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| The Rental Alternative |
| RV Trade Digest, July 1999 |
| By D. Douglas Graham However much the industry may wish it were no so, there are drawbacks to RV ownership. Many younger RV owners have neither the time nor the means to use their vehicles as often as they would like. Young families are often hindered by employment obligations, especially in households supported by two breadwinners. In such a situation a traditional family vacation may become logistically impossible. How do you schedule a summer vacation around two demanding careers? Very often you don’t. Too many RVers wind up storing their vehicles for the better part of the year or, in worst cases, opting out of the lifestyle altogether. This is understandable given the considerable cost of RVs and the many peripheral expenses associated with them, such as regular maintenance and insurance. As a rule these problems do not beset the traditional RV marketplace, which is mostly comprised of older persons and retirees with the money to spend on the big rigs and plenty of time to use them. But time is of the essence here because it is slowly making this market less viable. Fully cognizant of the facts of life, the industry has focused much of its recent advertising effort on baby boomers. This has been made quite evident by the current run of Go RVing ads, most of which are aimed at people in their middle years or younger. In light of the time restrictions that define the hectic lives of most baby boomers, how can dealers lure these aspiring RVers to their lots? RV rental offers a practical alternative to ownership for people who can only enjoy the RV lifestyle part-time. But this is only the tip of the iceberg. The fact of the matter is that rental companies are gradually changing the way the entire industry conducts itself. The benefits to dealers are many, and most affect fundamental areas of the business. According to Sandra N. Bate, president of Bates Motor Home Rental Network Inc., in Las Vegas, Nev., the rental business is fast becoming a critical component of RVing. There is already a huge demand for RV rentals, she says, especially among European Tourists, who view “mobile” homes as comfortable and reasonable alternatives to hotels and resorts. Unlike many Americans, Europeans have a strong leisure ethic. They love to travel, and when they do so in this country they often spend months on the open road. An RV is ideal for this, but because most dealers don’t know much about the rental business, rental has become a virtual subset of the industry owned and operated by specialists in the field. Be that as it may, the rental business offers many indirect benefits to dealers. Rental companies regularly recycle their fleets, providing dealers with easy access to one of the industry’s most valuable commodities – used vehicles. Used product is often tough to come by. Veteran RVers often keep their rigs for years, forcing some dealers to rely exclusively on trade-ins or the consignment market to replenish their fleet for used stock. Rental companies offer dealers a consistent source of inventory, Bates claims. Moreover, the overall quality of the stock is superior to that provided by the general marketplace because it is scrupulously maintained and turned over frequently. A younger RVer with a yen to own his own vehicle may be less averse to purchasing a used vehicle in mint condition, even if it winds up sitting in the driveway most of the time. “Some manufacturers have come to view the rental business as the backbone of the industry,” she continues. “The market for buying a motor home has slimmed down in recent years because of rising costs and the fact that few have the time to use these huge investments to their full potential. This was hurting dealers for a long time, until they discovered the rental companies. Now many are appealing to companies like ours to buy RVs direct from the manufacturers. The rental companies keep the vehicles for a year or so, then they sell them to the dealers for significantly less money than it would cost to purchase them new. The vehicles are barely used because the rental companies turn them over so quickly. They’re so much less expensive than new stock that they practically fly off the lot. It’s a great deal for everybody, especially the consumer.” |
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