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Californians Respond to Higher Fuel Costs

July 22, 2008 by   - () Leave a Comment

For some recreational vehicle enthusiasts in California’s North County, the freedom to spend a week or a summer moving from plateau to beach to canyon still feels priceless, even when it requires $2,000 in gasoline.
Others said the pump prices have helped them develop new appreciation for memorable vacations much closer to home. Rick and Barbara Waller, for example, scratched plans for a 2,000-mile trip in their recreational vehicle through Oregon as gasoline prices soared past $4 a gallon. Instead, they plan to embark next week for Kings Canyon National Park, about 300 miles away, according to the North County Times, Escondido, Calif.
Last week, they parked their RV for several days at South Carlsbad State Beach. Less than 20 miles from their home in Escondido, the site was close enough for their college-aged children to pop in and out, they said one afternoon during a visit from their daughter Amanda.
Like most owners and dealers of recreational vehicles interviewed for this article, the Wallers said the higher fuel costs hadn’t tempted them to get rid of their RV. That would require prices of $8 or more a gallon, Barbara Waller said.
Besides, she added ruefully from her lawn chair, “Nobody would buy it.”
Gas falling from record $4.60 a gallon
Regular gasoline fell to an average $4.43 a gallon in North County on July 17 and continued its retreat this week from a record $4.60 on June 19, according to weekly surveys by the Utility Consumers’ Action Network. Diesel fuel, which powers many motorhomes and the pickup trucks that pull camping trailers, remains near a record-high $5.11 set May 29, according to the consumer group.
The record highs have prompted Californians to cut back on gasoline use to an extent not seen in more than a decade. A state agency recently reported that 15.7 billion gallons of gas were pumped in California from April 2007 to March 2008, down 0.9% from the prior 12-month period, after years of 1% to 3% increases.
It isn’t clear how badly gasoline prices are hurting the market for used RVs, but the market for new vehicles has veered right off a cliff. The Recreation Vehicle Industry Association (RVIA) reported nationwide sales of 17,700 motorhomes in the year to May 31, down 28% from the first five months of 2007. Sales of towable travel trailers fell 11% to 121,300 in the same period.
California dealers reported sales of new recreational vehicles down 34% in the first three months of the year in dollar terms, according to Lloyd de Llamas, a consultant who analyzes sales-tax data from nearly every city in California. California is the nation’s No. 1 market for RVs.
A generally weak economy, shrinking home equity and skittish lenders are to blame, dealers and analysts said.
“That’s going to have somewhat of an impact, but I think credit and the inability to take out equity have as much to do with it as the gas prices,” de Llamas said.
Several years ago, de Llamas said, he analyzed 12 years of data from the city of Colton and concluded that gasoline prices played no role at all, though prices this time around have risen higher and faster than ever before.
The sales slowdown has hit Southern California’s RV manufacturers particularly hard. National RV, of Perris, sent most of its 600 employees home in December after several years of red ink. Shares of Fleetwood Enterprises fell to a 26-year low of $1.99 on July 7, a few days after the Riverside company reported quarterly sales from RVs falling 31% from a year ago.
For would-be buyers in California, shrinking home equity and a weaker economy may be especially salient factors. The state’s unemployment rate rose to 6.9% last month, compared with the nation’s 5.5% rate.
Whatever is happening with sales, crowds are thinner this year at All Seasons RV Resort, eight miles north of Escondido, manager Judy Young said. That’s mainly because of a drop-off in visitors from out of state, Young said.
“They just don’t have the money,” Young said. “The gas prices are too high.”
In-staters pick up the slack
In-state travelers have helped to make up for that, but they tend to stay for just two or three nights, compared with stays of five to seven nights common for out-of-staters, Young said. Most visitors this summer live less than 50 miles away, with a fair number from Escondido, she said.
The slowdown in summer travel has dented sales of coffee and groceries on site, she said.
It’s doubly painful because the site also is getting fewer long-term guests, Young said. Those include electricians and other seasonal and temporary workers in construction trades, which led off the economic downturn in 2006, Young said.
Nationally, RV campgrounds have seen the number of visitors increase by 5% or so, the industry association reported, citing conversations with representatives of a large online booking company and Kampgrounds of America, franchisor of 450 campgrounds in the United States and Canada. Gasoline prices also increase the cost of a car or airplane vacation, and a week in an RV is cheaper than either because campers eat in restaurants less often and because campgrounds cost less per night than most motels, association spokesman Kevin Broom said.
RVers in North County echoed that logic in interviews last week. Heather Singh, who stayed at All Seasons with her husband, Surbjit, and their three children, said the family had continued to take their motor home to off-roading centers and state beaches for a three-day weekend each month.
“It really hasn’t changed our mindset at all,” she said of the higher fuel cost. “Instead of going out to dinner, we spend it on gas instead.”

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