As peak summer travel season closes in fast and with flights, hotels and restaurant prices all inflated, more people are opting to ditch that model and rent a recreational vehicle (RV).
The economics of RV rentals are favorable in several ways, Co-founder and Chief Marketing Officer Jennifer Young of online RV marketplace Outdoorsy told PYMNTS, leading to a surge in first-time renters on the platform this year.
“When we look at summer 2023 against 2022, which was a record summer for us, we’re currently outpacing it,” Young said. “Overall, revenue is up, and bookings are up. The growth is fueled by our first-time bookings, as 76% of all Outdoorsy bookings are now first-time bookers, which is … the highest of all time.”
A combination of factors from the high cost of traditional airfare and hotel vacations to the strong supply of late-model RVs available for vacationers driving down rental costs are contributing to the spike, which Young said is skewing more toward younger consumers.
Other economics make RV’ing an attractive option in a year dogged by inflation and fears of a full-blown recession. Young said the fact that RV renters tend to prepare their own meals in their RV kitchens and campfires brings down overall costs, as do things like buying a national park pass that can be used multiple times.
“Now you’re layering on cost savings,” she said.
That extends to payments. Young said Outdoorsy has partnered with PayPal to expand payments choice and terms, including installments.
“Now, anybody that rents from Outdoorsy, whether it’s an RV rental or an outdoor stay or a stay in one of the campgrounds, is now able to choose what payment terms best suit their financial circumstances,” she said.
“We’ve launched pay over a 6- to 12-month period, interest-free,” she added. “We’ve also just launched a product that allows guests to make four payments over two weeks. The goal is to offer as much choice as we can in terms of the products we offer, the ways to get outdoors, and then also the ways to pay for it. Flexibility or flexible pricing is something that we’re leaning into.”
Confirming a trend documented in the latest “New Reality Check: The Paycheck-to-Paycheck Report: The Supplemental Income Edition,” a PYMNTS and LendingClub collaboration, half of the 60% of employed consumers surveyed for that report has a side job or other form of supplemental income. Among consumers living paycheck to paycheck, 35% with issues paying their bills have an additional source of income, as do 33% living without difficulty.
That trend is evident on the Outdoorsy platform too.
“We’ll probably see a lot more side hustles forming or a lot more of those individuals that bought perhaps an RV camper van during the pandemic years, or even had one over the last 10 or 15 years, that might consider leaning into that as a form of secondary income … because it’s such a great side hustle,” Young said.
It’s in line with Outdoorsy’s reputation as an innovator. The company created the Roamly RV insurance offering that simplifies coverage and allows RV owners to turn their passion into a small business, covering everything from damage to roadside assistance in a turnkey solution.
Roamly put Outdoorsy ahead of the embedded InsurTech trend in some ways.
“Roamly has now evolved from providing that episodic legal insurance to a full suite of road and travel protections,” Young said. “It’s realized over 240% year-on-year growth, which is a beautiful new hockey stick curve for the business in that suite of products.”
The marketplace has built Software-as-a-Service (SaaS) tools designed to help RV owners run a rental business, giving hosts insight into local demand, the best pricing for different rental durations, and flexible pricing through PayPal, all of which “are producing a reduction in cancellations and happier guests, which attracts more hosts to build a side hustle on the platform,” she said.
Next up will be providing discounts to electric vehicles in the RV category and potentially into campground insurance as well, she said.
“Supply is at an all-time high for our business,” Young said. “The core stats that I would point out are the amount of bookable RV rentals has grown over 50% since 2020. And the number of quality vehicles, or at least newer vehicles, those that are less than 3 years old, is over 50%.”
Asked if its Outdoorsy Destination Network of alternate lodgings on the platform, including cabins, yurts and treehouses, competes with the likes of Airbnb, Young said she understands why people think it might, but she explained that Outdoorsy is focusing on different experiences.
“We’re homing in on that family or individual that’s looking to spend more time outdoors,” she said. “On our platform, you’re going to see just the categories of outdoor camping, glamping and travel options. Yes, in vehicles, and also in stays and campgrounds and campsites. But what you won’t find on Outdoorsy.com is more of the 70-plus categories of travel or accommodation options that you’d find on an Airbnb.”
Rather, the RV marketplace is focused on the needs and wants of its core customer demographics, which she said are 35- to 55-year-old individuals or families looking for light hiking, national park excursions, and the like, typically within 50 to 200 miles from their home.
She also noted that in the era of so-called “bleisure,” travel that blends business with relaxation, “That’s the case for us on the platform as well. We’re starting to see a lot of people that are booking trips in nonweekend periods of time. They’re booking a trip on Thursday, Friday, and the inference is for work, and then enjoying that weekend in a new location and getting a little bit of leisure and vacation time in the same week.”
And because 65% to 70% of all the inventory on the platform offers a “get it delivered” feature, owners will deliver rented RVs to campgrounds, boondocking sites or other destinations.
“You only usually drive on the first day or the last day of the trip,” she said, which renters find to be a highly valuable feature that also cuts down on gas costs.
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