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Park Trailer Industry Looks to Future

August 26, 2008 by   - () Leave a Comment

The recreational park trailer industry, a growing segment of the RV business since the gas price spikes of the 1970s, is poised to prosper as fuel costs continue to affect household budgets and environmental concerns drive vacationers away from other recreational vehicles, according to the South Bend (Ind.) Tribune.
Recreational park trailers, also known as park models, are perfect for the growing “destination camping” trend, with a broad market – retirees to young families, Canada to the Gulf Coast – who want to get away from it all without hauling it all with them, says Tim Howard, president and CEO of Breckenridge in Nappanee, Ind.
That gives the product a positive prospect in an RV industry otherwise troubled with the high cost of gas and drastic cuts in the sale of vehicles needed to tow some RVs.
“Destination camping is the future,” Howard says. “There could not be a brighter future for the park model.”
“I’m in the park model business because I lived through the embargo of ’73 and then again in ’79,” he says. “I shifted gears in 1980 and got into the park model business because I thought it was the most protected from gas surprises.
“When the bottom fell out, I didn’t ever want to be there again. It’s been a great ride.”
Howard worked for two other manufacturers before he started the Breckenridge Division of Damon Corp. in Nappanee in 1991 exclusively to produce the cottages. The business was bought by Thor Industries four years ago.
The ride has gotten bumpy in recent years, with a rocky economy battering the RV industry in general, and even the park models are not insulated despite their freedom from fuel costs.
But when the economy turns a corner, manufacturers say, park models will be there with heightened attraction for their environmental edge to welcome a growing market for stay-put vacation getaway shelters.
For the present, with factors such as tight credit and low consumer confidence as well as record gas prices at play in the economy, park models are still struggling along with the rest of the RV industry.
“What’s going on today isn’t just gas,” Howard says. “What we’re seeing today is broader. I don’t see any big-ticket item being protected in this. The park model business is just about on a par with what the rest of the industry is.”
Howard, whose long-growing company has retrenched to the size it was some seven years ago, sees retail registrations down 18% compared with last year. But dealers are cutting their inventories even more sharply – possibly setting up a vicious cycle where fewer homes for sale will lead to fewer orders.
“Dealers are not replacing their inventory at the rate they should be,” says Howard, who works with 260 dealers in North America.
Micki Lee, owner and vice president of Lee Enterprises Manufacturing Co. Inc. in Elkhart, says business in the United States has been slow, but the market in Canada has helped the company through the season.
“We’re not as vulnerable to the fuel prices as motorhomes or travel trailers or fifth-wheels are,” says Curt Yoder, who owns Kropf Industries in Goshen with his brother-in-law, Don Kropf.
“If the economy’s bad, it’s bad. A lot of us are smaller scale. Our business has remained fairly steady.”
Builders See Long-Term Hope
But the manufacturers in Elkhart County, where about one-third of the niche product is built, see long-term hope in an expanding demographic for the more environmentally friendly cottages that catch the wave of a “destination camping” trend.
“A good market for these is any retirement community,” Yoder says. “However, park trailers are becoming more of an option for other campers, too,” such as young families leaving the city for a long weekend.
“A lot of the parks are catering to that kind of camper. That concept is becoming more and more popular. The market is expanding. There’s a lot of areas out there where park trailers are still in their infancy.”
Lee says she’s seen the business spread across demographics and geography in her company’s 24 years.
“There’s two age groups,” Lee says. “One is an older group. The other is the family that wants a getaway from the big city. The families get a weekend or a four-day weekend or take their vacation there.
“There’s probably a 50-50 mix between the elderly in retirement and families wanting to get away from the big city. When we started, most of the business was in south Texas and Arizona and the retirement states.”
Now, park models are parked in Wisconsin, Minnesota, Washington State, New England, Virginia, Georgia, the Carolinas and Canada.
Howard Led Market Evolution
Howard was a leader in the large marketing effort nearly 30 years ago to move the park model beyond its retirement roots in Texas, Florida and Arizona. Campaigns with RV dealers, campground developers and others increased business in rural areas near northern population centers such as Chicago and Detroit.
“It was almost exclusively snowbird business,” he recalls. “I realized pretty quickly that these make wonderful cottages for consumers in general. The business grew, and it became a Northern business.”
Federal regulations require that the structures are no larger than 400 square feet to qualify as an RV, but manufacturers have learned to back comfort and charm into the space, tailoring each product to the buyer’s desires.
“It started out looking more like a travel trailer,” Lee says. “Now it looks like a modular home. It looked nicer for somebody to stay in for that period of time. It had more room in it, more storage capacity. They’re fully heated and air conditioned.
“We build them to order. Everybody gets to build what they want.”
“They’ve got all the comforts of home – appliances, furniture,” Yoder says. “It’s definitely not roughing it. There’s all kinds of options.”
Customizing has helped increase the average price of the homes from $22,000 to $25,000 to about $40,000 in the last 15 years, Howard says. Homes can range from $30,000 to $70,000.
“The families decide that’s still cheaper than buying a big truck to pull a travel trailer and pulling it back and forth,” Lee says. “You leave your stuff there – towels, sheets, pots and pans. Put a few groceries in a bag, and you’re ready for the weekend.”
The structures can have a long, stone, beach house or traditional appearance, with a wide range of detail selections for buyers.
“It’s almost a romantic thing,” Howard says. “It’s their idea of a perfect cottage.”

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