“RVs Map a Different Road Back - Wall Street Journal” plus 1 more

RVs Map a Different Road Back - Wall Street Journal

Posted: 26 Dec 2010 03:31 PM PST

By JAMES R. HAGERTY

Thor Industries

Airstream is aiming at younger, active people who want to haul kayaks or mountain bikes inside their trailers.

The recreational-vehicle industry, a gauge of Americans' ability to splurge on adult toys, has been stuck in the slow lane of the road to recovery. Now, RV makers are trying to move things along with more fuel-efficient trailers aimed at frugal travelers tired of airports and motels.

U.S. sales of RVs—ranging from towable campers costing as little as $4,000 to bus-like behemoths with two bathrooms and king-size beds for $300,000 or more—boomed from 2000 through 2007 as Americans tapped their swelling home equity to buy shelter on wheels. The industry built bigger and fancier models, catering to those whose idea of getting away from it all involves taking a lot of it with them.

But RV sales began plunging in 2008 and last year were about 46% below the peak level in 2005, to around $6.2 billion, according to market researcher Statistical Surveys Inc. Several big manufacturers have gone through bankruptcy, and at least 200 dealers in new RVs, or 8% of the total, have left the business.

The industry is fighting back by offering lighter vehicles aimed at a broader range of buyers, while expanding advertising that touts the affordability of RV travel. It is also hoping that people put off by security pat-downs and other air-travel nuisances will turn to RVs.

"We have survived tough times in the past," Richard Coon, president of the Recreation Vehicle Industry Association, or RVIA, said in a pep talk to members of the trade group at its annual convention last month.

One priority is to make more converts like Tim and Jennifer Tracy of Pennington, N.J., both lawyers. They bought their first RV—a 27-foot Airstream, with a list price of about $70,000—last January. "We wanted to make memories for our boys," ages two and six, says Mr. Tracy. His idea of a vacation is backpacking; his wife prefers resort hotels. The RV was "a sort of compromise," Mr. Tracy says, and has proved a hit with the family.

Manufacturers are cutting the weight of RVs by as much as 25%, partly by using plastic composite materials instead of wood, to improve fuel economy and help counter fears of rising gasoline prices.

They also are trying to make RVs look less like white boxes. EverGreen Recreational Vehicle LLC recently introduced a sleek new trailer called the Element, which starts at $38,000 and is light enough to be pulled by a minivan. The RV industry gets a large share of its sales from buyers over age 50, but EverGreen's 37-year-old engineering director, Dan Rodabaugh, hopes the Element, with its simple and uncluttered interior, will appeal to younger buyers like himself.

Airstream Inc., a unit of Thor Industries Inc., recently teamed up with the retailer Eddie Bauer LLC to design and market a model aimed at younger and more active people who want to haul kayaks or mountain bikes inside their trailers.

The industry association spent about $8.25 million in 2010 to buy TV and other ads using talking animals to tout the economy and family-friendliness of RV trips. It plans to increase that budget to about $11 million in 2011 and run the ads in movie theaters as well as on cable TV, online and in print.

"Our best commercial for our industry is the airlines," Robert J. Olson, chief executive of RV maker Winnebago Industries Inc., told analysts recently. "If you haven't gone on an airline lately, it's a real hassle." Meanwhile, the recent bed-bug scare helped make people warier of motels, says John Lenzo, an owner of Colonial Airstream, a dealer in Lakewood, N.J.

The industry's biggest manufacturer, Thor, was founded in 1980 when Wade Thompson and Peter Orthwein acquired an ailing Airstream. Since then, Thor has made a series of acquisitions that, along with organic growth, have given it about a third of the RV market in terms of sales. In 2009, Thor also shored up the industry's largest retailer, Camping World Inc., by lending $30 million to the owners of that chain so they could put more capital into the company.

Camping World, which has 78 stores, accounts for around 15% of Thor's total RV sales. "It would have been pretty messy if they had gone under," says Richard Riegel, senior group president of Thor. Marcus Lemonis, CEO of Camping World, says his company could have survived without the loans but wanted a "more flexible and comfortable balance sheet."

In the first nine months of 2010, U.S. retail sales of new RVs totaled about 152,000, up 5.5% from the depressed year-earlier level, according to Statistical Surveys. Manufacturers' shipments of RVs in 2011 are projected to rise 4%, to about 246,000 units, the RVIA trade group says. Thor's Mr. Riegel says shipments will grow to 300,000 annually by 2013, which would still leave them 23% below the market peak in 2006.

RVs have never appealed much to urban hipsters, and sales tend to be concentrated in smaller cities, towns and rural areas. The RVIA estimates that 8.3 million American households, or about 7%, own RVs. At this point, it remains largely a domestic industry. It's too costly to ship the big products around the world. Some of the manufacturers do have vague hopes of implanting themselves in China at some point in the future, but that's just talk for now. They say China lacks the infrastructure of places to park RVs.

Makers of RVs say the 76 million baby boomers remain a very promising market, though many have lost their home equity and savings and aren't in a position to buy now. As a result of those financial pressures, many boomers are likely to rent or share RVs rather than buy them, says John W. Martin, CEO of Boomer Project LLC, a market-research firm.

Write to James R. Hagerty at bob.hagerty@wsj.com

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National guide to highlight Route 66's Metro East leg - St. Louis Post-Dispatch

Posted: 26 Dec 2010 09:50 PM PST

Businesses along the Madison County leg of Route 66 have long been pit stops for tourists in cars, vans and motorcycles from all over the world.

Now a group is looking to attract another segment of the tourism population: bicyclists.

The national Adventure Cycling Association recently announced plans to map all 2,000-plus miles of Route 66 between Chicago and Santa Monica, Calif.

The plan is to create a guidebook offering turn-by-turn descriptions of the road and outlining bicycle-friendly services and cultural information along the way. The Montana-based association has created similar tour guides for St. George, Utah; areas between Vancouver and southern California; and several other parts of the country.

Association spokeswoman Winona Bateman said Route 66 makes sense for the organization.

"It was the overwhelming favorite among our members as far as what our next route will be," she said.

It will take three to four years to create.

Wofford said the added attention will help the area.

"It would be a good thing for everyone along the route," he said.

Route 66 cuts roughly from Edwardsville to the Old Chain of Rocks Bridge on Chouteau Island in Madison County. (The highway designation used several roads over the years.)

The project may dovetail with a League of Illinois Bicyclists project to create an Route 66 Trail from Chicago to Madison County. The organization is working with the state Department of Natural Resources and local groups to designate the trail.

"We can really piggy-back off their resources and expertise to make Illinois Route 66 to be a stepping stone to a national ride," said Executive Director Ed Barsotti.

"That more people want to do the kind of programs like bicycle rides on Route 66 is great news for us," said Laura Cohen, project director for the Confluence Partnership, a greenspace advocacy group. "Route 66 has a special place in American history."

Contact reporter Scott Cousins at 618-344-0264, ext. 113, or scousins@yourjournal.com

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Monday, December 27, 2010