f you’ve been sitting on the fence debating the pros-and-cons of owning an RV, chances are you’ve picked up on one big stumbling block to the popularity of the lifestyle blowing up even more than it has during the past year or two: cost. You’d be hard-pressed to miss it. That laminated travel trailer or fith wheel or motorhome you may have been eyeing has doubtlessly increased in price — sometimes dramatically — since the first time you saw it just a few months earlier on a dealer’s lot.
Contrary to what you might have read on social media sites, this has nothing to do with manufacturers or dealers “price gouging” their customers. Such moves would be contrary to an industry riding high and doing everything it can to continue to fuel that passion for the outdoors. Unfortunately, like many businesses today, it’s been swept up in a “perfect storm” of circumstances it has no control over — and we are all learning of the impacts from supply-chain shortages to transporta-tion issues.
It has, truth be told, been keeping a lot of people up late at night in an effort to develop “work-arounds” to keep the RV pipeline flowing.
“Pre-pandemic, a 3% increase in the price of an RV was viewed as a lot for a year,” said Ben Hirsch, COO of Campers Inn, a Florida-headquartered dealer group with 29 dealerships in 14 states. “I don’t have the numbers off-hand, but I’d ven-ture a guess that the average RV has gone up close to 30% from March 2020 to March 2022. That’s a lot. The increases don’t seem to be coming as quickly as they once did, but we’re still seeing increases — so it doesn’t appear to be over quite yet.”
The litany of outside factors hammering the industry are myriad, Hirsh noted, and include everything from a labor shortage in the RV-manufacturing hub of Elkhart and Gosh-en, Indiana — which in February recorded the lowest unem-ployment rate in the country at just 0.9% and has caused a “bidding war” of sorts for skilled labor — to freight pricing.
Hirsch’s comments were echoed by a top executive I spoke with at one of the major brands, who agreed to speak frankly by not being identified publicly.
“It’s not uncommon for a source to call an RV supplier and say ‘Hey, I’ve got that product for you loaded on our truck — and it’s going to cost ‘X’ amount of dollars.’ And that price is well beyond what was originally contracted for. The reply, though, runs along the lines of ‘Well, right now our raw materi-als and labor costs have gone up so fast that we can’t do it for that price anymore without losing money. So, you can either take it at this price or we literally have nine people lining up behind you to take it.’”
As he outlined, the litany of external forces wracking the RV industry are eye-opening. Aside from the aforementioned labor costs and raw materials costs — which literally aff ected everything — simply getting product from overseas has proven to be problematic.
“At one point, they literally ran out of containers to ship out of China,” he said. “As a consequence, container prices went anywhere from $3,000 up to a record of $50,000 for a negotiated container.”
Closer to home, remember that winter ice storm that ravaged Texas in February 2021? One of the companies it effected was the Dow Chemical Company — a major producer of the chemicals used to formulate everything from foam to glue.
“We didn’t have alternative sources for a lot of that stuff because a lot of our suppliers — the companies who take the Dow chemicals and make the fi nal stage product — wouldn’t source some of the raw materials from China because they didn’t trust them,” he added. “So we’ve been impacted by a lot of things that you would not think of. Whether it be screws or hardware or faucets, there’s not a single item that I can think of that has not been aff ected in some way, shape or form from a shortage.
“How am I supposed to build and sell a product when I don’t know what the fi nal cost is going to be?” he said. “So we’ve had to pass on the price increases that we used to be able to negotiate. We tried to hold retail pricing — but for the first time in my years in the industry, we couldn’t price-protect retail-sold coaches.”
Still, the OEMs continue to search for solutions, including sourcing components from alternative suppliers and stream-lining operations.
“So, instead of off ering fi ve or six different options for a particular model we might limit it to two options,” he said. “That way, we can buy more of those two particular items — and gain a lower price — versus buying fewer of five items.”
That said, it’s still virtually impossible to completely hold the line on price increases in this environment. As the manufacturing-side executive noted, he will give dealers prices “with the understanding that we cannot guarantee this price when it arrives. But what a lot of dealers are doing is telling the customer, ‘Here’s the MSRP today — and here’s the percent-age off MSRP that we are off ering. When this unit arrives, whatever the MSRP is at the time, we will give you that same percentage off .’ It’s been very successful for our dealers, because customers recognize the uncertainty in the market every time they go to the supermarket or the gas station.”
Perhaps most importantly, Campers Inn’s Hirsh said, the dealer needs to be completely transparent with its customers.
“We have seen signifi cant cost increases over the last year,” he said. “And we still believe that the products are great with great features — and we show customers the features, we talk about camping — and we’re honest about how prices have gone up. Most customers understand it. They’ve gone online and read people talking about it. The challenge right now is that it is so dependent on what they buy and who they buy from, both on the manufacturer and dealer sides. The long term, for Campers Inn, is about making sure that we have a customer for life. We want to make sure that they are able to aff ord not only this, but the future RV they want. I don’t think this is an easy time to have a ‘one size fits all’ answer for the consumer.”
However, if you aren’t looking to keep your current RV — which is what we’re here to help you do —just don’t wait too long to pull the trigger.
“I’ve heard some customers say they were going to sit on the sidelines and wait for the prices to come back down,” said the manufacturing executive. “I don’t anticipate them coming back down. They will definitely stabilize and level off , but a lot of us have put in infrastructure for customer support, we’re buying better components to try to eliminate warranty issues, we’ve had to increase wages to fi nd and retain good employ-ees. You can’t just go backwards on those things. I think some of this is baked in for the future.”