RV Rental Market is Thriving

by Wendy on May 31, 2016

via RVBusiness.com

A recent study conducted by the Recreation Vehicle Rental Association (RVRA) to gauge profitability and trends in RV rentals revealed that the market appears solid, with a majority of dealerships that rent RVs reporting rising revenues as well as plans to expand their fleets, in addition to longer-term rental contracts.

“This segment of the market continues to be a winner for dealers. For the third year running the survey results underscore what many of us in the rental space already know,” said Scott Krenek, RVRA chairman and owner of Krenek RV SuperCenter in Coloma, Mich., said in a press release. “The RV rental market is healthy and growing. That’s why so many RVRA members are looking forward to a great summer. Renting RVs is not only profitable, it helps drive interest in the RV lifestyle.”

Fully 80% of rental operators surveyed reported higher revenues in 2015, with about half of those dealerships experiencing revenue increases above 20 percent. Sixteen percent of dealerships surveyed had increases of 50% or more.

Slightly more than half of respondents (55%) said they plan to increase their rental fleets this year, while 33% plan no changes. Twelve percent plan fleet reductions.

Sixty-three percent of survey respondents said their rental profit margins are adequate, with 37% reporting they are not. “Remaining profitable” also was listed as one of the biggest challenges to success in the RV rental business. “This survey is such a powerful tool for dealers because it identifies challenges we can work to address, from financing to insurance, by working with industry partners to clear the way for greater profits,” said Krenek.

Although dealers who respond to RVDA’s quarterly market surveys say adequate amounts of wholesale and retail financing are available, 23% of respondents to the RVRA rental survey say finding financing for their rental fleet is their biggest challenge.

The rental survey also showed that towable RV rentals are rapidly growing in popularity and 45% of respondents plan to include these units in their fleet, even exceeding

Class C motorhomes are the type of RVs rented by the big fleet/multi-location rental agencies for whom rentals are the primary business, and 40% of respondents plan to include Class Cs in their rental inventory this year.

Almost 80% of dealers that rent towables will deliver units to a campground or other location for the customer. And most are seeing an increase in customer requests for trailer deliveries.

Dealers also reported growth in the length of contracts over the prior year. Contracts spanning four to seven days accounted for 70% of rentals in 2015 versus three night contracts leading the way in 2014 at 50%. The breakdown of rental contracts last year averaged four to five nights for 35% of dealers, six to seven nights for another 35% of dealers, three nights for 25%, two nights for 4%, and more than seven nights for 2%.

In terms of the accommodations sought by consumers, RVs that can sleep at least four are the most popular models, according to 45% of respondents — up slightly from the prior year. Twenty-seven percent said RVs with at least six sleeping areas were the most popular with their customers, and 22% said at least two sleeping areas was good enough for their customers. Seven percent of respondents said their customers wanted units that could sleep seven or more.

All of the survey respondents have rental fleets of 70 or fewer units; about two-thirds of those have fleets of 10 or fewer units.

RVRA is a unit of the Recreation Vehicle Dealers Association (RVDA), and the survey was conducted through the RV Retailer Intelligence program, a service of the RV Assistance Corp. (RVAC), a wholly-owned subsidiary of RVDA. Learn more about RVRA on its website .


To read the original article, go to RVRA Survey Shows Rental Market is Thriving

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