Editor's Note: The following story is excerpted from the February issue of Woodall's Campground Management. Later this week, www.woodallscm.com will report in further detail trends in the park model, cabin and yurt industry and provide comments from the nation's leading builders of these covered shelter products.
This year might be the year that the recreational park trailer industry snaps out of its multi-year slump.
At least that’s what the major manufacturers are hoping for and telling Woodall’s Campground Management (WCM) for its annual park model, cabins and yurts issue. And to what extent the nation’s campgrounds bolster their covered shelter inventory will go far in determining the success these OEMs experience in 2013.
The major campground chains, Kampgrounds of America Inc. (KOA) and Leisure Systems Inc. (LSI), each reported a hearty demand for covered shelter in their parks in 2012, which encouraged the park model OEMs as they begin to fill the pipeline for 2013. KOA said deluxe cabin rentals, a key point of emphasis right now, was up more than 20% in 2012 with registration revenues growing 19.5% higher than in 2011.
LSI reported that rental unit revenue rose 17% in 2012 from 2011. Double-digit growth has been recorded the past three years.
“Some people (parks) are not really taking advantage of this,” LSI President Robert Schutter said late in the year. “This is an area that we can exploit for many years. We have not maxed out.”
Builders are taking a variety of steps to grow their market share in both the campground and retail marketplace.
Industry leader Breckenridge, a division of Thor Industries Inc., the RV industry’s No. 1 manufacturer, is stepping up its production of rental units for the campground industry. The company, which captured more than 25% of the retail park model market in 2012, has taken many steps to broaden the appeal of its 12-wide Extendable and Perfect Cottage series, explained Bob Phillips, general manager of Nappanee, Ind.-based manufacturer, which is a preferred provider for KOA and LSI, two of its two largest customers.
“What we're trying to do is anchor the market we’re in,” said Phillips. “Breckenridge has always been a leader in the 12-wide market. I don't think we're going to venture much outside that.”
In its Extendable Series, the company has adopted a full fiberglass front cap and tried to make a lot of the former options now standard, he explained. Color schemes have been changed.
In the entry-level Fine Line Series, three new floorplans are geared more to families and first-time buyers and are more economical, he said.
A lot of former options are now standard in the Perfect Cottage series. New features include wholehouse vacuums and heavy-duty, pullout kitchen spray faucets and softened interior color schemes.
“A number of campground dealers should be excited about that product (model),” he said.
In the last three years, Breckenridge has become more serious about its campground rental units, Phillips said. He termed that market “a different beast” from the retail market and said the company has attempted to shore up this market.
Breckenridge also offers a rental unit it has “hardened” for the demands of campground users. “For a rental product, it’s very bullet-proof for a campground,” he said.
Phillips said Breckenridge is proud of its No. 1 position in retail registrations and welcomes the competition. He said those builders gaining market share with Breckenridge are doing so in the 8 ½-wide market.
“We want to make sure those nibbling don’t get too close. They have pushed us in what we do,” he said.
Forest River Inc., a Berkshire Hathaway company, the nation’s No. 2 RV builder and among the five largest park model makers, has done a total overhaul of its park model offerings for 2013 in its high line Quail Ridge and entry-level Summit product line.
The company has introduced four new floorplans so far and revamped its interior decors for these 12-wide models. Many formerly optional features are now standard on the Quail Ridge line and may be available on Summit products.
Interior doors are now stained to match the cabinets. New cabinet designs and styles, new kitchen backsplashes and hidden hinges for cabinets were introduced. Cabinets now have pulls instead of handles and ball-bearing glides. Kitchen cabinet and pantry shelves are now adjustable. Countertop choices were expanded. Pullout trash cans are now inside the pantries.
New window treatments feature hard valances and give a more upscale look. Accent furniture was updated.
On the outside, new vinyl siding colors were added. Shutters have been added to entry doors and loft windows.
“Competition was at the heart of the need to change,” said Gary Duncan, account manager for the Elkhart, Ind.-based manufacturer. “We weren’t gaining market share in recent years. These changes are recognition of competition and where the product needed to be. It was getting stale. Minor changes weren’t going to cut it; we really had to do something dramatic.”
The company also has upgraded its cabin-like park models, which it builds to customer specs. The basic model is a derivative of a KOA floorplan, which is tailored to meet the customer’s needs. Forest River made few changes in its cabin offerings, other than improving its interior paneling and upgrading its wooden cabinets. Cabins are available with vinyl, cedar lap or cedar log siding.
Lead times for Forest River products are about six weeks.
Cavco Industries Inc., a publicly held company, was keeping under wraps several soon-to-be-announced park model products that will be industry firsts.
“I think innovation is what has kept Cavco in the game,” said Tim Gage, national vice president of park models, cabins and specialty products for the Phoenix-based manufacturer.
As reported earlier by WCM, Elkhart, Ind.-based Skyline Corp., another publicly held company and in a solid third place in retail sales among park model builders, has opted to resume park model production at its manufactured housing plants in Wisconsin and Oregon based on the dealer response to Skyline’s park model display at the Louisville Show, said Mike Scheid, division general manager of Skyline’s plant in Leola, Pa.
The Shore Park is built in a manufactured housing plant and uses many of the components used in manufactured housing. For example, it’s one of a few manufacturers who use drywall inside their park models.
“We figured out a way to ship it without cracking,” he said.
He said his plant picked up eight to 10 new dealers at Louisville and business looks to be up 25% to 35% again this year. Canadian business also is growing, he added.
“We’re looking forward to gaining market share and upping our revenues,” he said.
Its plant location in Leola also helps keep freight costs down to customers in the Northeast, compared with the park model builders based in Northern Indiana, he said.
The Canterbury brand name has been in the industry since 1982 and today is manufactured by DNA Enterprises in Goshen, Ind. The company’s core product offering is 12-wide park models which come in three distinct price tiers, noted company spokesman Kevin Wells. The Bayview is the entry-level model, the full-featured Parkvue is for the upscale buyer and the Select is a custom-made product.
RVIA Smiling After Big Louisville Show
As WCM reported in its January issue, the Recreation Vehicle Industry Association (RVIA) came away from the 50th Annual National RV Trade Show held in Louisville, Ky., optimistic about the 10 park model manufacturers who exhibited 2013 product there.
For the first time, the builders were allowed to bid on space anywhere within the Kentucky Exposition Center.
Before 2012, the builders were limited to specific areas of the exhibition hall.
This was the first Louisville Show held since the Georgia-based Recreational Park Trailer Industry Association (RPTIA) was shelved and the bulk of its members invited to rejoin RVIA after a hiatus of more than a decade.
“The feeling was very positive. It goes to the whole notion they are part of the overall RVIA family again,” said Matt Wald, the RVIA’s recreational park trailer executive director. “Both psychologically and from the traffic flow, they felt it was a good deal for them.”
Other firms showing at Louisville were: Athens Park Homes/Champion, Breckenridge, Chariot Eagle, DNA Enterprises (Canterbury), Dutch Park Homes, Fairmont Homes, Kropf Industries Inc. and Woodland Park.
20 Park Model OEMs Join RVIA
On July 1, 2012, the RVIA created a new membership category for manufacturers of recreational park trailers, also known as park models. By year-end, 18 manufacturers, representing upward of 95% of annual park trailer production, had joined the RVIA, with two other applications pending inspection of their facilities.
“We had anticipated having 15 members; we have exceeded our expectations. Everybody is happy about that,” Wald said.
All but two of the new members were members of the RPTIA, which still exists, but in name only.
“A couple of OEMs are still not in the RVIA family, but we would love to have them aboard,” he said. “Some are waiting to see if this ‘marriage’ works before investing in it. We think it is a value proposition they can’t stay away from.”
A new page on the RVIA’s homepage at www.rvia.org pertains to recreational park trailers with a link to annual shipment figures and other information.
The industry is coming off a second straight year of little if any year-over-year growth, but Wald and others see a glimmer of hope in the future.
During the past year, Champion Homes purchased Athens Park Homes of Athens, Texas, and has begun to produce Athens Park product in Champion plants across the U.S., which Wald calls “a pretty significant entry into the park model side of the business.” This puts them in the same national markets with industry leaders Breckenridge and Cavco, Wald noted.
Aside from anecdotal evidence and monthly wholesale shipments, which RVIA tracks, Wald said major players told him following the Louisville Show their orders were solid. “With the economy turning the corner, it could be a good year in 2013. I would like to be cautiously optimistic and say I do not expect a drop-off in 2013. I’m expecting a ‘flat’ year but hoping for better,” he said.
Issues such as consumer confidence, the “fiscal cliff” and financing are beyond RVIA’s control, he noted, “but I think it’s fair to say this industry is solid and primed to grow, hopefully this year,” he said.