There was a great article written last year by Greg Gerber, the editor of the RV Daily Report. It is titled “Is the RV Industry in a Death Spiral?”. I was so impressed with the article because many of his points are things Tammy and I have discussed at length. So I wanted to briefly summarize some of his points and add a few of my own comments (Which will be in italics). His article is a collection of 8 editorials and is very long but well worth the read. I am only going to touch on a few of the major points; but I strongly recommend that you google the series and read it.
Greg believes the RV industry is in a death spiral with 20 years of viability remaining. This is based on a number of issues including that their current business model is unsustainable. This is primarily due to Poor Customer Service and Quality Issues. Add to that a lack of the RV Manufacturers to remedy issues for their customers complicated by the large number of RVs produced each year (Near 500,000 in 2016); and a lack of folks in the RV industry to support the influx of issues.
[Here’s the scary part, and one Tammy and I saw developing back around 2008; slowly two MFGs began to gobble up all the independent RV manufacturers due to the Recession. This resulted in 83% (according to Greg’s numbers) of the RV Market belonging to two Manufacturers. That seems very close to a monopoly to me. One needs to look no further in our history than to the car industry of the early 1970’s to see what that structure leads to. No competition resulted in poor quality and a horrible repair record].
While technology and construction techniques have improved over the years, the overall value and service has degraded. According to the RV industry there are 9 Million RV owners out there. However, there are only 289,852 RV Employees. This means the RV employees only make up 3.2% of the total RV population. How can 3.2% service the remaining 96.8% of RV owners? It sounds impossible to me.
As far as pricing is concerned the RV industry has created a mythical Price Point. This is the Price a buyer will pay for a new RV, but not a dollar more. Since the industry is committed to hitting that price point, quality has to take a back seat to the sales price. The fact that many new RV owners spend the first year in and out of the service bay vs. camping would seem to bear this fact out. One new RV owner quoted in Greg’s article had 101 items on his warranty list that needed to be addressed. [Tammy and I had well over 30 items on our punch list on our trailer we purchased in 2015]. It is getting smarter according to some online to just buy a used item because all the warranty issues have probably been resolved – you can just get on the road and camp.
In addition, with two MFGs now controlling most of the industry, they can get away with strong arming the dealerships. Dealers will have little recourse as they will risk losing their entire product line if they protest. The Dealers are in a very precarious situation, caught between trying to service their customers; and trying to keep their supplier happy at the same time.
Complicating the two manufacturing monopoly is the fact that the suppliers of RV parts has become just as restrictive with only a few major players. For example let look at Lippert Components (LCI). Lippert currently offers over 100 items to the RV trade. Since Lippert has the ability to bundle items together for the construction of RVs they essentially squeeze out the smaller companies. According to Greg (the author), if the RV manufacturers want to buy some of their parts from another source, Lippert ups the price for their bundle. Thus insuring the manufacturer buy exclusively from them (or pay the higher price).
On the RV Dealer side of the equation, there are too many Dealerships that focus primarily on the sales of new and used RVs. Most dealers are not investing in the service end of the business so they can repair the RVs they sell. This is why it takes weeks for RVs to get serviced. RV dealers have been complaining about not being able to find qualified service personnel since 2000. Now 16 years later, they still can’t find them.
Greg finds it baffling that the industry doesn’t have a permanent comprehensive online multi-faceted training program; in order to educate service personnel on every RV component. Adding to the problem of not being able to find good service personnel is the fact that the hourly pay rate for those positions is terrible.
[ Tammy and I had very simple punch list items that needed to be corrected under warranty on one of our Jayco’s, and yet to our dismay and frustration, our dealership had the unit for 8 weeks right out of the gate When we got the trailer back, the work that they did was substandard. It’s almost as if the litmus test for some of the RV mechanics is if they have ever used a screw driver or a hammer.
Add to the fact that travel trailers are rapidly becoming as hard to work on as cars; and it becomes almost impossible to repair anything yourself. When we had our 1971 Jayco JayWren, everything was easy to work on. Now with modern electronics and slide rooms, electric levelers, it’s just not the same world anymore. In addition I hate leaving my RV on the dealers lot. We have had out RVs damaged more than once just sitting in a repair facility.]
On the campground side of the equation there are several issues:
- An inability to lock into a campsite on the spur of the moment because campgrounds are shrinking not growing. Many campgrounds are converting campsites to cabins and park models in order to maximize cash flow.
- Many campgrounds are selling out to the Seasonal Campers leaving no sites for overnighters or weekend campers.
- Regulations are hampering new campground construction, requiring permits and EPA approval and the approval of the community that may frown upon what they see as “trailer trash”
- Rising rates at campgrounds. Not to mention extra charges for children etc…
- The lack of decent internet is a frustration and forces folks to use their cellular service for connectivity. In this day and age there is no excuse for this. [Saying you have free Wi-Fi has become a pretty much meaningless expression based on what we have seen, free – yes…good – no! Even their definition of Cable varies from campground to campground; it might be 75 channels, it might be 20. At one campground they advertised free cable but you had to get a cable box from the office and connect it to your TV, no thanks!]
- Dirty campgrounds send the wrong message and make your camping experience a bad one.
Greg’s article continues to talk about the RV association and their responsibility as well as what responsibility RV Buyers must have in correcting the situation. This is a must read article for any RV Owner or someone thinking about getting into the lifestyle.
Is the RV Industry in a Death Spiral?
There was a great article written last year by Greg Gerber, the editor of the RV Daily Report. It is titled “Is the RV Industry in a Death Spiral?”. I was so impressed with the article because many of his points are things Tammy and I have discussed at length. So I wanted to briefly summarize some of his points and add a few of my own comments (Which will be in italics). His article is a collection of 8 editorials and is very long but well worth the read. I am only going to touch on a few of the major points; but I strongly recommend that you google the series and read it.
Greg believes the RV industry is in a death spiral with 20 years of viability remaining. This is based on a number of issues including that their current business model is unsustainable. This is primarily due to Poor Customer Service and Quality Issues. Add to that a lack of the RV Manufacturers to remedy issues for their customers complicated by the large number of RVs produced each year (Near 500,000 in 2016); and a lack of folks in the RV industry to support the influx of issues.
[Here’s the scary part, and one Tammy and I saw developing back around 2008; slowly two MFGs began to gobble up all the independent RV manufacturers due to the Recession. This resulted in 83% (according to Greg’s numbers) of the RV Market belonging to two Manufacturers. That seems very close to a monopoly to me. One needs to look no further in our history than to the car industry of the early 1970’s to see what that structure leads to. No competition resulted in poor quality and a horrible repair record].
While technology and construction techniques have improved over the years, the overall value and service has degraded. According to the RV industry there are 9 Million RV owners out there. However, there are only 289,852 RV Employees. This means the RV employees only make up 3.2% of the total RV population. How can 3.2% service the remaining 96.8% of RV owners? It sounds impossible to me.
As far as pricing is concerned the RV industry has created a mythical Price Point. This is the Price a buyer will pay for a new RV, but not a dollar more. Since the industry is committed to hitting that price point, quality has to take a back seat to the sales price. The fact that many new RV owners spend the first year in and out of the service bay vs. camping would seem to bear this fact out. One new RV owner quoted in Greg’s article had 101 items on his warranty list that needed to be addressed. [Tammy and I had well over 30 items on our punch list on our trailer we purchased in 2015]. It is getting smarter according to some online to just buy a used item because all the warranty issues have probably been resolved – you can just get on the road and camp.
In addition, with two MFGs now controlling most of the industry, they can get away with strong arming the dealerships. Dealers will have little recourse as they will risk losing their entire product line if they protest. The Dealers are in a very precarious situation, caught between trying to service their customers; and trying to keep their supplier happy at the same time.
Complicating the two manufacturing monopoly is the fact that the suppliers of RV parts has become just as restrictive with only a few major players. For example let look at Lippert Components (LCI). Lippert currently offers over 100 items to the RV trade. Since Lippert has the ability to bundle items together for the construction of RVs they essentially squeeze out the smaller companies. According to Greg (the author), if the RV manufacturers want to buy some of their parts from another source, Lippert ups the price for their bundle. Thus insuring the manufacturer buy exclusively from them (or pay the higher price).
On the RV Dealer side of the equation, there are too many Dealerships that focus primarily on the sales of new and used RVs. Most dealers are not investing in the service end of the business so they can repair the RVs they sell. This is why it takes weeks for RVs to get serviced. RV dealers have been complaining about not being able to find qualified service personnel since 2000. Now 16 years later, they still can’t find them.
Greg finds it baffling that the industry doesn’t have a permanent comprehensive online multi-faceted training program; in order to educate service personnel on every RV component. Adding to the problem of not being able to find good service personnel is the fact that the hourly pay rate for those positions is terrible.
[ Tammy and I had very simple punch list items that needed to be corrected under warranty on one of our Jayco’s, and yet to our dismay and frustration, our dealership had the unit for 8 weeks right out of the gate When we got the trailer back, the work that they did was substandard. It’s almost as if the litmus test for some of the RV mechanics is if they have ever used a screw driver or a hammer.
Add to the fact that travel trailers are rapidly becoming as hard to work on as cars; and it becomes almost impossible to repair anything yourself. When we had our 1971 Jayco JayWren, everything was easy to work on. Now with modern electronics and slide rooms, electric levelers, it’s just not the same world anymore. In addition I hate leaving my RV on the dealers lot. We have had out RVs damaged more than once just sitting in a repair facility.]
On the campground side of the equation there are several issues:
Greg’s article continues to talk about the RV association and their responsibility as well as what responsibility RV Buyers must have in correcting the situation. This is a must read article for any RV Owner or someone thinking about getting into the lifestyle.
john.martini.patterson@gmail.com
May 6, 2017
Blog, Industry Commentary, Uncategorized
rv commentary, rv death spiral, rv industry, Travel Trailer, travel trailer blog, Travel Trailer Blogs, Travel Trailer Nation, travel trailer nation blog