In terms of revenue, fleet size, and length of contracts, things are looking up for the RV rental business, according to a recent survey conducted by the Recreation Vehicle Rental Association to gauge profitability and trends in the RV rental market.
“This segment of the market continues to be a winner for dealers. For the third year running the survey results underscore what many of us in the rental space already know,” RV Rental Association Chairman Scott Krenek said.
Of the rental operators surveyed, 80 percent reported higher revenues in 2015, with about half of those dealerships experiencing revenue increases above 20 percent. 16 percent of dealerships surveyed had increases of 50 percent or more.
Slightly more than half of respondents (55 percent) said they plan to increase rental fleets this year, while 33 percent plan no changes.
The numbers show growth and profitability among rental operators, but left some room for improvement. Specifically, only 12 percent of the survey respondents planned reduction in fleet sizes, but 37 percent reported margins are not adequate.
“Remaining profitable” also was listed as one of the biggest challenges to success in the RV rental business. “This survey is such a powerful tool for dealers because it identifies challenges we can work to address, from financing to insurance, by working with industry partners to clear the way for greater profits,” Krenek said.
Although dealers who respond to RV Dealers Association, quarterly market surveys say adequate amounts of wholesale and retail financing are available, 23 percent of respondents to the RVRA rental survey say finding financing for their rental fleet is their biggest challenge.
For most rental operators, though, the survey reflects strong growth, specifically among towable RV rentals, which 45 percent plan to include in fleets, exceeding the popularity of Class C motorhomes.
An even 40 percent of respondents plan to include Class Cs in their rental inventory.
Almost 80 percent of dealers who rent towables will deliver units to a campground or other location for the customer, and most are seeing an increase in customer requests for trailer deliveries.
Dealers report growth in the length of contracts over the prior year, too.
Contracts spanning four to seven days accounted for 70 percent of rentals in 2015 versus three night contracts leading the way in 2014 at 50 percent. The breakdown of rental contracts last year averaged four to five nights for 35 percent of dealers, six to seven nights for another 35 percent of dealers, three nights for 25 percent, two nights for four percent, and more than seven nights for 2 percent.