, marked a 9.8% drop compared to April of 2023. Nor was that a statistical blip: year-to-date sales are down 10.4% from the same four-month period last year.
The downturn has become pronounced enough that The Wall Street Journal took note last week in an article headlined, “It’s a Buyer’s Market for Boats, RVs and Other Pandemic Toys.” Extra cash, low interest rates and a desire for buffered recreation during the pandemic years resulted in a buying surge that pushed RV sales and campground visitation to record highs, but when all that turned around, a lot of new RV and boat owners were left with lightly-used playthings for which the bills keep coming. “The whole business is based on a monthly payment,” Marcus Lemonis, chief executive of Camping World Holdings, told the Journal.
Camping World’s stock price has been on a steady decline since the end of March, when it closed at $27.95 ahead of an expected seasonal upsurge in RV sales that still hasn’t arrived, and now sits at $18.68 amid a bearish short interest outlook. Lazydays Holding, an RV dealership that describes itself as the world’s largest, saw its shares tank more than 64% over the past year and lost $1.63 a share in the first quarter, as reported mid-May; it’s now on the verge of being delisted. Thor Industries, the world’s largest RV manufacturer, reported last week that sales for its fiscal third quarter were down 40% and earnings per share were down by two-thirds from the same period a year earlier.
To be sure, none of that automatically translates into slower business for RV parks and campgrounds, which may yet hope that a continued decline in gas prices will tease out more traffic. But it does suggest a shift in the recreational zeitgeist, a turning away from a pandemic-induced “it” thing to something that’s less physically demanding and with less of a long-term financial overhang. That might mean glamping—which puts the onus of capital investment on campground owners, rather than on campers. It might mean flying off to places an RV just can’t go. Or maybe it just means a return to staycations, now that most people feel comfortable hosting friends and family on familiar turf.
Then there’s the whole pesky weather problem that no one in the campground industry likes to talk about. RV park owners and RV retailers and manufacturers may resolutely turn a blind eye to the issue, but campers aren’t, and they’re making plans—or not making plans—accordingly. There are only so many crushing tornadoes or fire-ravaged hillsides or biblical floods (hello, Florida!) that most people can absorb before they begin to question the wisdom of parking out in the open in a relatively small box on wheels. Next week’s forecast calls for the season’s first truly massive heat wave in much of the country. Any doubts about how that will affect year-over-year camping statistics?
Unlike the manufacturing and much of the retailing ends of the RVing industry, campgrounds and RV parks are still privately held and too fragmented to produce much in the way of reliable metrics. Nor are its trade associations able to keep a finger on the business pulse, forcing observers to rely mostly on anecdotal accounts of what’s going on. Thus far those accounts aren’t bullish, but more illumination on that score may be provided the next time KOA chooses to publicize its reservation numbers: if it follows recent practice, those numbers will be all about the dollars, not about camper nights—which last fall it reluctantly acknowledged have been down.
Perhaps RVers can hope site rates, like gas prices, will start responding to softened demand? Isn’t that, after all, the carrot that KOA and other adopters of “dynamic pricing” have dangled in front of their customers to ease the sting of demand-driven price increases?
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