I can’t even guess what the fall may look like for our travel plans much less the future of the RV industry. That won’t stop me from making a few observations. We’ll see if they hold up.
Observation 1: Make peace with the snow
I received a statement from my national political party this morning to inform me that they were cancelling their policy convention in November. It reads, in part:
Finally, and very importantly, we are unable to predict what sort of travel and gathering restrictions could still be in place by November 2020 for conventions of our size that typically attract thousands of delegates and other guests, so choosing to postpone now rather than pushing the decision later ensures minimum impact for our members and the party.
I suspect that travel restrictions will be in place for some time for all of us. Certainly between Canada and the United States.
The Oxford dictionary definition of a snowbird:
a northerner who moves to a warmer southern state in the winter
We may not be a snowbird this fall. And that means making peace with snow.
Our golden retriever won’t have any issues adjusting to this new reality. I will. I am not a big fan of frigid temperatures and snow.
COVID-19 has dramatically impacted Canadian snowbirds and others that travel in an RV. That alone will affect the RV industry.
Observation 2: No quick recovery
The financial impact on our economy has been shocking.
“In a war, the economy booms as production ramps out. This war is against an invisible enemy that destroys jobs, incomes and output.” — David Rosenberg, chief economist and strategist of Rosenberg Research & Associates
The analysts I follow all agree on the following prediction about the future: no one knows.
No one knows how deep the economic impact will be, how long we will spend at the trough or how quickly we can recover. Despite the adoption of stimulus packages for individuals and businesses by the federal government totaling more than $200 billion, the stock market continues to plummet, and the first quarter of 2020 now represents the worst quarter for the S&P/TSX Composite index since the economic crisis of 2008. The prospect of a recession is real.
While there is no way to tell exactly what the economic damage from the global COVID-19 novel coronavirus pandemic will be, there is widespread agreement among economists that it will have severe negative impacts on the global economy.
Consumers, people like you and me, generally view health as a higher priority than finances right now. That will change.
For most households in North America, finances have been devastated. Consumers will have little choice but to reduce spend. More than one-third of the Canadian workforce has applied for the Canada Emergency Response Benefit. Most Canadian households could not last even a few weeks before running out of money.
Spending will contract. Those households that have a more solid financial footing will undoubtedly be more concerned about how they spend and save. Government restrictions on behaviour and where people can drive and enjoy the outdoors will combine to ensure no quick recovery for the RV industry.
Observation 3: Time for some to bail out of the RV lifestyle
Millennials and Boomers are the key demographics for the RV industry. These groups are the hardest hit by the economic impact of COVID-19. If consumers decide to purchase in this market, they will shift to buying used over new. For those that leveraged their RV and find themselves in a difficult financial position, they will sell their RVs. I have already seen a sharp increase in the number of posts on social media with people selling motorcoaches and RV sites.
RV manufacturers may not be selling quite as many million dollar coaches over the next few years. They will face pressure to produce less expensive RVs. Ownership parks and individuals that own sites will face a buyer’s market, assuming that there are buyers out there.
Observation 4: Space, the final frontier
Fewer lots, more spread out. The opposite of the trends that we have seen in many RV parks. The days of cramming RVs shoulder to shoulder are over. I do not see any government allowing parks to open without a focus on social distancing guidelines.
Observation 5: Show me the money
Will banks continue to shower consumers with cheap loans on expensive RVs? I expect a hardening of credit especially for people that had to request debt forbearance. RV dealers may also face challenges managing their financial arrangements with inventory.
It could take years for household finances to stabilize. A large part of the growth in the RV industry has been fuelled by debt.
That will change.
Observation 6: Uncertainty
Governments, industries and consumers will have to grapple with the challenge of acceptable infection and death rates against resumption of traditional social and business activities. My sense is that no one really knows what to do with COVID-19 and we are all captive to a range of experiments from shutting down the economy to restricting civil liberties.
If you are uncertain about your future, you tend to stay home, to seek a safe harbour. Even if you are inherently adventurous. All forms of travel are likely to be avoided for some time.