MC Fireside Chats – July 26th, 2023

[00:00:00] 

Brian: Okay, we may or may not be live, I’m not sure. But when all technical difficulties happen or when one technical difficulty happens, we always have to have multiple ones, right? [00:01:00] That’s seems how it works. I so hope you guys can hear me. 

Can you guys hear me okay? 

Shane: You are live. Brian, 

Brian: I have my mic here ’cause it’s super windy on my balcony.

I always like to create last minute problems for the show. Those of you guys watching forever know that it’s super windy, so I take it, I’m putting it down here and holding it and creating a little baby so I can be heard on the show, which nobody wants to hear anyway. But I’ll mute myself eventually and let these esteemed people.

Talk about all the amazing things that they have to talk about. Appreciate you guys being here for another episode of MC Fireside Chats. My name is Brian Searl with Insider Perks. We’re here with our fourth week show focused on the RV industry outdoor recreation. So we’ve got our recurring guest here Phil Ingrassia from R B D A, Eleanor Hamm from RVDA of Canada, Shane Devish from the CRVA.

And then we’ve got a couple cool guests here, Steve and Alec, who are both from Drive Home RV. One is in Amsterdam, Alec. And where did you say you were, Steve?

Dr. Steve: I’m in the Hudson Valley of New York. 

Brian: That doesn’t seem as interesting as Amsterdam. How did you get that assignment? 

Dr. Steve: That’s where the house is.

Brian: Oh, okay. You gotta work on that. [00:02:00] Amsterdam is a better location for the house. I like New York, but, okay. So super appreciative for everybody for being here. What do we have on our plates? Shane, Phil and Eleanor. Before we get to our special guests, is there anything that really has come across your desk that you feel is important for us to discuss or talk about?

Shane: We’ve had a bad week up here. I’ll be honest with you. Some disasters out in the East Coast, a number of our campgrounds got flooded badly. And it, it just seems every, everywhere we’re turning we’re seeing some some disasters from the climate change and it’s really affecting the the industry here.

 We need some help. Some somehow planning better for these things. 

Brian: I don’t, yeah, it’s definitely interesting. I’d love to talk more about that because it’s been Nova Scotia, right? And reading it in the news. And if my audio’s bad, by the way, tell me to stop talking, try to cover it the best I can.

But it’s been Nova Scotia flooding. How has this impacted campgrounds over there? Do we know? Do we have a sense of but.. 

Shane: Yeah, [00:03:00] we, I’ve been in contact with a few campgrounds, there’s probably a half a dozen or so, where the roads to their campgrounds have been washed out. Or some highways that are affecting travel and whatnot.

I’ve seen pictures of three that were completely Underwater. It’s fortunately receiving fast, it’s gonna take a little little time here for those guys to to get back. One guy in particular just spent $250,000 on a new septic system and the flood was so strong that the current that it actually Dug out the septic system in it and floated it away.

Brian: So how do we deal with this from and I don’t want to dive too deep into campgrounds, right? Because we’re gonna focus on the RV industry mostly, but this is important. How do we deal with this from an industry perspective? And, not, obviously you can’t stop flooding from happening, right? To a certain extent.

You can barriers things. You’re not gonna stop nature. So how is it an insurance thing? Is it an evacuation thing? Is it a [00:04:00] better infrastructure thing? How do we manage that from a campaign? 

Shane: It’s not an evacuation thing ’cause it happened so darn fast this time. I just think the governments need to start to work on flood prevention avenues.

I, there just needs to be, something done. And then, set up, I’m just doing a budget submission here for federal government for some money. And I we’re recommending that, the government provide some flood some disaster relief funds for businesses that you know, are affected in the future.

Brian: Does this, and Eleonore, maybe you dunnos that impact any RV dealers over there? I’m sure would.

Eleonore: I think what you said is, does that impact any of the RV dealers over there? I haven’t heard that has been affected thus far. They tend to be, but we’re definitely concerned about RV consumers and people that were out there, Camping, but I haven’t heard of [00:05:00] any of the dealers that have now.

I was away last week, so I haven’t had an opportunity to touch base with all of them. But definitely, overall it’s it’s a nova structure this year, but if you recall, if you know about a year and a half ago, it was in British Columbia. It did wipe out one of our large rental fleets with one of the dealers out here and took out highways.

And it’s I like that you’re adding that to your pre-budget submission chain. ’cause I definitely think, small businesses it’s really hard to recover. 

Brian: Yeah. And, sorry, my audio, but yeah, that’s what I was asking. You’re right, BC like it’s a different thing everywhere. So wildfires and BC I remember like we saw that big huge area video of the dealership.

It was taken out last year. I don’t know I, I agree with you that it should be part of the policy and the budget, but how do you prevent everything? It’s really hard. Alright, what else is going on besides unhappy? We wanna focus on that, right? But is there anything happy that’s going on?

Phil: You can talk about that. I think that dealers in the US continue to work through their inventory [00:06:00] issues. There was a big story on the industry yesterday on the Reuters Newswire talking about some of the challenges the industry’s had in North America over the last several months as and how the manufacturers have balanced their production with with the current market environment.

So I think you gotta hand it to the manufacturers for pumping the brakes on production over the last several months and letting the dealers get caught up here. Because so many 20 twos came in late, and certainly we heard the same thing in Canada when we were up there earlier this month, Eleanor about, about those types of issues.

But it, it appears we’re slowly working through those. That’s good news and we expect a stronger market in 2024.

Brian: Sorry, my mouse isn’t working too. It’s like stacking of things. I can’t even click the unmute. I have to click the m key. What do you foresee as some of the reasoning and logic that you’re running into with [00:07:00] or seeing as to why we can point to a more better robust picture for dealers in 23 4? 

Phil: Dealers have, on the shipment side, dealers have really stopped the, stopped ordering, especially when you look at the year over year numbers.

So right now we’re forecasting in North America from r vi’s numbers about a 300,000 unit at the end of 2023. So that means retail in North America will be between three 40 and three 50. So we’ll have a inventory drawdown and then that will. Lead to bigger production as dealers have to restock in 2024.

That’s the conventional wisdom right now that people are operating under. Although the, the fed interest rate could hikes and whatever they’re gonna do could impact all that as well. 

Brian: Yeah, that’s definitely what we’re seeing on the Campground side too, is just the uncertainty of we don’t know what’s gonna happen.

We think it’s gonna be like you hear every, it seems every other day we’re [00:08:00] gonna have a recession. We’re not gonna have a recession, we’re gonna have a recession. We’re not gonna have a recession. Obviously we all hope there’s a recession, but who knows way we our best I guess. 

Let’s see.

Let’s welcome Alec and Steven into the show, have introduced themselves really briefly, and especially Alec, who’s in Amsterdam. I gonna let him go to bed soon, I feel like maybe, is it seven hours, seven or eight hours ahead of time on Calgary? In Amsterdam, Alec? 

Alec: I think I might be nine. It’s 8:11 PM here, 

Brian: oh, you are? Yeah. You’re eight 

hours ahead of us yeah. So it’s, I’m eight hours ahead then. Yeah. 

But either way, you definitely need to get some sleep. So talk to us about drive home, RV, and I dunno, Steve, and how you guys wanna distribute that, but go ahead. 

Dr. Steve: Sure. Alex, you wanna start us off and then just pass it to me whenever you’re ready.

Alec: You’re the one that actually started. All right. Good pass. I joined late. 

Brian: No, keep going. Keep arguing. It’s good. Good podcast [00:09:00] number one. It’s always the debate and the back and forth between people. They like controversy. 

Dr. Steve: Yeah. And ironically that’s that’s the nature of a family business, right?

Is working out these business decisions amongst these relationships. You already have, I’ve known Alex for his entire life. Unlike other business associates I might have. So it’s a little different. But to talk about who we are, what we do. We though on the on the business end of things we’re an RV rental company.

We consider ourselves an RV adventure outfitter. What we do is we provide people with that, sometimes that very first access to RV Camping. And because of that, we occupy this very special place in the ecosystem. We take it very seriously. We wanna make sure that people have extraordinarily positive experiences when they rent an RV from us, and they try that Camping trip for the first time.

I can’t tell you how many people have timidly shared this fantasy with us about what they’d like to do with the RV. And it’s so neat to be able to talk to them and say, Hey, we can help you with that. Here’s some [00:10:00] advice. That sounds like a great idea. Maybe that’s not a great idea. Here’s something you think about and, and to help them understand things are gonna go wrong, but they’re all solvable problems, things to consider that they might not have thought about if they’re transitioning from tent Camping to RV Camping, so on and so forth.

And for those of us who are RV campers, we’ve had that transition, right? We understand when you do these things, you know that everything’s gonna fall, everything’s gonna fall outta the refrigerator every time, right? We know that. But the first time it happens to you, it’s shocking because your refrigerator had never attacked you at home, right?

So it’s helping people think through these things and having it not be the thing that stops them. Fantastic. The other thing that we do is beside renting our visas, we have. We provide with our RV rentals sheets, kitchen sets, all the things they need to get started. But we’ll also provide them with electric bikes, with standup paddleboards, with pavilion tents, whatever they need to have an excellent experience.

We started out with [00:11:00] one last year. We have seven this year. Next year our plan is to go to 14. And then from there, maybe double, maybe triple in the size. Again, the demand where we are is incredible. People want to experience this great this great access to the wilderness that you can only get with an RV.

And we’re in this great position to to make it happen. My role is more on sort of the front end operations. I have experience managing, maintaining and And moving to use three M’s. RVs. Alec also has some of that experience, but his experience is in the digital marketing realm. So he’s really done an incredible job developing a digital presence for us and creating web-based portals that, that potential clients can access our our services through.

So I’ll let him share a little bit about that and what the backend workers look like. 

Brian: Before you, before he goes, I just have one quick follow up question for you. I’m asking for a friend. [00:12:00] If your refrigerator attacks you, is that an excuse to eat too much ice cream? 

Dr. Steve: Some, it depends on how it’s attacking you.

We’ve had the experience with the refrigerator where the ammonia evaporative system has failed and we’ve got ice cream we’ve gotta get rid of. Then you gotta eat the ice cream. Generally speaking, just put the things back. 

Brian: All right. I’m gonna pass that along to my friend Alec. Go ahead. From Amsterdam?

Alec: Yep. From Amsterdam. So I’ve been Digital nomad for the past three or four years. So I think when we first, so basically my parents had done this last year. We had talked about it a little bit, I was, I think I was also in Europe at the time, and then I, after the season was over, I talked to ’em again.

This was in December. I was in Thailand and I was talking to ’em about it, it went really well with just the one unit. And then at the, I just we had one phone call and I was like, all right, we’re doing it. Like we’re gonna go, full force. And then I started researching RV deals.

I started getting appraisals. I like went like full [00:13:00] Engineer an analysis mode on the whole industry and just trying to find out as much information as we possibly could. And then, because I have experience not only with engineering, but with digital marketing, building the systems. ’cause there’s a lot of complicated things that happen with, we have all these different sites, portals, like we’re building our own booking system from scratch. We’re just, we’re developing our own software from scratch. So that’s really where my value, plus I have a team of about 10 people between the businesses I have.

So I can they can help organize things, schedule things, respond to people. And my parents are really super knowledgeable about every, everything, RVs. I took my first RV trip this year because I was like, all right, if I’m gonna be sending people out, I need to know this.

So I took a trip with my girlfriend and my friend. Down to New Orleans and back for a couple weeks, and that was, I definitely learned a lot. I was, for the first three days, I think, I called my dad every day and I was like, Hey, this thing is happening. And he’s did did you turn it on?

What do you mean? It’s like [00:14:00] sim simple stuff. 

Dr. Steve: In all fairness, that wasn’t your first RV trip, it was first your first solo RV trip. 

Alec: Yeah, but every other time I didn’t, I wasn’t the, they were looking at me where usually I’d be looking at him and my friends and my girlfriend were like, all right, you’re supposed to fix this.

You’re the person that has the RV company. I was like, I don’t, I’m gonna call my dad. 

Brian: Alright, so here’s what interests me guys. From a drive home RV perspective, right? Yeah. So how do you it interests me from all aspects, but specifically talking to you two, how do you compete? And I know there’s ways I’m asking you specifically, right?

When you get into an industry like this and you’re basically, am I correct, competing with RV, shader and outdoorsy and big, huge brand that’s just on a much smaller scale. 

Dr. Steve: No we’re on those platforms. We are competing internally. It’s like renting a house and listing yourself, but also on vr V R B O and Airbnb.

It’s essentially the same, it’s essentially the same model, building our own rental portal so that we can [00:15:00] cut out that. The RV shared, outdoorsy take about 25% off the top. So that’s a pretty big haircut, and I know haircuts. So having I having the ability to directly rent to a consumer is where we wanna get to.

The goal essentially would be a hundred percent eventually, but for right now, we’re on multiple peer-to-peer platforms as well, who we’re competing with, really who our competitors are. The way we think of it is we are competing with the large franchises from a, from this small perspective.

So we’re competing with Cruise America, we’re competing with El Monte RV. That’s who we’re really competing with some of the small, regional competitors. There’s one about 50 miles from us 84 RV. That’s who we’re, that’s who we’re, attempting to capture market share for. But ultimately, the strange thing is, the New York RV rental market was a pretty big blue ocean to use my son’s [00:16:00] phrase because there was some, there was some commercial insurance issues that, that companies were slow to resolve.

So Cruise America doesn’t have a huge presence here. Outdoorsy only recently started managing rentals that weren’t self-insured here. So once we opened our doors, if you do a Google search for RV rentals in, within about 50 miles of us, we’re the first name that comes up because, because we’re, we’re the first ones to really build a reasonable level of service in the market.

Brian: Okay. So two questions, two parts. One, how do you, and maybe this is an LEC question from a digital marketing perspective, and while I ask questions, please, like Eleanor, Phil, Shane, you’re way more intelligent on RV things than I am, so feel free to pop in and ask something smart. But in the meantime from a a digital marketing standpoint how do you’re not competing with them as a competitor, right?

But you have to, in some ways compete with them to show up in search, to run Google Ads, to optimize for ss e o to those, for those kinds of things. How do you compete with that and get them to your website [00:17:00] first to save that 20, 25%? 

Alec: The first, so I think when we started. Mo, almost all of our bookings are peer to peer.

I think now probably 50% are direct. So we pretty quickly got that launched. We’re running Facebook ads which is my like bread and butter if I’ve, I coach people on Facebook ads. I like, I’ve run Facebook ads for probably five, six years. And plus, because we’re like family owned and it’s actually us doing it, right?

Like we can show our personalities and, make videos. I’m, I filmed, I’m gonna have a video series coming out of our own trip. So we have we, they’re talking to us. So that’s a good thing at this stage. The other thing too is that you’re right I can’t outbid them on Google, but what I can do is get a lot of good Google reviews.

And when you’re searching for RVs, the map shows up before. So when, if somebody is within, like we said, 50 miles of us, they’re gonna see us first because we don’t have a ton of like angry customers

Brian: …like the map and the local SEO at the top, right? 

Dr. Steve: [00:18:00] Yes. Yep. Yeah, because of what Alec has done with the Google business profile and the website, if you’re in New York City and you’re searching for RV rentals, we’re gonna be one of the top, we’re gonna be one of the top businesses that show up.

So we regularly get calls from New York City, even though they’re passing other Fran, other large national franchises to get to us. That’s golden. 

Brian: Because the national rental outfits don’t have a local presence or they’re not optimizing it. 

Dr. Steve: There, there are local there, they, there are some local presences, but they’re not, they’re not optimizing it.

Like you say, there’s a, I think a broadcast marketing. Practice that they have to take. In other words, they’re, large companies are marketing nationally. Whereas we’re able to really fine tune what RV travel from or in the Hudson Valley looks like. So we can respond in a much more bespoke way, more a [00:19:00] a boutique way to the needs of folks in this region.

We have we also have an international, we’ve quickly gotten an international clientele and, we are managing things like, arranging an a train station pickup for a family from Spain who’s coming to the United States, and they wanted to rent an RV, so we’re gonna pick them up from the train station across the river for us.

So there’s little things that we do that. That cater much more to a, more like an outfitter boutique than just a rental company. And because of that, people really appreciate it, have a better experience, and are much more likely to say positive things afterwards. So then that leads 

me to my next question, as far as a, okay, we talked about the national brands. Now let’s look at the local people who are also renting RVs or trying to start or whatever else, right? How do you, how does what you do at Drive Home RVs set you apart? Why are, why is your rental with your company or with your equipment or whatever, why are you different?[00:20:00] 

Alec: I would say there’s, one part is, again, like we are the ones doing it, but two because our online, our website is more optimized than probably 99% of. All of the websites. 

Brian: So that doesn’t make you better. That makes you smarter. Yeah. So we’ve got that covered. 

Alec: Yep.

So that because we 

were building our own..

Brian: I’m just giving you a hard time by the way. I’m not really, I’m just trying to, it’s interesting to me. 

Alec: Oh yeah. Yep. The, my dad would probably agree with you on that. The website though, because it’s optimized, very easy for people to use.

They go in, they click around, it operates like a website that some, that you would assume from a huge company, right? That they would’ve put tens of thousands or hundreds of thousands of dollars developing. So we have the mix of, it’s us, we have every place that they’re trying to go, we’ve probably been to, so we have firsthand knowledge, like we’ve been to all 50 states.

My parents have done RV trips internationally, so it’s a mixture of being able to give, like actual, a lot of people [00:21:00] just want to take an RV trip and then they come to us. We have blog posts, we send ’em articles or we just say, Hey some people book, and they’re like, oh, we don’t even know where we wanna go yet.

So I’m like, all right, what do you like to do? I, we’d like to go, okay, so why don’t you go to the White Cliff Mountains in New Hampshire and then come over the top down to New York State, go to the Finger Lakes and come back down to us. So I’d say it’s a mix of probably the personalized local advice and then just the fact that our stuff is like newer, optimized. Yeah, 

that’s what I was trying to get to. Like you’re, like Steve was saying the the personalized service, the personal touch, the. It almost like the travel agent is made 

Dr. Steve: some more more in the nature of concierge type responses than an individual renter usually is able to, and at a level that a larger franchise is probably not able to respond to.

We’re what’s gonna be difficult for us in the future is maintaining that, that attention to relationship as we [00:22:00] scale up, right? Everything is a problem when you scale up, but that’s one of those things that, that we really wanna make sure we preserve. We were talking before about the effect of climate change on the industry, and one of the things that’s important for us always to remember is that one of the reasons why Camping is so attractive is because nature is a little bit dangerous.

When we go out into the world in this way, we are. Experiencing life on the edge and we’ve taken a lot of corners off of it, but part of that feeling of being able to be out in nature, have a fire that you’ve created, eat the food that you’ve prepared in kind of primitive conditions, regardless of the $200,000 vehicle sitting behind you.

It is a wonderful feeling of accomplishment and being close to nature as a result feels much more fulfilling as a re … 

Brian: ..And then you go to the private campgrounds because we wanna support them too. What’s that? I said, so you see the bear and wild nature and then you go to the private campgrounds.[00:23:00] 

Dr. Steve: That’s part of it, right? Yous, when you go out there, I, we’ve seen 

Alec: many dangerous creature. I had my toothpaste eaten by multiple bears. I don’t know if you’re Camping until you’ve had a bear dig 

Dr. Steve: into, I dunno why I toothpaste. 

Brian: I feel like my toothpaste, they don’t want anything to do with, but that’s because it.

Dr. Steve: I’ve lost you. The idea is that when people are, for us, we recognize that when people are encountering this for the first time, they have some fears and fantasies, and it’s our job to help them, understand the reality of their fears and help them prepare for it. And also help them, to fill their fan out, but not be fooled by it completely so that when they encounter that first obstacle, that it feels like a failure.

Very rarely have we had folks turn around and come back. It has happened. We, we’ve been receiving the smoke from up north and, it’s been pretty bad down here at times. And we had one couple who turned around and just, it was their first trip out and they, they just couldn’t take it.

They just couldn’t do it. And they turned around and came back and returned it. And we, we [00:24:00] felt very bad for them. And and I think they felt defeated. And, our job is to make sure that, to the greatest extent possible, we help folks not to have that experience. And ultimately, Go ahead.

Ultimately, we’d love to have people come back to us, but, there’s a feeling of converting people, that the idea at some point somebody said to us, Hey, why don’t you go to this dealership? They give real good deals on, on, on used RVs. Why don’t you go there?

You might be able to get a good deal on one. And as we’re moving from tent Camping to getting a unit an RV unit, a travel trail at the time that was a big first step for us and helping people to go through that is really I think we, we’ve we have this very important responsibility in the ecosystem of this industry.

And we take it very seriously. 

Shane: Can I ask something Steve? Yeah. Do you guys do you guys own the the motor homes and the trailers yourself? Or is it [00:25:00] like RV share and outdoorsy where somebody else owns ’em? 

Dr. Steve: Great question. Both. We have a number of units that we own, and then we also have units that are rented through us on consignment.

So a couple things to consider is that, it’s not, we started out as I. An individual renting one unit on RV share. And we put it up because I, last year I realized I wasn’t gonna be able to travel for the summer. I had started a new position, it was gonna require me to be present.

And so we decided, let’s see about this rental thing and put our unit up for rental. And we had such a rewarding experience, both financially and, personally meeting people and sending it out with all these wonderful people who were doing it for the first time. That we said, wow, we could, I could, I started thinking, wow, I could see this being.

A business that I would do in retirement. And we had conversations and because Alec has started and and maintained several businesses and [00:26:00] has been doing it for several years, we all got together. He himself, myself and my wife Mary, and we put this plan together to build a business.

He acquired a unit himself, and we acquired a third unit and then another unit. And we started advertising for consignments. And a few people trusted us with their units and we’re, we rent them out just like we rent ours out and we’re responsible for the maintenance and the upkeep and the management of the calendar and so forth.

Phil: So yeah. Steve, do you have just a question. Do you have a sweet spot as far as the length of Reynolds? Is it, or is it all over the map? It’s 

Dr. Steve: a great, it’s such a great question. It’s one of the things that Alec and I talk about all the time is about because we’re think we’re considering expanding.

You have to, if you’re gonna expand your fleet, you wanna make sure you have the right fleet. And so we have a variety of things right now. Everything from rather short travel trailers and a small fifth wheel to a fairly, 28 foot travel [00:27:00] trailer, a 24 foot class c a 20 nine foot class C and a 32 foot class C.

The one that is the winner in terms of rental inquiries is the 29 footer. I think there’s two factors. One is I think that size is about the sweet spot for a family. Because you can fit it in national parks, you can it’s, you can look at it and envision yourself driving it fairly easily, even if you’ve never driven something that large.

But also because it was the first one that we rented, we have a series of reviews related to it. In terms of how we expand next, what we don’t have in our fleet are Class B vans, and there’s some really good solid Class B vans that are at price points that we think are reasonable for us to be able to profit from that we may be looking at acquiring, 2, 3, 4 of, in the next year.

So one of the things that, that has to happen as we expand is how our[00:28:00] how our. Debt planning goes along with that because we don’t, we certainly don’t have the money to buy 5, 4, 5 Class Bs. So how we manage the way in which we buy them, i e do we buy them as a a, a retail consumer or a hotel consumer?

Do we somehow get a dealer license and buy directly through a company and buy on mass? And how that works in terms of loans. It’s all new for us. So we’re all processing that information. 

Brian: You need to find out discounts. So tell me, just real quick, tell me Alec, would this work? What if you put an ad on Google that says, been attacked by a bear, camping’s not for you. Sell us your rig. 

Alec: And then buy it forld, yeah, I’m gonna write that down. Definitely. I think that would definitely catch people’s attention. 

Brian: So I’m just saying waste for you to scale quicker. 

Alec: Yeah. I’ll send you a gift basket if it works. 

Shane: It’s a good way to get an RV, but never be able to rent it out again, brian. 

Alec: We have I would add character if you have some claw marks in an RV and maybe like a bare [00:29:00] nail stuck into the RV. 

Brian: For sure. There’s people who go after gunshot tourism right? And stuff like that. So 

Dr. Steve: that’s clientele we’re hoping to capture. 

Shane: Steve. From my past, I used to work for some finance companies and some somebody in the, as well.

A lot of people in the past set up these rental lines and bought brand new off of manufacturers. The downfall to that was, and to me is that the depreciation is so extensive right outta the gate. And these manufacturers for the programs needed some pretty hefty curtailments.

Where I think your sweet spot is the use and the things. And somewhere around five years depreciation’s less. And then, have a model where you rent it out and then, whatever income threshold you, you look at versus what the unit’s worth. Yeah. And then keep on turning it over.

From our perspective, we’re seeing more and more people rent, and Eleanor can say this too, and so can Phil to try these units [00:30:00] out and figure out which one they want. And I think from our standpoint, we’d love to see that because it means that there’s a lot more interest in getting into our industry.

So guys like you and cater, whether it’s regionally or whatever you guys grow to is is is really attractive to us.

Phil: Right? Yeah. From a business standpoint, and I’ve been in doing this for 25 years. What you guys are going through right now is not uncommon for For what we’ve seen over the years for rental, starting out with consignments, building your own fleet out, however you decide to do that.

The the advent of the peer-to-peers really scared a lot of dealers initially and rental dealers. What are we gonna do? And we started, surveying our members about that very issue. And when we started the survey three years ago, asking the question, are you using the peer-to-peer platforms?

Only 10% said they were they didn’t want to have anything to do with ’em. This [00:31:00] past spring when we did the survey, half the dealers are using the peer-to-peer platforms, but they’re selectively using it like in the shoulder seasons. When it’s, they don’t have the the, the organic traffic to their websites.

Yeah. Yeah. So what you guys are doing is is very similar to the experience that we see with with other rental agencies throughout the country. And kudos to you for building a business and recognizing how you can pencil it out to make the most mo money, but also give the customer that end use customer the personal experience, right?

Because that’s where a lot of the peer-to-peer really falls down is when the the individual that’s renting. It doesn’t really have the experience to, number one, check the customer out on the unit, which is bad for them and bad for the unit because they’ll break it ’cause they don’t know how to use it.

And then the other thing [00:32:00] is, they just have a much better experience with a professional rental agency than Joe down the street who’s renting out his 15 year old motor home. 

Dr. Steve: Yeah. I will wholeheartedly agree with and endorse that view and and I think it’s something more pretty sensitive to, from my perspective, I wonder how, how we can create better business working relationships with dealers to that extent.

Because we have rented I think we’ve had somewhere over 50 rentals so far this year. Maybe a little bit more. I haven’t captured that metric, but that’s 50 folks, the majority of whom don’t have an RV, but are considering buying. And, if we don’t become a dealer, how can we form relationships with dealers around us so that we can create a warm handoff to a sales team that we respect, that we know is gonna take care of our clients and is gonna give us a good reputation.

And by the way, is going to also on the other side, [00:33:00] serve us and perhaps be able to provide us with two, three-year-old trade-ins at a good value and really build up a pipeline in that direction as well. There’s so many things to think, I just, and I just wonder what your thoughts are on how those relationships might look if they were optimized.

It’s all over the map, what I’ve seen over the years. It’s it’s everything from, A independent re rental agency actually setting up a rental desk at a dealership because, renting for some dealers just is not part of their overall business plan. Why wouldn’t they do it?

They don’t have the space, they don’t have the personnel. They don’t have the the service capacity to prep the unit because they would rather make money, on customer pay and warranty work on the service side and prepping units, tying up bays for that is just not something they’re interested in.

But they, I’ve seen those partnerships [00:34:00] with the independent rental agencies work quite well. What are some of the issues? Some of the issues are Turnover at both both the rental agency and the dealership. It’s hard to keep those up if when people change. So you just have to work on it like any other business relationship.

Sure. But it certainly can happen. 

Yeah. 

Eleonore: And I would say as well, working with, there’s status, in the US there are state association, RV, dealer associations, and maybe getting to know some of the people through the state association in New York. And getting to know some of the dealers there.

Because my question to you would be, how do you do the servicing? How do you handle the servicing? ’cause we know that has to happen. And especially first time users, right? There might be a little bit. More servicing. Yeah. So to develop the, if you’re not doing it yourself, maybe developing a relationship with one of the dealers around you would be, very beneficial for both.

Dr. Steve: Yeah. That’s an interesting point because, there’s a, [00:35:00] recently I’ve heard a news item that the, I forget what the term of of industry is for it, but the time from a service booking to the time it’s completed has been reduced from 40 something days to 30 something days. Big shift, but still a long period of time.

For us, turnover is generally 24 hours. So I have, I have a unit come back, I. It doesn’t have a, I find out that it doesn’t, that the air conditioner isn’t working. I get one from Camping World and I drive up there, get it, bring it back, put it on that day, and it’s out the door. So our responsiveness, in terms of service, in order to survive, has to be rapid.

And scaling that up from seven units to 14 to 21 to 50 to a hundred, that’s going to be very tricky. But in order for us to do this work, it has to happen. We want our. Our projections are based roughly on a 45% occupancy rate, but our goal is a hundred percent. We’re well over 45% occupancy rate.

Like we, we meet that, that very modest standard. [00:36:00] But in order to be at a hundred percent, that means you don’t have units to substitute. When you have one that goes down, you have to be able to be at eight o’clock at night, have somebody on an RV roof who knows how to do the work, do it well, do it completely, do it solidly so that when it goes out the following day, it is unquestionably ready to go.

And that is tough. That is very tough. 

Shane: I I would say that getting to a hundred percent of probably a pie in the sky probably, if you Oh, absolutely. If you’re at, if you’re at 80% I think I’d be like ecs static. W we, when you guys grow your cash flow and working capital, whatever projections are gonna be the biggest key for you guys.

Yeah. Because of, as you grow and you maybe get more inventory owned by yourselves that those forecasts and the downtime whatever periods are gonna be really key for you guys. 

Dr. Steve: For sure. Yeah. Agreed. Agreed. And it already is. Yeah, it already is.

So managing [00:37:00] that as we scale is is a question of staffing. You need more people and I can’t produce another Alec and Alec can’t produce another me and we can’t produce another Mary. We have these skills and abilities and values that we bring to the business. So creating systems that, that.

That embody some of the ways in which we do things and then putting the right people in place. That is our challenge, I think, over the next 12 months. 

Shane: One, one thing that I haven’t seen that much from other rental companies, including those peer-to-peer guys, is to offer a discount to your renters.

To be an influencer and have them document on a reel or whatever. Hey, I got this unit from Drive Home RV, and look at where we are or something. It’s I don’t, you should see that. 

Brian: Can you do that? Can you be the influencer? 

Shane: No. You’d want somebody a lot better than me, Brian, but the actual consumers or whatever [00:38:00] I just don’t see that many testimonials out there.

And it could be a roving sales force for you. 

Phil: There’s a lot of that going on. Some of it independent, some of it tied to the manufacturers. Go RVing does a certain amount of that. Yes, absolutely. As well. And as far as El Monte and Cruz, one of the things that that they’re really focused on is the international market.

And so they’re not as they’re really d do a lot of work internationally, so they’re not into that thing. And they leave a lot of the domestic to the, to the independents. But you know that, that’s a good point. And I think one of the things about, and I’m sure you found this Alec, ’cause you were researching the rental space.

There’s not a ton of information on RV rentals out there. Because of you’ve got some big privately held companies that don’t really they don’t need to. And frankly, they’re probably not all that. Excited to, to to bring more big [00:39:00] players into the space. So it is hard to find out what’s going in on out there, but I do believe, our survey that we do every spring shows that it is a very vibrant market, but at the same time, it’s a challenging market because, RV dealer makes a sale, once gets a new one, makes another sale.

You’re selling constantly every week. You’ve gotta, you’ve gotta get that person down the road and then start it all over again. 

Alec: Yeah, I think we’ve definitely had feelings of vibrant and challenging. Definitely experienced both of those quite a few times. 

Dr. Steve: It’s a dynamic industry.

Alec: We, we’ve had to replace one AC on one unit twice within three weeks all right, so here’s that wasn’t vibrant. 

Brian: I wanna switch this just a little bit, right? Not too far away from what we’re talking about for the next, the last 15 minutes of the show and talk about this. I’m very interested because we talked a little bit about the changing times for dealers, the fact that purchases aren’t the same as they were last year, all those kinds of things.

As I’m hearing all of you talk, [00:40:00] I’m thinking about rentals and how, yes, I think we had Cruise America and Canada Dream. Is that what it is up here? Canada Dream. So we had those a dream and we had those back in 2008 during the last recession, right? But we really didn’t have anyone else renting RVs at the scale and size that we do now.

Sales scope we do, whether from a big company or from a drive home RV perspective, do we think that if there ends up being a recession or a slowdown in purchases, which has already happened for an extended period of time, do we think that rental RVs help bridge that gap and continue to allow people to enjoy the lifestyle until they’re ready to purchase again?

Do we think that’s maybe a bridge to keep them in the RV space longer? ’cause I think it is.

Dr. Steve: So I, I will jump in on that answer with what I’ve been thinking about in that space, I think that there is room for an RV [00:41:00] rental company to allow people to spend less money first, right? You buy an RV and if you buy a motor home, you put a great deal of money down and then commit yourself to large payments.

Now you can buy a travel trailer used for very modest means. So really where the market, I think becomes, is in motorized Camping, right? It becomes Class Cs, class a’s class B. So those are the areas where I think people will be able to, I think what we end up having to do is, we have very particularly.

Complex systems in our motor homes today, and then we don’t think of them as complex. But in order to get them cheaper, you’d have to do some things that are a little bit different and get them more modest. And if you can create units that you can purchase a little bit more modestly maintained, a little bit more modestly, you can go down down income category I think a little bit.

And I think you, there’s a, [00:42:00] there will be a market even if recession becomes a major factor in our economy. I think the question is, what will people want in that experience? Will they want to travel with an RV because they think it’s a cheaper way to see places? Do they wanna travel in an RV because they want an adventure in the outdoors?

And I don’t think both, I think serve both those things well. I think you can, but I think an inexpensive travel experience. Is not for me. The thing that I’m, I feel like I’m able to provide as much of, although I can a little bit we are really good at hotel. 

How’s that? 

Brian: Cheaper than a hotel?

Dr. Steve: Still can be. Absolutely. Yeah. 

Brian: So that’s the, I’m not talking about marketing it as cheap, but marketing it as more affordable. 

Eleonore: And our studies have shown, both in the US and Canada, that RV travel is, one of the most affordable family vacation opportunities. 

Phil: The significant, the last downturn, during the recessionary period, Campground occupancy did [00:43:00] not go down nearly as much as RV sales.

Campground occupancy was down five, 6%. People were still using units, whether they were, they just held onto ’em longer or perhaps they rented and, it’s amazing. Some of the studies we’ve done on buyers, the number that have wr rented before they, they bought isn’t all that high.

You would think it’d be 20, 30%. It’s 12%. So while that’s not an insignificant number, when you think about, okay, 12% of those rentals that’s, bought that’s still a pretty good number. It isn’t as much as you might think. And there are a lot of people that rent for a specific reason.

Or just because they want to have a onetime experience and then next year they’ll go do something else. We’ve gotta keep keep a wide I on the rental side, I think you have a, you have to kinda keep cast a wide net. There’s not, yeah. It’s hard to put everybody in a bucket.

Brian: I don’t disagree with be clear. I’m not talking about taking away sales right. From dealers. I’m [00:44:00] talking about if there is this slow down and willingness to spend a lot of money, then maybe that keeps the demand het up to the point where when interest rates come back down, it pops for dealers. 

Dr. Steve: Phil, I also wonder, as you were talking, I was thinking about, in past years what the access to rental units was.

So today the access to rental units is much greater than it was 10 or 20 years ago. Certainly. And how that in influences the market, I think, is a, is story yet to be told in the data, but I’m interested in it because I, it is very clear from our experience that we have large numbers of people.

Probably the majority of folks who rent an RV from us are telling us they’re interested. They’re thinking about buying and they’re renting and we have people renting for lots of reasons, asking about, they’ve got construction in their house, they need a unit to stay in. We have one unit that’s going to California and back over five weeks.

We have another unit up in the Maritimes visiting Nova Scotia and Prince Island and and And, there are lots of reasons why people do this.[00:45:00] But I think that having access now to rentals so easily is a game changer for folks. We’ve also had folks contact us asking if we had a specific model because they were thinking about buying it and they wanted to rent it from us.

And that made my ears pick up. I thought, what would if that’s the case, like what models should we have.

Phil: And there’s a wider variety of available now through the peer-to-peer market than there used to be. It used to be class C motor homes was like 80% of the rental market.

Yes. And now that’s that’s changed quite a bit, whether it’s peer-to-peer or on dealer lots. If they’re a rental dealer or for rental agencies like you guys. Yeah, it’s a wider variety of units for sure. 

Dr. Steve: Hey, I wanna a ask a follow-up question. I know we’re close to the end, Brian, I don’t mean to jump on your on your role here, but I question 

Brian: that’s always way better if I shut up. So Please. 

Dr. Steve: I believe one of the, one of the conversations earlier was about what what units we had and what we were thinking, how we were thinking about expanding or thereabouts. And I’m wondering from your perspective as folks who have been watching the industry professionally for a period of [00:46:00] time what would your advice be to us as a rental agency?

What should our expansion look like in terms of, types of units or the market we should be in? 

Phil: Based on our survey of the kinds of units that are being stocked right now, and we ask this every, every year, right? Like I said, it used to be almost 80% Class C units. And there’s a lot of good reasons for that.

If it breaks down, it can be towed to a car dealer and get fixed most of the time. At least they can get the people back and forth, right? There’s a certain appeal to having the same unit so that if something does happen, you just swap it out. And the person doesn’t know the difference. So there’s that part of it.

However, with everybody having tow vehicles now and a lot of people having hitches already the tow vehicle market has really taken off too. And of course for the rental agency, you have less of a financial stake in that towable unit. Yeah. But I think you hit the [00:47:00] nail on the head. That family unit, that family size unit is, seems to be the one that is the most un unless they’re in a specialty market area for some reason.

Like around nascar NASCAR tracks, we see a larger class A. That’s very popular around there. Yeah. But that the family unit seems to be the towable unit of choice among our members. 

Brian: It makes sense, right? You have four people to defend against the bear.

All right, what else are we gonna talk about? We got five minutes left here. What do we wanna, anything that’s come across your desk? Shane, Phil, Eleanor, Alec and Steve, do you have anything else to add? 

Alec: One thing that’s interesting is I’ve been running every day around where I am. I’m outside Amsterdam.

There’s a ton of like small class E RVs around here. Like I, I’m next to a golf course and there’s eight parked in the parking lot. And even when I was in Spain too, I was like going in to the top of this mountain and there was [00:48:00] like a parking lot just filled of RVs. There’s RV. That was one thing I was surprised was like Europe.

There was a ton. Yeah. Yeah. They’re like small class C’s. Like they’re, I don’t even know, I don’t know if they’re Class B’s or Class C’s, but they’re like, there’s a ton here, everywhere I go. 

Phil: Yeah. It’s interesting. And more and more US manufacturers are looking at that European market and how they’re building those units.

The size of ’em the weight they’re just they’re much different units than that are on the US roads. Very much smaller units and more compact for a lot of different reasons. 

Alec: You get taxed on weight in Amster, you get taxed on weight in Netherlands, so they might arrest you for a super or something like that.

 To try to get that over here. 

Phil: Exactly.Y. But there’s a lot to learn. You’ll see n Dusseldorf show coming up. You’ll see a lot of us folks checking that out, shane, Eleanor. Yeah. 

Shane: It’s, is it, is that in August or September? Phil? It’s coming up. 

Dr. Steve: It’s the end of August.

Alec: Yeah. 

Brian: For those of us who don’t [00:49:00] know that this was a show, is what, 

Phil: it’s the big European RV show and it’s massive. It’s truly a European show that, crosses all countries, even though it’s in Germany and Germany’s a big producer of RVs. But Italy, Spain, France, the Euros, they’re all there.

Yeah. We RV two hours away, 

Dr. Steve: We’ve rvd in Spain Alec I mentioned before, and it was striking to me how the similarities in the industry and also the, some of the differences were things that had never considered, what people are doing in their Camping lives in Europe versus the United States.

And a lot to be learned, I think in Tampa, the Tampa RV show. Over the past two years, we’ve seen, this very salient shift from these traditional United States based designs to more European models being introduced and more European sensibilities introduced [00:50:00] into our into the palette of units that you say, the design, the materials started to shift and it’s really, I think, going to create a refresh for the industry.

That’s marvelous. 

Brian: Do you have a, is there a peers of RVDA in Europe or RVIA in Europe? 

Phil: It must Well, they have their own associations over there. Eleanor, you’ve had more to deal with that a little bit than I have, but they, yeah, we they’re combined groups too, the dealers, manufacturers, and sometimes the campgrounds are all in one group together.

Eleonore: Yeah. And the largest one is the German association. But there are ones in England and France and generally there. Yeah. An industry association. 

Phil: Yeah. We just hung out with a guy from Australia. Last month. Yeah. 

Brian: I ask is it, do you think there’s a possibility we reach out?

I’d love to have, maybe Australia’s time zone is too different, but maybe we can..

Eleonore: Yeah, we can. I can I know the person in me Daniel, I can maybe forward contact info and. 

Brian: But he would be the same time zone Alex in. So it would be [00:51:00] late, right? For him? 

Alec: Yeah. I can go meet up with him.

Dusseldorf’s actually only two and a half hours from 24 hours biking. I only have an electric bike here, so I’ll, see if I can make that. 

Dr. Steve: I think you should get to Dusel. Think it’d be fun. I we’ll meet you. 

Brian: Perspectives that we take from that. And we’ve tried to bring in we tried to bring in, I ibar from Europe into the camper the first week owner show we have.

And you just got too busy. Couldn’t continue. But I really would like to get that perspective because I think it’s valuable for all of us to learn from each other wherever we are in the world. Especially as we adapt. There’s things that they can take away from us. There’s things we can take away from them.

And I think that perspective is super valuable. And where else are we gonna do another digital show? Anything else? Any closing thoughts? 

We got about a minute left. 

Dr. Steve: I just wanna say thank you for inviting us. It was an honor and pleasure. I really enjoyed the conversation and 

I refreshed ideas and really appreciate it and look forward to having more conversations in the future. 

Phil: Good luck with your business going forward.

Sounds like you guys got a good plan going forward. 

Dr. Steve: Thank you. Thank [00:52:00] you. Appreciate it. 

Brian: Good luck. When you need to scale and you’re having trouble, come back and see us and we can talk to Phil again. I don’t, I, I’ve only heard rumors, but I really think like Phil actually talks to every single dealer every day.

I’ve only heard rumors about that and I’m pretty sure that’s true. So thank you guys for joining us. I appreciate for another episode of MC Fireside Chat. Steve and Alec, thanks for taking us through Drive Home, RV. It’s really always interesting to hear those entrepreneurial stories. Hopefully you can hear me with the wind still.

I’ve got my hands cued across the bottom. I don’t know, we’ll find out. But thank you for joining us for another episode and we’ll see you next week. And take care guys. I appreciate you, Phil, Shane, Eleanor, everybody. Take care. 

Dr. Steve: Take care. See you guys. Thank you. Bye. 

[00:53:00]