When will the RV bubble burst? Well, many say the RV bubble has burst already because RV shipments and RV sales are down from a few years ago. But has the bubble burst entirely or is there still plenty of air left in the bubble?
In today’s post, we explore this question and the details surrounding the loss of air in the RV bubble.
What Caused the RV Bubble?
One thing we know for sure is that the RV industry experienced a significant surge in interest in recent years.
The open road, the freedom to travel at your own pace, and the allure of the great outdoors have always been enticing aspects of the RV lifestyle. But as the COVID-19 pandemic inspired many more people to seek a safe way to travel (and get a much-needed change of scenery), the demand for RVs skyrocketed.
Let’s break down the intricacies of the RV surge.
The Pandemic
The RV boom may have been triggered by the pandemic, but it was fueled by a combination of factors that sprouted from that root issue:
Travel Restrictions
With international travel restrictions in place and concerns about the safety of air travel, many turned to RVs as a way to explore their own country without the need for flights, hotels, or crowded tourist destinations.
Remote Work
Remote work and remote learning options made it easier for families to hit the road for extended periods, with many using their RVs as mobile offices and online classrooms.
Opportunities to work remotely and attend school online opened up all sorts of travel possibilities for people during the COVID-19 pandemic, contributing to the tremendous demand in the RV market.
Shortage of RVs
This surge in demand, combined with complications and delays in the supply chain, led to a shortage of RVs in the market, driving up prices and causing a buying frenzy. Some people even reported waiting months for their new RV to be delivered and used RVs were selling for premiums. Scores of people who had never before committed to the purchase of an RV were buying. There was a surge in sales of Class A, B, and C rigs as well as all types of travel trailers.
What Are the Causes of the RV Bubble Bursting?
As we move further away from the 2020 RV craze we’ve seen a decline in shipments, and RV manufacturers and dealers have experienced a decline in demand. But why would fewer people be interested in purchasing recreational vehicles? Is it just that we’ve arrived at a new normal and people have suddenly lost interest in traveling by RV with their families? As it turns out, it’s not quite as simple as that, though it’s certainly a factor.
Pandemic Relief
It’s clear that the RV industry has undergone some significant changes. However, the demand for RVs remains strong, though it’s not as feverish as it was during the height of the pandemic. We know that the initial spike was likely caused by people seeking an escape from lockdowns. Now that domestic and international travel has resumed, some of the urgency to buy an RV has waned, and other factors have come into play as well.
Production Improvements
The production delays and shortages of key components that plagued the RV industry during the peak of the pandemic have improved, leading to a greater balance between supply and demand. Some RV manufacturers still face supply chain challenges, but the situation certainly isn’t as severe as it once was.
Inflation/Economic Conditions
Another factor contributing to the air being released from the RV bubble is the rising cost of RV ownership. The increasing cost of the RVs themselves (both new and used), the increase in campground fees, and the expenses associated with maintaining an RV have left people to realize that RV travel isn’t as budget-friendly as it was at one time.
Rising Fuel Prices
Rising fuel costs tied to inflation and other global factors have seen prices at the pump continuing to rise… often above-and-beyond the rate of inflation.
A significant increase in fuel prices made traveling by RV much more expensive, discouraging many RVers from traveling far and wide.
This has had a significant impact on the affordability of RV travel and has given travelers pause to consider other ways to vacation. For more on this topic, see our post on the RV staycation as a way around high fuel costs. You may also be interested in our post on the truth about diesel fuel discount programs.
Higher Interest Rates
Another factor of inflation is the increased interest rates that make it harder for people to finance a new purchase. Rising interest rates make this a particularly difficult time to purchase an RV.
So, Has the RV Bubble Burst?
All of the above being said, RV travel still has tremendous appeal. It offers a unique way to explore the continent and visit many destinations on and off the beaten path… all while maintaining a little home on the road. RV owners still (and will continue to) appreciate the freedom of traveling on their own terms while having the comforts of home along for the ride.
So, it might be more accurate to say that the RV bubble has softened… or that some of the air has been released from an industry that had become overinflated. But this isn’t necessarily a bad thing. The RV industry is returning to a more sustainable pace of growth. This kind of normalization allows manufacturers to focus on quality and innovation rather than merely trying to keep up with demand. It also means that RV buyers have more options and can be more selective when choosing their ideal rig.
The initial frenzy of demand may have subsided, but the RV industry is far from collapsing. RV travel remains a popular and viable way to explore the great outdoors, and the market is adjusting to more reasonable/typical levels.
While this latest RV bubble may continue to soften due to rising interest rates and other economic conditions, many RVers who might have been ready for a new rig may consider keeping and sprucing up their older rig. If you’re in that camp, be sure to check out our posts on RV renovation ideas, RV interior paint ideas, and RV furniture upgrades.
The bottom line is that while air has been released from a way-too-large bubble, the RV bubble hasn’t burst completely and there are scores of us continuing to enjoy RV travel!
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Mark L
Monday 6th of November 2023
The bubble has clearly burst. Professional RV appraisers have recently stated that the RV market is near rock bottom and the values for RVs haven’t been this low since 2009. Class A rigs have been particularly hit hard. Dealer lots are full of unsold new and used RVs, and little is moving off the lots because of all the factors that you mentioned above. Cash buyers, buyers with access to low interest rate financing, and uninformed fools are the only ones buying right now. It’s the best buyer’s market in decades. It doesn’t help that both dealers and private sellers are still pricing their rigs as though we are still in the midst of the pandemic. Dealers are hoping that uninformed buyers will pay the inflated pandemic price and see the prices as the “new normal.” Private sellers are tracking the high dealer ad prices on the various RV listing websites and setting their price in line with the dealers.
We are shopping for a new rig presently and found one we like. The seller listed the rig at $59k along with the dealer ads for the same rig. A professional appraisal that draws on the same sold-comps and other market data that all the dealers use revealed that the real market price for the rig is between $38k and $45k; that’s the price range that the same rigs are actually selling for nationwide. We shared the appraisal with the seller and he was astonished at the real market value of his rig. He is underwater on his loan, as many people are, and will have to pay out of pocket to cover the gap between the market selling price of his rig and what he owes the bank.
There is tremendous value in getting a professional market appraisal for a rig. Sellers benefit by using the data to price their rigs at a fair market price and selling it faster because it is priced right (even though the market value may be sobering and disheartening). Buyers benefit because they can make a fair market offer on the rig and avoid paying too much for an asset that rapidly depreciates and declines in market value. I, as a buyer, will spend $150 for an appraisal that saves me many thousands of dollars all day long and twice on Sundays. Smart buyers don’t pay inflated prices and spend their money frivolously. Knowledge really is power in the RV market.
TheRVgeeks
Tuesday 7th of November 2023
Well said and excellent points, Mark. Thanks so much for taking the time!
Paul
Monday 6th of November 2023
One specific point was missed in this article. That point being quality control over the past 3 years has really been remiss. While there were problems with supplies shortages that's still not an excuse for the lax quality control and the dealers lengthy repair conditions both of which fail to excite the buying community. PaulC/Florida - 9 year full timer
TheRVgeeks
Tuesday 7th of November 2023
True... but that's been the case in the RV industry since it was first started! Quality control on RVs is significantly behind other products... most of which are significantly less expensive than an RV! It's a shame, really... dealers and owners are left holding the bag for a lot of failures of QC by the RV manufacturers and their suppliers. We can only hope that foreign RV manufacturers will start making inroads into the North American market... some healthy competition on quality could really do wonders for the whole industry! 😉