The Effect of High Gas Prices on Rv Parks

In my town gasoline is around $4 a gallon. It costs me almost $100 to fill up my Dodge Durango. As I’m driving down the highway, I see a huge RV and think to myself “boy, that must cost a fortune to fill up”. Surely, you would think, this gasoline crisis is going to put an end to the RV Park Industry! Well, that’s the easy conclusion, but not quite the right one. In fact, the high cost of gasoline is going to have negligible effect on the RV Park industry.

Let me first emphasize that I am talking about the RV Park industry not the RV industry. Yes, I think that the high price of gas will have a significant impact on RV sales. But I’m talking about the RV Park business, those RV parks where you place your RV overnight to sleep while you are on the road. It’s economics are much more complex. 

The first reason that the RV park business will have little adverse reaction to high gasoline prices is the unique type of customer who owns these things. Many of these RVs (in fact, a huge number) cost over $100,000. Some cost up to $2,000,000. As a result, RV owners are not as financially strapped as the average American. Sure, they cringe when they fill up – but they fill up anyway. They have the disposable income to buy gas at $4 a gallon, and $5 if it goes to that. I don’t know how high gas would have to go to change their buying habits, but $4 is not it. 

The second reason is that RV parks are not about driving – they are about sitting. If you want to drive your RV less, you just stay in the same RV park longer. It costs the same for a night of lodging in any direction you travel, so why travel at all? Many RV users will more than likely drive less distance, but stay on the road the same number of nights. 

The third reason is that RVs are often used on special occasions –such as vacations – and those are times in which the average owner is willing to consume more. If you have been planning a family vacation for a year, it is unlikely that you will cancel it because gas just went up 50 cents a gallon. You may complain, but you will keep on pumping. 

The fourth reason is that many RV users will cancel other, more costly travel options, such as foreign travel, and use their RV more. Once you own the RV, it is a lot cheaper to take it down to some destination than to book airfare, car rental, etc. at some more exotic locale. 

The final reasons is that, even at $4 a gallon, it is still financially attractive to travel in an owner’s RV rather than the other travel options. If you were to drive an RV with 8 miles per gallon fuel consumption from Missouri to Los Angeles, it would cost you $922 in gasoline each way (1,845 miles). That sounds like a lot. But how much are four tickets on American Airlines for this same roundtrip? About twice that amount. And while you are driving, you get to see all the sights that many people love; from national parks to tourist shops and the square in Santa Fe. You also have to add on the price of the RV parks at night, which are about $30 per night, compared to $200 a night in Los Angeles and Santa Fe. So as you can see, the RV, despite $4 gas, is the clear winner as far as cost. 

So before you condemn the RV park industry as another victim of the gas crisis, think outside the box. The RV park business is alive and kicking. And showing no signs of recession.