RV Sales Accelerate in May and June as Americans Explore Safe Summer Travel Options

How is it possible to follow social distancing and shelter-at-home advisories without canceling summer vacation plans? The answer for an increasing number of Americans is to drive to outdoor destinations with their homes in tow.

Our Beacon report on 2Q 2020 sales of motorcycles and recreational vehicles (RV) reveals that sales of towable RV trailers and off-road vehicles (ORV) rose. However, motorcycles continue to sit idle in dealers’ showrooms. 

RV and ORV retailers benefited from several factors, such as the arrival of warmer weather and people making beelines to national parks. Tens of thousands of people have visited Yellowstone National Park since it began a phased reopening on May 18th. Weekend visitation at the popular Cades Cove section of Tennessee’s Great Smoky Mountains National Park in May was 54% higher than last year. 

Sales of towable RV trailers improved dramatically in May and June, driving 2Q performance up +7% Y/Y.

Winnebago (WGO) gained market share, accounting for 13% of the new towable market. Winnebago’s gains appear to have come at the expense of Thor (THO) – its sales were down -2% Y/Y in the 2Q 2020.

Off-road vehicle demand is also trending positively. In 2Q20, indexed units of Polaris (PII) ORV/Snowmobiles increased +36% Y/Y. We project Polaris North America retail sales to be up +32% Y/Y for 2Q20 based on raw unit volume-weighted +36% Y/Y growth for ORV.

But the popularity of Polaris’ ORVs did not extend to its motorcycles, including the Slingshot and Indian brands. Polaris motorcycle sales are tracking down -39%, reflecting a category-wide trend.

We expect these trends to continue in Q3. However, the recent surge in coronavirus infections in many states raises a red flag for the RV industry. Governors have re-imposed stay-at-home restrictions, and many national parks, such as Big Bend National Park in Texas, are also partially or fully closed (again). Meanwhile, residents who want to travel to states that have lowered infection rates like New York and Rhode Island face the discouraging prospect of spending a week or two under quarantine.

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