Like a lot of Canadians, Alan Hong and his wife bought a trailer in 2020. Air travel was out of the question because of pandemic restrictions, and it made sense to spend time and money exploring the great outdoors.
But now, they’re looking to get off life on the open road and get back in the air.
“We thought we would use the proceeds of the sale to do more international travelling,” said Hong, 37, who lives in Calgary.
RVs — along with boats, ATVs and other outdoor vehicles — sold like hotcakes during the pandemic, as people poured their vacation funds into goods that could be enjoyed closer to home.
But like Pelotons and semiconductors, the sector is now going through a market correction, with household spending on “major durable goods for outdoor recreation” down 11 per cent last year, according to Eric Desjardins, an economist at Statistics Canada.
Tourism spending is up, the agency reported, with air transport and accommodations leading the growth in the fourth quarter. However, pre-trip expenses — which includes RVs and camping equipment — was the only product category to decrease last year, falling nine per cent.
Amid inflation and high interest rates, sales of new RVs in particular dipped by around 20 per cent last year, and are now below pre-pandemic levels, according to the Recreational Vehicle Dealers Association of Canada.
“People have a little bit less discretionary income,” said Eleonore Hamm, the association’s president, who noted that RV rentals are still fairly strong.
The dip varied by province. In Alberta, the country’s RV hotspot, sales only fell about seven per cent, while sales in B.C. declined closer to 30 per cent, she said.
People aren’t just putting off buying a new RV. Some are getting rid of the one they have altogether.
“There’s quite a bit of pre-owned inventory on dealership lots at the moment,” said Hamm.
Listings of used RVs on RVDealers.ca more than doubled this quarter compared to the same period last year, said the website’s owner, Chris Perera.
He attributes the trend to two factors. Some people bought whatever RV they could get their hands on during the peak of the pandemic, and are now trying to trade in for a better model. Others have realized the lifestyle isn’t for them and are getting out of the market.
“Right now what we’re seeing is a buyer’s market,” said Perera, who also owns BoatDealers.ca and says a similar trend is unfolding in that sector.
Market ‘flooded,’ says seller
The buyer’s market is tough news for sellers like Jason Huntley.
Huntley has bought and sold many RVs in his decades-long camping career, and has had one listed online for about a year. He said this is the longest it’s ever taken him to make a sale.
“It feels to me like the market is pretty flooded,” he said.
The decline in demand is also hitting RV manufacturers like U.S.-based Winnebago, which saw its net revenue tumble roughly 19 per cent in its latest quarter, and Thor Industries, whose North American motorized RV sales declined about 23 per cent compared to the same period last year.
“[It’s a] bit of an industry reset,” said David Whiston, an analyst who covers the RV and auto sector for Morningstar. He said shipments from RV manufacturers hit their lowest level in about a decade last year.
“2021 versus 2020, it was basically turbocharged demand, and that’s not sustainable permanently.”
Still, Whiston believes the industry has long-term potential. The pandemic introduced a lot of people to camping and RVing for the first time, and while not everyone who tried it is going to stick with it, he believes there is still a wider pool of customers now than there was before the pandemic.
“Somebody [who] bought in 2020 isn’t necessarily buying in 2024, but in a few years’ time, they probably will be back in the market.”
For Hong, the RV seller, that might be the case for his family, too. At the moment, his busy career means he doesn’t have the time to spend on road-tripping and maintaining an RV, but he says he might feel differently in the future.
“We might get back to it, down the road.”
Source Agencies
