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THE EFFECT OF HIGH GAS PRICES ON RV
PARKS
By Frank Rolfe
In my town gasoline is around $4 a
gallon. It costs me almost $100 to fill up my Dodge Durango. As I’m driving down
the highway, I see a huge RV and think to myself “boy, that must cost a fortune
to fill up”. Surely, you would think, this gasoline crisis is going to put an
end to the RV Park Industry! Well, that’s the easy conclusion, but not quite the
right one. In fact, the high cost of gasoline is going to have negligible effect
on the RV Park industry
Let me first emphasize that I am talking
about the RV Park industry not the RV industry. Yes, I think that
the high price of gas will have a significant impact on RV sales. But I’m
talking about the RV Park business, those RV parks where you place your RV
overnight to sleep while you are on the road. It’s economics are much more
complex.
The first reason that the RV park
business will have little adverse reaction to high gasoline prices is the unique
type of customer who owns these things. Many of these RVs (in fact, a huge
number) cost over $100,000. Some cost up to $2,000,000. As a result, RV owners
are not as financially strapped as the average American. Sure, they cringe when
they fill up – but they fill up anyway. They have the disposable income to buy
gas at $4 a gallon, and $5 if it goes to that. I don’t know how high gas would
have to go to change their buying habits, but $4 is not it.
The second reason is that RV parks are
not about driving – they are about sitting. If you want to drive your RV less,
you just stay in the same RV park longer. It costs the same for a night of
lodging in any direction you travel, so why travel at all? Many RV users will
more than likely drive less distance, but stay on the road the same number of
nights.
The third reason is that RVs are often
used on special occasions –such as vacations – and those are times in which the
average owner is willing to consume more. If you have been planning a family
vacation for a year, it is unlikely that you will cancel it because gas just
went up 50 cents a gallon. You may complain, but you will keep on pumping.
The fourth reason is that many RV users
will cancel other, more costly travel options, such as foreign travel, and use
their RV more. Once you own the RV, it is a lot cheaper to take it down to some
destination than to book airfare, car rental, etc. at some more exotic locale.
The final reasons is that, even at $4 a
gallon, it is still financially attractive to travel in an owner’s RV rather
than the other travel options. If you were to drive an RV with 8 miles per
gallon fuel consumption from Missouri to Los Angeles, it would cost you $922 in
gasoline each way (1,845 miles). That sounds like a lot. But how much are four
tickets on American Airlines for this same roundtrip? About twice that amount.
And while you are driving, you get to see all the sights that many people love;
from national parks to tourist shops and the square in Santa Fe. You also have
to add on the price of the RV parks at night, which are about $30 per night,
compared to $200 a night in Los Angeles and Santa Fe. So as you can see, the RV,
despite $4 gas, is the clear winner as far as cost.
So before you condemn the RV park
industry as another victim of the gas crisis, think outside the box. The RV park
business is alive and kicking. And showing no signs of recession.
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