The global pandemic ushered in a new era of people hitting the road in recreational vehicles (RVs) as they tried to keep their distance from others to curb the spread of the COVID-19 virus.
During the pandemic, consumers splurged on things like RVs and bicycles to make government-imposed lockdowns more bearable — more than 600,000 vehicles were ordered in 2021.
RV ownership has risen over the past two decades with 11.2 million households owning one, according to the National RV Dealers Association (RVDA). But there are only 1.7 million pads with services like water, sewer and power. The RV industry is expected to nearly double in value to $64 billion by 2024 and to more than $88 billion by 2028, according to research from real estate development firm RREAF Holdings LLC.
With those kinds of numbers, RREAF sees an opportunity. The company acquired five RV parks with a market capitalization of $157 million in Alabama, Florida and Texas where it plans to develop additional pads and upgrade existing amenities. It also plans to buy another tranche of RV parks this year at an anticipated capitalization of $550 million.
“There is a lot more demand than supply for this type of product,” RREAF Chief Operating Officer Jeff Holzmann said. “People who have a lot of money and drive up in one of these motor homes don’t want to park at a Walmart. We think of it as a horizontal hotel.”
Amenities RREAF plans to add to its parks include resort-style pools, lazy rivers, rope courses, fitness centers, outdoor games, family entertainment facilities, golf carts, water slides and pickleball courts.
“We think it’s something people want,” Holzmann said. “Our core strategy is to buy the mom and pops and start adding the amenities.”
RREAF also will build cabins, tiny homes and bungalows to accommodate people who are not traveling in an RV.
“If you have friends who don’t have an RV, they don’t join you, so we have a destination in the same park where they can enjoy the amenities,” Holzmann said. “We’re expanding the parks to be more outdoor living than just a place to park and spend the night.”
But the RV bubble is bursting, with shipments of recreational vehicles down 49.2% year to date, according to the RV Industry Association.
“We love this concept,” Holzmann said. “Is it going to work out? Only time will tell, but we think it’s something people want.”
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