RVIA Makes Tough Call on Seal Fees
Raising fees, like raising taxes, is hardly a way to win a popularity contest these days, so perhaps it’s no surprise that the decision by the RV Industry Association Board of Directors to temporarily raise the seal fees it assesses on new RVs from just over $4 per unit to $35 per unit has met with somewhat mixed reactions within the RV industry.
Whether you approve of the board’s decision or not, it’s important to understand the circumstances in which they reached their decision. RVIA receives the bulk of its revenues from exhibit space its sells at the two shows it produces each year – the California RV Show in Pomona, Calif. and the RV Industry Association Trade Show in Louisville, Ky. Unfortunately, because of the tough economy and the adverse impact it has had on manufacturers and suppliers, exhibit space sales at the trade show are currently off by about 35 percent, while sales for the California consumer show are off by a staggering 65 percent. The result is that RVIA’s revenues have dropped dramatically.
Two points bear mentioning here. First, even with the increase in the seal fee, the association’s revenues will still be down; they just won’t be down as much as they would be without the increase. Second, the seal fee increase is temporary: it took effect July 1 and lasts through Sept. 30, 2010.
Some might ask, couldn’t RVIA have cut its budget or drawn upon its reserves rather than raising fees? Those are fair questions.
For their part, association representatives note that they have already been drawing down its reserves for the past two fiscal years to address serious issues as they’ve arisen. For example, RVIA spent about $1 million in 2008 to combat lawsuits and negative publicity related to supposedly excessive formaldehyde levels in trailers that RV manufacturers built to provide shelter to victims of Hurricane Katrina. Meanwhile, in 2009 RVIA expects to spend about that much again from reserves to address a host of pending legislative issues.
While RVIA’s reserves are not at risk of being exhausted anytime soon, it’s too soon to say with any certainty when the economy will recover and the association’s income levels will return to normal levels. In the meantime, RVIA officials make a compelling case that the association needs to have sufficient reserves to deal with whatever issues might happen to arise.
As to cutting RVIA’s budget, it’s worth noting that RVIA has already cut its staff by about 25 percent and slashed its budget twice in the past several months in response to the decline in association revenues. RVIA President Richard Coon has argued persuasively that further cuts risked harming the association’s mission of protecting and promoting the industry.
After all, RVIA is in the midst of representing the industry’s interest in several legislative issues, such as CAFÉ (fuel economy), federal stimulus package initiatives and numerous state legislative issues. In addition, RVIA is responsible for setting industry standards, it is involved in industry training issues and it is a primary sponsor of the Go RVing Campaign, which continues to do the vital work of promoting the RV lifestyle and in the process bringing new customers to the industry.
Now more than ever it’s imperative that the association has the resources it needs to speak out on behalf the industry; hopefully with this increase in seal fees it can do just that.