Leisure Industry: Not Your Dad's RV

Clarence Thomas--yes, that Clarence Thomas--loves to hit the road in what he calls his "condo on wheels." Shaquille O'Neal bought his own mobile McMansion last summer, a 37-ft. Fleetwood Discovery, and he didn't even need to supersize it. And in January, after finishing his second term as Governor of Maine, Angus King set out with his family on a five-month cross-country odyssey in his big Newmar Dutch Star, which in place of a rearview mirror has a dashboard video screen hooked up to an aft-mounted camera.

Recreational-vehicle sales are booming, and the appeal of RVs is much broader than in their previous heyday, the free-wheelin' early '70s, when they earned a reputation as gas-gulping retirement homes. Today RVs are being bought--and rented--by a younger and more affluent crowd. At the same time, more and more baby boomers are reaching the age at which Americans traditionally buy RVs. Some owners see their RVs as escape vehicles in case of terrorism. Other, stressed-out families just want to vacation without the hassles and worries of air travel--and bring a little bit of home along with them.

Or a lot of home. To attract upscale, first-time buyers, RV makers are offering new levels of luxury and size (think of a 225-sq.-ft. hotel suite with a kitchen and a surround-sound theater). "The average RV owner isn't Joe Six-Pack anymore. It's Joe Chardonnay," says Mike Duncan, investor-relations chief for high-end-RV maker Monaco Coach. The industry has also been winning over the sporty set with vehicles that include not only living quarters but also loading ramps and cargo space for Jet Skis, kayaks, ATVs and dune buggies. As for gas mileage, some new motor homes--the industry term for self-propelled RVs, as opposed to ones that must be towed--are surprisingly efficient. Winnebago CEO Bruce Hertzke notes that his company's sleek mini--motor home, the 22-ft., $62,000 Rialta, comes with a kitchen, double bed and bathroom and gets better gas mileage than the SUV he drives to work.

It's no coincidence that RVs are getting spruced up just as image-conscious boomers, now 39 to 57, head into their prime buying years. (Boomers are turning 50, the typical age of motor-home buyers, at a rate of 350,000 each month.) Today's low interest rates not only make RV loans more attractive but also leave buyers feeling wealthier after refinancing their home mortgages. While most of the economy sputtered last year, the RV industry was catapulted out of a downturn and into its second best year since the Iran oil crisis pummeled the business in 1979. The industry tends to be one of the first to recover from a recession; after a gut-punching 2001, factory-to-dealer deliveries jumped 21% last year to 311,000 units, and sales approached $11 billion. Rentals were up by a third. "The demographics are pretty locked in for the next 25 to 30 years," says Hertzke. "Our whole industry is going to do extremely well."