The coronavirus pandemic has led to countless changes across many facets of everyday life. Some changes, such as working from home, were likely inevitable at some point in the future even without the coronavirus outbreak.
However, one increasingly hot commodity as a result of the coronavirus may have been hard to predict for many. Following a boom and then subsequent bust after the financial crisis, sales of recreational vehicles are once again surging.
With many Americans hesitant to fly, stay in hotels and eat in restaurants, RVs are turning into the new preferred way to get away. Wholesale shipments of RVs totaled 40,462 last month, a 10.8% increase from the same period a year earlier and the highest monthly total since October 2018, according to the RV Industry Association.
June's total marks a quick turnaround from April and May, when shipments fell 82% and 30%, respectively, from the same period a year earlier.
"We didn’t anticipate this turn being as strong as it has been," president of the RV Industry Association Craig Kirby said.
"People don’t want to fly, they don’t want to stay in a hotel. In an RV, you can cook your own meals and sleep in your own bed."
RV makers are also betting that people will begin to use RVs for work. Kirby (NYSE:KEX) said RV manufacturers are developing RVs "with dedicated workspaces that allow for the desks and other systems to be stowed away once work is over."
First-time buyers are increasingly making up a larger portion of RV purchases. The RV Industry Association surveyed RV dealers and found that between 50% to 80% are first-time buyers, compared to just 25% to 35% during the same period last year.
"All dealers are reporting a high mix of first-time buyers as evident by lack of trade-in units," Wells Fargo (NYSE:WFC) analyst Tim Conder said.
"Dealers are saying as high as 80% of customers are first-time buyers ... vs. the typical 25% mix. The pandemic is driving the purchase decision for new-entrants."
The rush to RVs has been a boon to publicly traded RV manufacturers such as Thor Industries (NYSE:THO) and Winnebago Industries (NYSE:WGO). Shares of Thor Industries and Winnebago Industries are up more than 59% and 21%, respectively, so far this year compared to a gain of just 0.4% for the S&P 500.
"We have seen an incredible rebound in retail demand and dealer demand since early May across all our businesses," Winnebago Industries CEO Michael Happe said last month.
With people antsy to get away and a return to normalcy likely still a long way away, RV sales appear poised to show continued strength.