Ask any Millennial what hobbies they enjoy, and many will respond with travel at the top of their list. Indeed, as this generational cohort moves into a comfortable financial position within the workforce, travel has become a priority. Almost half of young people would rather spend their money on traveling rather than purchasing a home, clear evidence of their preference for experiences over tangible goods. And according to one study, Millennials take an average of 4.2 trips per year.
The booming popularity of travel comes with a price tag, however, forcing some adventure-hungry Millennials to come up with alternatives to pricey flights and accommodations. Luckily for them, and perhaps for you, it seems they have found a suitable workaround: recreational vehicles.
What’s the Appeal of an RV?
Recreational vehicles come in several varieties including motorhomes, campers, and travel trailers. RVs are used as a mobile form of housing for short-term living, usually by people who have more permanent housing but enjoy the option of portable shelter. While not all RVs are meant for prolonged occupancy, many are suitable for trips spanning several weeks or even months.
Buying an RV is an expenditure, but owning one significantly reduces the travel costs that come from lodging and even dining. Most come equipped with kitchens and refrigeration, as well as seating, beds, and showers. People who choose to purchase an RV plan to be on the road and get maximum value out of their vehicle, and RV sales have experienced eight consecutive years of gains. Indeed, the volume of RV purchases has scaled along with the desire for travel, and these trends mean an increase in demand for land that can accommodate these vehicles.
What Are the CRE Implications of the RV Boom?
No trend exists in a bubble. As such, there are several commercial real estate implications to increased RV purchases and use.
RV Parks and Campgrounds
Campgrounds are becoming more popular as Millennials desire to spend time in nature and feel connected to the environment. In fact, over half of Millennials plan to spend more time camping than they have in the past. However, this generation’s idea of camping isn’t quite the same as that of their predecessors. Due to constant exposure to information and social media, campgrounds should be prepared to accommodate these campers with amenities such as wi-fi, heated lounges with televisions, and fully functioning kitchens and restroom facilities. While some campers are lower maintenance, preferring simple electric and sewage hook-ups, amenities are as important to campgrounds as they are in any other asset class.
Travelers want to make memories and enjoy new experiences. However, they’re constantly on the move, so strategically placing entertainment near RV parks with eye-catching road signage may help attract their attention. Many who choose this form of travel are open to discovering new experiences to enjoy along the way, rather than planning all of their activities in advance. Self-guided attractions with rolling or optional start times (like museums and geocaching, for example) ensure that these people are able to enjoy entertainment options on their schedules.
While Millennials look to travel more and live simply, many have already accumulated items of sentimental value that they don’t want to let go of but may not use frequently if they are on the road. Further, RVs simply do not provide ample space for items that are not essential. Rather than get rid of most of their belongings, many opt to store these items long-term. Some RV owners also gradually transition into full-time mobile living, creating an additional demand for self-storage.
As travel continues to be a priority for Millennials, the demand for RV-related real estate will only grow. Not only do most Millennials want to travel, but they are increasingly in a financial position to reach this goal. Understanding what they expect and how to meet these expectations will enable your firm to cash in on the RV boom.
For more information on alternative investments, check out Investing Outside the Box: Alternative CRE Investment Opportunities