The COVID-19 pandemic, without a doubt, has been a challenging time for businesses worldwide. However, some industries still show impressive economic performance. Among others, the RV market has experienced a huge increase in demand.
However, as with most things in life, this surge is only temporary. And so, many people are wondering, when will the RV bubble burst? Based on recent sales data, the RV bubble has already burst, especially compared to last year’s statistics.
Keep on reading to learn more about the RV market crash, and, more importantly, what it means to the industry. Manufacturers and customers will both feel the impact of this economic downturn.
The Current State of the RV Market
A comprehensive RV market analysis would reveal one thing—RV sales slowing down. The numbers don’t lie, and they provide an indication of where the industry is heading in general.
For context, let’s talk about the RV market performance in the past years. According to the RV Industry Association, from 2009 to 2017, the RV market was booming, as proven by the rising shipment numbers—from 165,709 to 504,599.
Although shipments declined from 2018 until 2020, the pandemic saw the revival of RV productions, partly due to the need for social distancing. As such, RV shipments reached an all-time high in 2021, with 600,240 completed orders in total.
Today, however, there’s a clear RV sales decline. In 2022, total shipments dropped to 493,268. And if you think this is bad, you’ll be surprised to learn that this figure has declined to 185,350, which is a -47.7 % decrease from last year.
Despite the RV sales falling, industry experts are confident that they will bounce back. For instance, one survey revealed that up to 26% of the participants revealed their interest in purchasing an RV next year.
Evaluating the RV Bubble Burst
As shown from the statistics above, the RV bubble has burst, even if many people are optimistic about the end of the decline soon and the market recovery to follow. In fact, RV wholesale in July is the second-lowest in 2023 thus far, with only 20,520 shipments—a 30.5% decrease from July 2022.
If there’s no improvement in the market, the total RV shipment of 2023 by the end of the year may only reach 391,499. Even for the positive few, wholesale projections hover around the 487,300 benchmark, which is still lower than last year’s.
1. Factors contributing to the RV Bubble burst
Below, we’ll look at some of the things that have contributed to the burst.
Almost everything is affected by the rising prices globally. Even when demand was high, the slow production contributed to the increasing prices. This could deter many people from buying, although this can also positively contribute to the used RV market.
2. Rising Interest Rates
It’s not just the prices of goods and services that are increasing but also interest rates. This can contribute to the difficulty of financing an RV recently, which we can also assume is another culprit for the bubble’s bursting.
Market saturation is another factor that has contributed to the bubble burst. There was even a time when some RV makers doubled their production compared to their previous supply. Hence, they found it hard to keep up with the demand.
4. Higher Gas Price
Gas price has increased drastically in recent years, reaching an all-time high in July 2022. As such, traveling around on RVs would cost a lot more money—a factor that can clearly put off potential buyers.
5. Higher Campground Cost
Ever since 2022, campground costs have increased noticeably, particularly in the Northeast. Even just for one night, private campgrounds can charge you over a hundred dollars—more than enough for you to book a comfortable hotel.
6. The pandemic has ended
With the release of the vaccine and the re-opening of all 50 states, people have returned to office. And since people can no longer work from wherever they like, it’s understandable that RVs are off the table.
2. Signs that the RV Bubble has burst
1. Aging Supply
There was once a high demand, but as discussed above, such is already declining. It’s not uncommon to find dealers with up to 50% unsold inventory. And with more models coming in the next year, it will be more difficult to sell the older ones still in stock.
With this, many are also wondering, will RV prices go down? Yes, it’s possible. Many people paid a premium for their RVs during the pandemic, but with the lowered demand, we might see RV prices drop.
2. Demand and Shipment Decline
This is one thing we already discussed earlier, and one of the most obvious indications that the bubble has burst. With fewer customers making discretionary purposes, there is a decrease in demand, and, consequently, a decrease in shipment.
These changes, however, are also positively tied to RV price trends. With RV sales slowing down, some dealers may slash their prices, which is a way to attract more buyers.
If you’re still asking when will the RV bubble burst, we have news for you—it already has! For some, especially for manufacturers, this can be a bad thing. However, for buyers, this could be a good thing as it translates into lower prices, making RVs more affordable.
“Hi, I’m Francis’ husband—Calvin. Our story began with our shared passion for traveling. I have had a career journey for over 11 years at Ford Motor Company, where I took on the role of BMS SW Process Engineer.
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That’s why I am also a member of FMCA and have been a panelist on seminars at shows like FMCA’s 103rd International Convention & RV Expo in Gillette, WY, where I can showcase my adaptability and expertise.
Like my wife, I hope to help you see the beauty of traveling off the beaten path by sharing insights into this lifestyle. In addition to my corporate roles, I also launched our website – Outdoorbits, in 2015 and continue to contribute my knowledge and skills to the present day. And I’ll be completely honest with you—no hiding the truth or sugarcoating the possible challenges.
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