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Wheels on fire
Who's afraid of soaring gas prices? Not the drivers of these super-luxurious motor homes.
October 14, 2004: 3:45 PM EDT
By Les Christie CNN/Money contributing writer

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NEW YORK (CNN/Money) - You might think that soaring gas prices would have the recreational vehicle industry spinning its wheels.

Actually, sales of motor homes rose by 19.1 percent in the first half of 2004 versus last year. And nearly 7 million RVs are out on the road, according to a 2001 University of Michigan study commissioned by Recreational Vehicle Industry Association (RVIA).

This year, according to RVIA spokeman Jim Lubinskas, unit shipments have finally returned to the levels they hit in the late 1970s. Nearly 390,900 RVs were sold in 1978. After that, the industry took a major hit from gas rationing and price increases during the Iran hostage crisis.

Why are motor homes so hot?

"Demographics are definitely a factor in our favor," says Sheila Davis, spokeswoman for Winnebago Industries. The 77 million member boomer generation now forms the RV industry's biggest customer base.

New frontiers

One factor that has contributed to the accelerated pace of RV sales has been the discovery that they're useful for things other than long road trips. Davis says younger moms and dads are using them to house the family during motorcross weekends or to attend Nascar races, for example.

"You go to a Nascar track and it's just amazing to see thousand of RVs congregated," says Ed Caudill, CEO of Fleetwood, one of the largest motor home manufacturers.

Another short-range destination has become the local football stadium parking lot; John Madden and other broadcasters have put a bright spotlight on tailgate parties before football games.

These celebrations have become bigger and more elaborate with tailgaters arriving six or seven hours before game time and hauling in tables and chairs, wide-screen TVs, and gas grills and deep fryers on which they cook everything from chili to spare ribs to turduckens. For such revelers, an RV is practically a necessity.

Design and technical advances have made RVs more useful, too. Slideouts, sections that advance and retract from the sides, expand useable interior space. And smoother suspensions have improved handling.

The number of RV-owning households is projected to rise 15 percent between 2001 and 2010, outpacing overall U.S. household growth of 10 percent, according to the University of Michigan study.

Shrugging off fuel cost increases

Despite the fuel prices, three-fourths (75 percent) of RV owners say they expect to travel more and nearly a quarter (23 percent) will travel about the same this year as they did a year prior.

"The average RV is only driven 7,000 miles a year and gets 10 miles to the gallon," according to Caudill. Even a 50 percent rise in fuel costs would only add $500 or so to the cost of running an RV. As long as there are no long lines at the pump or rationing, higher fuel costs should have little impact on industry sales.

The desire to take more "mini-vacations," enjoy nature, travel at their own pace, escape stress and spend quality time with family were cited as the top reasons to travel more by RV. When fuel prices go up, RVers say they continue to travel, but sometimes adjust their plans or cut off a leg of their trip.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.