Despite The Pending Recession, RV Park Bookings Remain Strong

An industry news article recently declared the following regarding the outlook for 2024:

Kampgrounds of America’s (KOA) latest monthly report found more than half of 2023 consumers who camp have booked 2024 camping plans. KOA’s October Monthly Research Report found 51% of 2023 consumers who camp have at least one 2024 trip book. Even more, 58%, said their 2023 camping trips have exceeded expectations.

So why would RV Park bookings be so strong despite the pending U.S. recession and the world unrest and instability in both Ukraine and Israel. The answer is that the RV Park industry is extremely resilient during bad economic times for several key reasons:

  • A large segment of RV owners are retired and not concerned about recessions. Baby Boomers – defined as those born between 1946 and 1964 – represent the majority owners of RVs, and are virtually universally retired. In fact, there are around 10,000 Boomers retiring each day in the U.S. This giant segment of the U.S. population is completely immune to economic conditions as they live on social security and pension payments and don’t hold jobs at all.
  • Another large segment of RV owners are going to travel regardless of recessions. Millennials represent the other largest group of RV owners and they use these assets for their annual travel, which they are not going to forego regardless of economic conditions. As the average RV owner goes on the road around 14 days a year, that two weeks is going to occur no matter what.
  • Yet another segment of RV owners utilize RVs due to lower cost and recessions make them want to continue being prudent on travel expense. Then you have the RV owners that travel in an RV to save money, opting for the open road over expensive flights and hotel accommodations. When times are bad this group actually utilizes their RV more.
  • And then there’s the simple fact that many people will use their RVs to “get away” from the depressing environment of the U.S. during recessions. The letter “RV” standard for “recreational vehicle” – and the key term is “recreation”. When times are tough, people tend to be even more excited about getting away from it all and hitting the road.

Due to these reasons, RV Park occupancy remains strong in both good times and bad. In fact, here’s a comment from a study commissioned by the RV industry a few years ago:

“Camping reservations increased during the 1980s, 1990, and 2008 recessions while the rest of the economy deflated.”

But there’s one additional item that you need to be aware of. RV manufacturing data has no correlation with RV Park occupancy. There are several reasons for this:

  • There are over 11 million RVs already in circulation. That’s a huge number, and if they never produced another RV this is large enough to maintain high occupancy at most RV parks. If you consider the fact that the average RV owner goes on the road 14 days a year, the current number of RVs represents 154 million days of bookings.
  • When times are tough people tend to hold on to their RV longer – just like cars. Bad times beget longer hold times. Just like cars, many people trade in their older RVs on newer ones, and instead simply hold on longer when they are concerned about money. Although new models may be more appealing to the consumer, the RV Park owner gets paid the same regardless of how old the RV is.
  • Park owners are in the “parking business” and not the “retail sales business”. There’s a huge disconnect in the RV industry between park owners and retails sales lots. There is no material impact to park owners when sales fall, just as there is little impact to manufacturers from anything that park owners do.

The bottom line is that RV Parks are well positioned for the pending recession, and are one of the few real estate sectors that work well in both good times and bad.

For more information on the RV Park industry – including the science behind successful selection, analytics, negotiations, due diligence, financing and operations – then consider out RV Park Investor’s Home Study Course.

Frank Rolfe has been an active investor in RV parks for nearly two decades. As a result of his large collection of RV and mobile home parks, he has amassed a virtual reference book of knowledge on what makes for a successful RV park investment, as well as the potential pitfalls that destroy many investors.