“Okay. So I wanna drive my RV out. I wanna go to an RV park down by the water or by Disneyland. Two that I’ve researched that are close to the facility”.
- Coach Jim Harbaugh, Los Angeles Chargers
Legendary coach Jim Harbaugh was just named in charge of the Los Angeles Chargers and he announced he will be moving to California and living in his RV inside a local RV park. Why do even the elites like RV parks so much, and what does that suggest about the future of owning these assets?
The RV industry has done one of the best PR campaigns in history
Although it has not received much recognition for its efforts, the RV industry has conducted one of the most successful marketing campaigns in the U.S. The “Go RVing” campaign has been in operation for over 20 years and is considered one of the most impactful of any consumer ad campaign of all time. While Americans have not been “brainwashed” as a result of this well-targeted and strategic ad placement, it has definitely opened doors with successive generations of customers and is widely responsible for the positive feedback from the Millennial generation.
RV has developed its own unique niche and has a wide following
Through more than just the smart marketing, the RV industry has developed a unique following due to the efforts of manufacturers and park owners who have continued to improve their level of play at a fast pace over the years. Based on the concepts of “enjoyment of the outdoors”, “privacy yet access to group activities”, and “financially sensible travel” the industry has exceeded consumer expectations and built a brand around the powerful combination of value and quality. As a result, consumer studies have proven that RV owners are extremely happy with the product in all regards.
Every U.S. “Megatrend” is favorable for RV parks
Through a combination of hard work, timing and just sheer luck the RV industry has ended up on the correct side of every current U.S. “Megatrend” which include:
- The aging of the Baby Boomers. There are around 10,000 Baby Boomers retiring per day in the U.S. and a huge number of these will be devoting the remainder of their lives to travel.
- The rise of Millennials as the largest generation by number. Millennials have become the largest population segment in the U.S. with over 72 million members – and they also happen to be the one of the biggest buyers and users of RVs.
- The post-Covid desire for privacy, space and outdoor activities. Covid taught millions of Americans all about the benefits of personal space and outdoor activities and that has enormously increased the demand for outdoor living.
- The new focus on the environment. America has become extremely focused on the environment and the wonders of a natural habitat, which are to be found in RV parks.
- The impact of inflation on traditional travel. As the price of airfare and hotel travel have increased exponentially over the past decade, it has made RV travel appear much more sensible and affordable.
- Remote work. As a byproduct of Covid (and even starting before that era) many Americans have attained the ability to work remotely including from their laptop in an RV park.
- The tiny home movement. Tiny homes (units under 400 sq. ft.) have become a big item in America (with no less than five shows on HGTV) and RV parks are the only place in the U.S. that you can legally place these popular structures.
Because of these “Megatrends” RV ownership and occupancy have been soaring.
Increased use will lead to increased revenue for RV parks
The number of days that RV’s are parked in RV parks has also been steadily increasing. From an average of two weeks per year of usage, the number of days has been steadily increasing due to all of the items mentioned above. As more Americans use their RVs for extended periods (like Jim Harbaugh) it increases RV park revenue and boosts net income. Millions of Americans, in fact, are starting to consider RV living as their full-time goal, as they already own them and it’s a natural next-step as part of retirement and downsizing, or working remotely and downsizing.
Lenders are becoming more favorable to RV park loans
Because of the perennially positive PR, advancing revenue and increasing net income, more and more lenders are becoming fans of making RV park loans. This allows investors to get good rates when borrowing to buy RV parks as well as more access to capital. Today you can get financed from sellers, banks and even conduit lenders, not to mention the availability of SBA loans and even debt instruments provided by the Department of Agriculture.
The positive nature of the business makes “self-managing” a pleasure
Many RV park buyers plan on “self-managing” their asset, where they live either in the RV park or nearby and run the day-to-day activities – both in the office and out in the field. Since RV parks are often in beautiful settings, they relish in the upgrade to their standard of living as well as the ability to make a great return on their investment. But the fact that RV parks are a pleasurable experience for the customers makes running these type of businesses extra special as there is nothing but good news all day and no problems to contend with. Who would not want Jim Harbaugh living in their RV park?
Conclusion
RV parks are one of the greatest American investment options. They are properly situated to benefit from each and every trend in the U.S. today and offer a win/win business model. Jim Harbaugh would certainly agree!