Re: King of the Road?

Very interesting trend. I wouldn't have considered the industry moving toward towable rentals ,but in light of the articles information, it makes sense.

Re: King of the Road?

As a rental Rv dealer, we have also switched our inventory to towables by over 45%. Look at the math. $ 12,000 trailer rents for $109 a day, $ 50,000 Class C rents for $175 - $ 200 a day plus higher insurance fees than a trailer. The motorhome depreciates greater, has more items to maintain, and generally sells for less percentage when sold than a trailer. An addition there is also a larger market in these economic times fior used trailers than used rental RV's. Cash flow is king in these economic times. We can now have more rental units at the same cost than before when we had more motorhomes than trailers. Greater total rent gross with less costs.

Re: King of the Road?

That is very interesting. However other sources show a decrease in towable rental profits.

Thor Industries July 3, 2007 Quarterly Report:

TOWABLE RECREATION VEHICLES

The decrease in towables net sales of 13.0% resulted primarily from reduced unit sales, primarily hurricane relief units. We estimate that in the nine months ended April 30, 2006 approximately $122,258, or 7.6%, of towable net sales were related to hurricane relief units sold through our dealer network. There have been no sales of hurricane relief units in fiscal 2007. Excluding the effect of hurricane relief units, towables net sales for the nine months ended April 30, 2007 decreased 5.8% compared to the prior year period. The overall market unit decrease in towables for August 2006 through March 2007 was 18.1% according to statistics published by the Recreation Vehicle Industry Association. Increases in the average price per unit resulted from product mix and no hurricane unit sales in fiscal 2007. Hurricane unit pricing in fiscal 2006 was substantially lower than the average price per unit of other towables.
Towables gross profit percentage decreased to 13.7% of net sales for the nine months ended April 30, 2007, from 16.4% of net sales for the nine months ended April 30, 2006. The primary factor for the decrease in gross profit percentage was the 13.0% decrease in net sales and increased discounts and allowances due . . .

Hard to tell if blog article rings true....

Re: King of the Road?

I agree with Tom's math on the switch to an increased amount of travel trailers from motorhomes. But, what I also see happening, is that the consumer is renting the travel trailer based on the gas mileage issue...what they don't see (no matter what you might tell them) is that when you hook-up a 5,500 lb. 30' travel trailer behind their turck or SUV, guess what...they'll end-up with just about the same mileage as with the same size Class C motorhome.

Travel trailers are renting because: the consumer can rent them cheaper; and they think they will get a lot better gas mileage towing the trailer vs. driving a motorhome.
And, a lot of my travel trailer rental customers are returning saying that they will consider taking a motorhome on their next trip as they did not save as much on gas as they thought they would.

If a RV rental company is not contacting every insurance company, agent and/or claims adjustor within their market place...then they are missing a very vital potential client. My best customers come from this area.

Re: King of the Road?

The problem with trailers is the rentals are short. I find my trailer rentals are typically only for weekends, 2 to 3 days. Trailers are also more labor intensive to rent. We don't install hitches so there is no extra income there. We often have to turn customers away because their vehicles don't have the capacity to tow the trailers which are fairly heavy and need things like sway bars and electric brakes. This narrows the market a lot.

My motorhomes typically rent for a week or more. They do cost more to own and to operate but have twice the use and higher prices. I think the math shows a motorhome is the better bet.