Millennials can’t seem to get enough of recreational vehicles. Airstream’s tech-savvy RVs continue to sell through the roof as the outdoorsy, Instagram-obsessed generation looks to disconnect in the American wilderness, while still connecting to WiFi.
Airstream announced its fifth consecutive year of sales growth on Thursday. The company has seen a whopping 218 percent growth in sales over the past five years. This year, sales are up another 24 percent.
Millennials are driving that growth, according to Airstream president and chief executive officer Bob Wheeler. “They think that experiences, adventure, and people are what create real value in their life. And the RV is just a conduit for that lifestyle.” Forty-five percent of Airstreams customers last year purchased an RV for the first time, Wheeler added.
For most cash-strapped, debt-ridden youth, Airstream’s $149,9000 “Classic” RV remains out of reach. But the company’s lower-end travel trailers start at a more modest $36,900, and can be equipped with Bluetooth-controlled LED lighting and high-end hardwood finishes. These models have seen the greatest volume in growth, according to Wheeler. “Small is the new big,” he said. “Millennials are interested in the less intimidating, easier to use models like the Nest and the Basecamp.”
Airstream owners want to go off the beaten path—but not too far. The company partnered with AT&T in August to provide RVs with LTE connectivity and unlimited data. “We’ve set aside the idea that people want to disconnect fully,” Wheeler said. “Millennials want the option to connect when they need to.”
At a time when many U.S. automakers have moved production overseas, Airstream continues to expand domestically. The company grew its workforce from 269 employees in 2012 to more than 1,000 employees today at its factory in Jackson Center, Ohio. That facility itself is undergoing a $40 million expansion, which Wheeler expects to generate an additional 250 jobs in 2019.
Meanwhile, Airstream’s parent company Thor Industries Inc. agreed on Tuesday to buy German motor-home builder Erwin Hymer Group in a cash and stock deal valued at $2.5 billion—the company’s largest acquisition to date and its first move outside North America. The acquisition will bring Thor into European RV markets, many of which are already stronger than the United States.
Thor shares slid 10 percent in premarket trading on Thursday after the company missed earnings estimates. Fourth-quarter sales fell 3.1 percent from a year earlier to 1.87 billion.
While Airstream won’t be moving production overseas any time soon, the company does plan to increase international distribution. “The brand is not as well known in Europe or far East Asia, but there’s definitely a subculture of passionate enthusiasts there,” Wheeler said. “We want to crack China.”
International customers will come to appreciate the product’s American legacy, Wheeler believes. “Chinese buyers don’t want a ‘Made in China’ Airstream,” he said. “Our brand is ‘Made in America.”
©2018 Bloomberg L.P.