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State of Industry 2019 CARAVAN INDUSTRY ASSOCIATION OF AUSTRALIA

SUMMARY

Australia’s caravan industry enjoyed a record year in 2018, with domestic caravan and camping trips exceeding 12.8 overnights trips and nights reaching 53.5 million, a 7.1% and 3% increase respectively from 2017; total recreational vehicle registrations increased by 5% to reach 679,393; and a record number of units manufactured, with 23,070 recreational vehicles produced last year.

Despite these 38-year highs in terms of units manufactured and numbers of domestic caravan and camping visitors, disruptive market conditions poses a challenge to the industry. The economy continued to underpin the performance of Australia’s caravan and camping industry in 2018, with the Royal Commission into the banking sector, falling house prices, political uncertainty, low household savings and the fall in new car sales causing significant headwinds.

However, the high volume of domestic tourists who caravan and camp coupled with increased RV registrations, suggest the demand for the RV lifestyle remains strong, although the way in which these lifestyle is manifested is constantly changing. This highlights the robust nature of the industry and the increasing agility of business to respond to changes in consumer demand and ensure they are ahead of the curve in delivering consistent and high quality visitor experiences.

MANUFACTURING

2018 was a record breaking year for Australian RV manufacturing with 23,070 recreational vehicles manufactured in Australia for the year: a 38 year high

93% of Recreational Vehicles (RVs) manufactured in Australia were towable, with caravans comprising 64% of the towable market. This preference for towables has remained consistent over the past decade.

1-in-5 towable units produced were pop-tops (4137 units) while camper trailers made up 14% (3095 units). There is a continued trend towards longer towable product with 61% being longer than 6 metres, increasing from 33% in 2011

There were 1,630 motorised units (campervans & motorhomes) built in Australia in 2018. 65% of motorised RVs were between 6m and 9m in length, which has been consistent over the past decade.

IMPORTS

In 2018, there were 9937 caravan trailer units imported into Australia, a 9.1% increase from 2017.

A total of 91% of imports came from China. By marketshare, this has increased from 58% in 2013, with a large catalyst being the China-Australia Free Trade Agreement, ratified in December 2015. This removed a 5% tariff that existed on units of a caravan-trailer type.

Through 2018, there was a marked increase in the average weight and value of product being imported from China, indicating a changing nature of imports from high volume/low value to high volume/higher value.

REGISTRATIONS

Total registrations of RVs, driven by local manufacturing and a greater number of imports, grew by 4.95% to number 679,393 total RVs in 2018. This growth rate was more than double that of all passenger vehicles over the same period.

Queensland continues to have the most RV registrations with more than 180,000 registered, followed by Victoria (164,554 vehicles). On a per-capita basis, Tasmania has the highest rate of RV registrations with 39 RVs per 1000 people in the state. This figure is influenced by the high number of rental RVs in the state.

Comparing Australia to other countries around the world, Australia had one of the highest rates of new RV registrations in 2018 on a per capita basis. This is ahead of all European countries, and trailing just the USA.

DOMESTIC TRAVELLERS

2018 contained the largest number of domestic caravan/camping visitors in history and grew by 7.1% from 2017 figures.

These trips generated 53.5 million nights around Australia, with 90% of these spent in regional areas, outside of capital cities and the Gold Coast. Total visitor expenditure exceeded $8 billion for the year, highlighting the important part that the caravan/camping industry play in facilitating tourism to regional Australia.

Trips involving children made up 29% of all trips, highlighting that the family market continues to be the largest segment of caravan/camping visitors. However, there are also strong contributions from adult couples and groups travelling without children.

Looking at the breakdown by age, the 30-54 year market makes up 47% of all trips, followed by the 55+ market (29%) and the 20-29 year market (18%).

There has been solid growth from the younger markets (under 30s) in recent years, which has been fuelled by the increasing demand for experiential and, especially nature based travel.

A core challenge that surrounds the domestic market is their current lack of access to discretionary income which influences their ability to purchase in the RV industry. This is due to strong economic headwinds facing Australian households at the present time including low wage growth, high levels of household debt, record high levels of underemployment and falling house prices; which reduces the feeling of 'wealth' that Australian home owners currently have.

INTERNATIONAL TRAVELLERS

A total of 370,000 international visitors to Australia chose to integrate caravan/camping into their trip to Australia, spending 4.8 million nights around the country.

By country of residence, there were most visitors from the UK (58,933), however visitors from Germany spent the most nights caravan/camping (1 million) which was almost double the next market of France (598,000 nights). French visitors also had the longest length of stay (21.4 nights) ahead of German visitors (19.4 nights).

The largest segment by age for international caravan and camping visitors was the 20-29 year market, which accounted for 42% of trips and in line with the high number of backpackers that choose to go caravan and camping.

In recent years however, the number of backpackers coming to Australia has stagnated. This in turn has lead to an overall shorter average length of stay by international caravan and camping visitors as backpackers traditionally stay longer per trip.

Some major factors that have influenced international caravan/camping visitation to Australia have been a softening in core European markets in regard to total length of trip. This has resulted in arrivals spending more time close to their city of arrival and, as a result, spending less time in Australia's regions which has resulted in a shorter length of stay for all international visitors across regional areas.

Across all international visitors to Australia, less than 1 in 5 nights were spent outside of Capital Cities and the Gold Coast - the lowest share for regional Australia since records have been kept.

LOOKING AHEAD

With the Federal Election behind us and the RBA forecasting an interest rate cut in the near future, consumer and business confidence is expected to grow. This will give Australians greater confidence purchasing into the RV lifestyle as well as the security to take longer trips. Industry businesses will also need to continually adapt as the consumer changes in their wants and needs. The continual search of the traveller to have authentic

Date Sources: Tourism Research Australia (IVS & NVS), NEM Australiasia 2018, Australia Bureau of Statistics Motor Vehicle Census & International Merchandise Trade Data (2018).

Produced by the Caravan Industry Association of Australia, Research Team. Questions can be directed to research@caravanindustry.com.au.

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