Utilizing a recreational vehicle as a form of lodging gained traction amid the pandemic as travelers sought out open roads and distance from others.
In turn, capital began to flow into RV rental platforms and peer-to-peer marketplaces: In October of last year, RVshare snagged $100 million for its peer-to-peer model, while RV membership program Harvest Hosts raised $37 million in March and booking site Rvezy collected $20 million and RV rental marketplace Outdoorsy nabbed $120 million this summer.
While it appears RV accommodations are having their moment, the segment has quietly been building for some time. In 2018, Austin, Texas-based Outdoorsy closed a $25 million Series B round and secured $50 million in Series C financing one year later.
Also in 2018, RVshare raised $50 million from the team that led the first investment in vacation rental company HomeAway, Phil Siegel and David Lack, of Tritium Partners. That same year RVshare brought on Jon Gray as CEO.
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Prior to RVshare, Gray was a senior executive at HomeAway – in fact, he was the home-share company’s third employee – and he has seen first-hand how the trajectory and professionalization of the RV rental market mirrors that of vacation rentals.
“Going back to vacation rentals, vacation rentals were always a good idea. When 2008 happened and you had the financial crisis, everything that was cool about a vacation rental – more space, a kitchen of your own where you can prepare your own meals, taking this asset that you have and turning it into a second source of income – all of those things painted in the light of a financial crisis became even cooler than they were before and helped bring the category into the mainstream,” Gray says.
“COVID was basically the exact same thing for the RV rental industry. RVs have many wonderful things about them – they’re air-conditioned; they allow you to bring a kitchen with you; they allow you to bring a bedroom with you and you have control over your space; you can be just with the people you want to be with.”
Road to professionalization
According to RVshare’s 2022 Travel Trends Report, which includes research conducted by Wakefield, 90% of survey respondents say they’re very or even 100% likely to travel for leisure next year.
Fifty-three percent of all travelers say they’re likely to consider renting an RV for a future trip, while 70% of millennials and 54% of Gen Xers say they are planning on taking a road trip or vacation in an RV in the next 12 months.
As the idea of “work-from-anywhere” takes hold, 67% of travelers say a strong Wi-Fi signal is a must-have, indicating that travelers are expecting similar amenities living and working from RVs as they would a rental home.
They’re also expecting a level of professionalization they’ve come to expect from vacation rental sites.
“What you want to do as a marketplace operator is make sure the supply that you’re providing is providing a good experience to the travelers that are coming to your marketplace,” Gray says.
“This sounds really simple, but you have to get your owners to get back to travelers. When travelers reach out, they have to be responsive. The listings have to be written well – say what they are, what they’re not. They have to include technical specifications, all of those types of things.”
Harvest Hosts chief of staff Wes Clark says that in some ways, the RV rental industry is a fusion of short-term rentals and car rental processes. “Travelers planning a road trip are seeking companies to connect them with quality lodging and a safe mode of traveling,” he says.
Gray adds that marketplaces also must meet travelers where they are in terms of how they want to book, which for RVshare meant rolling out an instant booking option.
“You need to make it a conversion-friendly marketplace; we knocked that out pretty early on. The next evolution is people buying several RVs and starting small businesses. We’re working with providers who have more than a thousand RVs and want to rent them out and are using us now as a distribution channel.”
Outdoorsy co-founder and CEO Jeff Cavins says that the onset of COVID has driven demand for what was once a gig to earn extra cash on the side to the ability to rent out RVs as a full-time profession.
This sounds really simple, but you have to get your owners to get back to travelers.
Jon Gray – RVshare
“Three key pillars that we provide to make this happen are professional software (WheelbasePRO), insurance (Roamly) and demand (Outdoorsy). By providing these services, we have seen a strong growth in mom-and-pop operations becoming fully professional,” Cavins says.
“And on the side of established RV rental businesses, we’ve also seen a strong demand for more digital and efficient solutions to cope with the booming demand on all markets where we operate.”
Year-to-date, 240 new companies have started using Outdoorsy’s fleet management software program WheelbasePRO to run their business – amounting to roughing one new RV rental business being onboarded every working day.
On the host or owner side, compared to vacation rentals, one key difference for RVs is the ability to quickly scale and grow, Cavins continues.
“Our Consignment feature in WheelbasePro allows the budding professional RV dealer the ability to rent other RV owner vehicles on their behalf, and share in the profits. This allows them to grow a fleet of vehicles quickly, without the significant overhead cost. Consignment is a win-win situation for RV owners and dealers wanting to quickly grow their businesses.”
Cavins cautions that although the RV rental market is experiencing a renaissance, “it lacks quality and consistency in the experience.”
“We as consumers need to be able to rely on the brand, to trust that we’re going to get the same level of consistency and quality as you might if you went to order a coffee at Starbucks. In the years ahead, Outdoorsy will continue to build and bring professionalism, quality and consistency into our marketplace.”
RV’s next stop
Although different modes of travel have begun to open back up amid the pandemic, Gray believes RVs will become a mainstream category of travel.
“Most people think of [RVs] as a road-trip tool, but we want to expand those use cases – sell the idea of RV into music festivals, into NASCAR events, into tailgating,” he says.
“There’s the road-trip component, but there’s also a flexible accommodation component.”
Gray adds that almost half of the RVs RVshare rents are deliveries, where an RV is sent to a specific location such as a campground, and he expects that trend to continue. The reopening of international borders will also boost business for types of travel such as coast-to-coast road trips.
Clark believes younger travelers will be more interested in vehicles that have a smaller carbon footprint – smaller camper vans, electric vehicles or RVs with solar panels compared to bigger rigs.
He says consumers will also gravitate toward RV rental companies that will help surface interesting and unique experiences best enjoyed from an RV and on the road.
Meanwhile, Cavins points to a new crop of high-end boutique RV rental businesses answering the needs of a fairly new base of very high-end customers.
Ultimately, Gray says, “what we saw in the vacation rental business is that the ones that are more ambitious are the ones who will be disproportionately successful in a marketplace that rewards convenience and ease of use for its consumers.”