The COVID-19 pandemic has severely impacted businesses and industries in many unexpected ways. Restrictions on mobility has made it difficult to proceed with business as usual, forcing many companies to shift to a remote work setup. Apart from business owners, consumers have also faced major disruptions in their daily lives, thus causing their preferences and lifestyles to change.

The shifts in consumer demands and adjustments forced by the pandemic have disrupted all industries, without any being an exception. With that said, different industries faced different impacts, with some being hit negatively and others showing a surprisingly positive outcome. The travel, hospitality, and entertainment industries are some of the hardest-hit segments, especially since people are more cautious about face-to-face contact and being in crowded places.

One of the more interesting cases observed in the market can be related to how vehicles fared in the pandemic. While stay-at-home orders and social distancing requirements have limited people’s time outdoors, it has also prompted them to make certain lifestyle changes. Take a look at how the recreational vehicle (RV) industry performed in 2020, along with the market outlooks for 2021 in this yearend review.

RV Sales Up Due to Air Travel Restrictions

In the midst of the coronavirus pandemic, the RV industry has unexpectedly skyrocketed. It has boomed so much that the market registered record sales in the past few months, with first-time buyers dominating most of the sales. Now, the big question is why? With lockdown measures and quarantine restrictions, the expectation was that RVs would not be in demand as many are staying at home.

While people are generally still cautious about leaving their homes, they have also been looking for ways to destress and move around without having to travel by air. The many months of lockdown have deprived people of their vacations. As such, many have turned to and found solace in RVs, which can be used for road trips and camping trips.

Back in June this year, the total number of RV shipments reached a record-breaking high since October 2018, with over 40,000 RVs shipped out in the month. Earlier in April, the RV Industry Association noted an 82% decrease in sales from last year, likely caused by the intensive lockdowns implemented at that time. In May, the prospects improved but sales were still down by 30%.

Surprisingly, demand started to spike in spring and summer of 2020, shown by the turnaround in June. People were looking for alternative ways to spend their vacations.. Since many were still apprehensive about flying or staying in a hotel, an RV helps solve this problem by providing them with transportation and lodging in one. With an RV, people can go on outdoor trips while still staying in their own place, effectively solving the common concern that they have today.

Another reason why RVs have been so in-demand has to do with businesses reopening and transitioning into the new normal. While many have started to resume operations, strict safety guidelines are still put in place. As such, maintaining a controlled environment in company trips has become a top priority, and RVs can help companies achieve this.

Pandemic Encourages First-Time RV Buyers

According to RV dealers, as much as 50% to 80% of the buyers fueling the boost in sales are first-time buyers. A year ago, the number was only at 25% to 35%, showing how the pandemic has largely influenced customers’ purchase decisions. Unexpectedly, it has pushed more new customers to venture into the world of RVs.

The spike in first-time RV buyers can be seen in Thor Industries’ performance in the latest fiscal year, which ended in July. The company reported a backlog of orders amounting to $5.74 billion, a sharp increase compared to $2 billion last year. This backlog is particularly attributed to a large number of younger enthusiasts who are drawn to the idea of an RV, especially during these times.

According to industry experts, the increase in sales is not just pent-up demand. Rather, there was likely a huge market of new buyers that were interested in purchasing RVs long before. However, it was only during the pandemic that they were pushed to get one as they wanted to travel with less risks.

Supply Challenges Caused by Unprecedented Increase in Demand

With shipments reaching an all-time high this year, the industry has struggled to keep up with the rising demand. The unexpected turn of events has led dealers to struggle with shortages in their inventory. The supply chain challenges were mostly caused by the many RV manufacturers that had to close down in the early phases of the pandemic. During this time, factories had to shut down and dealerships had to sell off all their existing inventory.

Given the current situation, the biggest challenge faced by dealers is scarcity in parts and shortages in inventory. While sales and demand are undeniably high, customers are unable to meet all the demands. Due to supply chain disruptions and limited working hours caused by the pandemic, manufacturers are unable to produce parts as quickly as before. This problem has resulted in a significant backlog of sales, with companies selling models before they are even completed.

Back in September, the shortage was so severe that customers who ordered in the month would have to wait until October or November before receiving their RV. As such, many people are now trying to order as early as possible to ensure they can get their vehicle in time for their trips.

New RVs Accommodating Remote Work Needs

Dealers have recognized the rising demand for the vehicle as an opportunity to innovate it and address more needs for consumers. Originally, RVs have been effective in helping travellers relive the excitement of going outdoors without flying on a plane or booking a hotel. However, RV manufacturers are starting to see that the vehicle can do so much more, particularly with remote work.

New RVs are working towards responding to shifting customer priorities by designing models that cater to remote work demands. With many people now working from home, personal and rented vehicles have become the go-to choice for travel plans. As such, customers are now seeking more infrastructure within their RVs. Features like internet connectivity and adequate working space are particularly important as these can help people stay productive with their remote work.

One RV company noted that about 30% to 40% of customers are sending inquiries about their vans’ mobile office features. Most of the first-time buyers are particularly interested in how their RVs can support remote work capabilities to cater to their flexible lifestyles. Dealers have started to see the potential in this growing segment, especially with the uncertainties about returning to face-to-face work.

Due to the success of making more innovative RV models, manufacturers are now working on digitally optimizing vans to create a more ideal remote workspace. Aside from internet connection, better soundproofing and ergonomic seating options are only some of the features being incorporated into RVs for people working from home. Given the limited space dimensions in an RV, manufacturers will have to be strategic about fitting all the necessary amenities inside the vehicle.

RV Rentals Exceeded Expectations in the Pandemic

In line with the increased demand for RVs, RV rentals have also shown to be extremely profitable during the pandemic. About 75% of RV owners generated more rental income this year than last year, showing just how popular these vans have become in the past few months. Evidently, travel is an innate part of many people’s lifestyles, so even with social distancing requirements, people are looking for creative ways to hit the road.

During this time of uncertainty, RVs provided individuals and families with a safe way to enjoy a socially distanced vacation. According to RVshare, a platform where users can rent RVs, rental traffic has increased by 1600% since April and 93% of its users reported their plans to spend their summer vacation in a smaller crowd.

Fortunately, the RV rental process is extremely easy and convenient. To make it better, the entire process can be done online, so customers need not worry about face-to-face contact. With platforms like RVshare, they can choose where to pick up the RV, how long they will rent it for, and how many people must fit inside. Other options also include how luxurious they want the vehicle to be, as well as customizations like having a pet-friendly van.

With RV demands on the rise, rentals are expected to grow even further over time. Thus, purchasing an RV comes with tons of appeals and benefits for customers. It can be used as a vacation vehicle to practice social distancing, a mobile van to travel while still working from home, or an investment vehicle to rent out when not in use.

Trends Shaping the RV Industry in 2021

Another question that looms is: What will happen to the RV industry in 2021? Will the unexpected boom in sales this year be sustained further, and what can dealers expect with the market moving forward? These are some of the top trends expected to shape the market outlook for next year as 2020 comes to a close.

1. Tiny Homes

Now, more than ever, the tiny home trend has grown more significantly as it is more cost-effective. For some, the idea of a mobile home has also been particularly appealing, which has led to the concept of an RV as a permanent home. That said, RVs as a home will have to feature a more “homey” design that resembles the stability of a regular home to address the emotional and sentimental needs.

2. Smaller RVs

Smaller RVs are on the rise as they are more environmentally-friendly and affordable, allowing people to have more money to spend on food and travel experiences. The trend for smaller vehicles is expected to grow further, now that consumers are becoming more cautious of their expenses but still want to have vacation arrangements from time to time.

3. Family-Friendly Spaces

While RVs are generally equipped to house many people for camping trips and other similar adventures, not all can accommodate as many guests. However, with the social isolation caused by the pandemic, people are starting to invite their friends and family more often. As such, family-friendly RV spaces that can house multiple people is expected to become even more popular in the coming year.

4. Unique Floor Plans

RVs today have gone a long way from the traditional units, so you can expect more unique floor plans to dominate even further. Should you decide to shop for an RV this year or next, you may be surprised to see how the floor plans have transformed. RV designers have worked towards making the vans even more accommodating to consumers’ needs, thus seeking for better ways to maximize the space inside.

5. Innovative Technology

Technology continues to advance over time, and with the RV industry, such is no exception. Nowadays, manufacturers and designers are incorporating various technologies in their vehicles to give customers a better experience. Some innovations include smarter work stations, dual battery charging systems, and automation functions. Fortunately, customers have responded positively to these improvements, with many embracing the technologies infused into RVs today.

6. Increased Competition

More competition is expected to ensue in the RV industry, especially with more people going on socially distanced vacations and living in tiny homes. While the industry offers relatively low threats and barriers to entry, many large companies are now utilizing more innovations. As such, new entrants will have to prepare for intensifying competition.2020 has seen several transformations in the RV industry, and it is expected to innovate even further as the year comes to a close. In today’s technological age, RVs have evolved into so much more than being vacation vans as they now come in various sizes, designs, and features.

Without a doubt, the RV industry is one of the few that have seen an unexpected turn of events. While sales may have decreased in the earlier part of the year, things took a drastic turn in spring and summer when demand suddenly spiked. In the midst of the pandemic where social distancing has become a new normal, people have found that RVs can help them proceed with their vacation plans.