Winnebago, maker of motorhomes, travel trailers and pleasure boats, did not have the best start to fiscal year 2025. The company reported today that its quarterly revenue was down 18% compared to the same time last year.

Winnebago said this was “driven primarily by lower unit volume and a reduction in average selling price per unit.” That’s investor-speak for selling fewer RVs, at lower prices. In its earnings presentation, the company pointed to a “challenging macroeconomic environment.”

In 2021, the RV business — like the economy as a whole — got hot. Consumers had cash to burn and the open road before them. So, they bought RVs. 

“Because people wanted to get away from everybody,” said David Whiston. He follows the RV industry for Morningstar.

At the end of 2021, Winnebago’s quarterly revenue hit record highs. But that didn’t last.

And across the industry, sales fell — and fell drastically — in the last couple of years.

“So that boom has … ended, and we’re waiting for the next cycle,” Whiston said.

He said many consumers are still holding tight to the steering wheels of their perfectly fine RVs they already have, which he said can cost from tens of thousands to more than a million dollars.

He said persistently high interest rates aren’t encouraging many would-be buyers to let go of their present vehicles. 

“We need more relief on that, I think, to encourage people to buy what could be a second or third home for them,” he said.

After all, people are still feeling jittery about the economy, which makes them pause before buying a new Winnebago — or any RV, he said. “I don’t want to say boom bust, but it’s definitely boom, and then some of the air coming out of the balloon, in a big way.”

The slowdown in RV sales shows that consumers are still reluctant to make major purchases because they don’t know what’s going to happen with the economy and how much disposable income they’ll have in the future.

“The way economists think about this, these are luxury goods. You know, an RV is something that you buy when you’re feeling economically confident. You have a little bit of extra money in your pocket,” said Michael Hicks, director of the Center for Business and Economic Research at Ball State University. “If you can’t afford now, you might hold off for a year or two.”

Hicks pointed out that when interest rates started to rise. This had the effect of depressing consumption and thereby reducing demand, which slowed inflation. 

“Increased interest rates over the past two years are designed to do precisely this, and we see them in action,” he said.

The Fed is now cutting rates — slowly. 

But RVs are still a big purchases, and Hicks said instead of buying one now, people might wait until interest rates drop again next year, making one more affordable.