An SOS call for sputtering RV industry

COLLEGE PARK, Md. -- Ted and Kay Watts have been cruising the USA in their 300-square-foot recreational vehicle for 15 years, motoring up to eight months a year while keeping a permanent home in St. Charles, Mo.

"Our goal is to see all the national parks and historic sites in the U.S.," Kay Watts says while hooking up her RV at Cherry Hill Park here.

But with the economy reeling, the two are meeting with their financial planner in April to determine whether they can continue to travel as much, given the drop of their retirement accounts. "As long as we're healthy, we'd like to continue," Ted Watts says.

Times are rough for the RV industry. Tightening credit and a lack of financing options are keeping new customers on the sidelines. Shattered consumer confidence is forcing many RV owners to cancel extended trips.

For years, RV dealers could do no wrong. The number of units sold grew for five consecutive years until 2007, and there are now 8.2 million RVs on the road.

But in 2008, when gas prices hit $4 a gallon and the recession gained strength, RV shipments fell 33% from 2007 to 237,000 — and could drop to 130,100 in 2009, says the Recreational Vehicle Industry Association.

The industry's woes were brought to the forefront last month when President Obama pitched his economic stimulus plan in Elkhart County, Ind. "The RV Capital of the World" has seen its unemployment rate spike to more than 15% this year largely due to the industry slowdown.

The downturn does mean that RV prices — which range from $10,000 to $400,000 — are "easily down 25%," says John Mancinelli of Redex RV, the largest dealer cooperative.

Campgrounds are offering incentives to get families to stay longer and urging budget-conscious travelers to try local spots. Mike Gast of Kampgrounds of America, which runs one of the largest U.S. campground networks, says its bookings are down about 6% this year and rates will remain flat for many locations in 2009.

KOA runs a yearly May promotion that lets all customers paying for Friday night to stay Saturday for free.