FAMILY VACATION COST COMPARISON

Transcription

1

2 FAMILY VACATION COST COMPARISON VACATIONS USING RECREATION VEHICLES COMPARED TO OTHER TYPES OF VACATIONS PREPARED FOR: RECREATION VEHICLE INDUSTRY ASSOCIATION RESTON, VIRGINIA PREPARED BY: PKF CONSULTING ALEXANDRIA, VIRGINIA

3 TABLE OF CONTENTS SECTION I: EXECUTIVE SUMMARY Objective I-1 Selected RV Types I-1 Findings I-2 Methodology I-5 Firm Qualifications I-7 SECTION II: COST COMPARISON Study Objective Study Parameters Findings Methodology Vacation Route Map Vacation Costs Cost of Vehicle Ownership Total Vacation Cost Calculation Other Vacation Alternatives Impact of Fluctuations in Fuel Cost s Conclusion II-1 II-1 II-3 II-9 II-11 II-13 II-24 II-28 II-37 II-37 II-38

4 SECTION I: EXECUTIVE SUMMARY EXECUTIVE SUMMARY OBJECTIVE PKF Consulting was commissioned by the Recreation Vehicle Industry Association (RVIA) to provide an objective comparison between the cost of a Summer 2008 vacation using recreation vehicles (RVs) and the cost of other types of vacations during that same period of time. An RV is defined as a motorized or towable vehicle that combines transportation and temporary living quarters for travel, recreation, and camping. SELECTED RV TYPES There are several different types of RVs available to consumers. For purposes of this analysis, PKF has selected four types of RVs that are typically used by families for vacation purposes. The four types of RVs are Folding Camping Trailer, Lightweight Travel Trailer, Type C Motorhome, and diesel-powered Type A Motorhome. Following is a brief description of each of these RV types, along with an illustration. Folding Camping Trailer A lightweight RV with collapsible sides for towing by typical family vehicles, even some compact cars. Set up, it provides kitchen, dining, sleeping, and often bathroom facilities for up to eight people. For the purposes of this study, we have assumed the average folding camping trailer will weigh approximately 2,000 pounds. I-1

5 SECTION I: EXECUTIVE SUMMARY Lightweight Travel Trailer Built to be towed by a car, van, or pickup, this RV provides kitchen, bathroom, dining, and living facilities. Sleeps up to ten people. For the purposes of this study, we have assumed the average lightweight travel trailer will weigh approximately 4,000 pounds. Type C Motorhome Built on an automotive-manufactured van frame with an attached cab section, this RV s living area is behind and above the cab. Typically sleeps up to eight people, and offers conveniences such as kitchen, bathroom, dining, and living facilities. Type A Motorhome The largest and most luxurious type of motorhome, built on a specially-designed frame. Typically sleeps up to six people, with living areas and amenities available for use throughout any trip. For the purposes of this study, diesel-powered Type A motorhomes were analyzed. I-2

6 SECTION I: EXECUTIVE SUMMARY FINDINGS In our Summer 2008 study, PKF found typical family RV vacations on average to be 27 percent to 61 percent less expensive on a per day basis than the other types of vacations analyzed (not including the cruise vacation). A list of the types of vacations, by mode of transport, and their costs is presented in Table 1 on page I-4. Type A diesel motorhome vacations were found to be slightly less expensive than air/hotel vacations, but more expensive than car/hotel and airline/rental unit home/condo vacations. It is significant to note that the data used in this analysis factored in vehicle ownership costs. In many cases, the RV vacations were more economical than the other vacations analyzed, regardless of trip duration, trip distance, or region of the country where the vacation takes place. Including ownership costs: The average cost per day of the camping vacation using a folding camping trailer was found to be about 45 percent less expensive than the cost of comparable* car/hotel combination vacations; about 61 percent less than the cost of a comparable air/hotel vacation; and about 47 percent less than the cost of the comparable air/rental home or condo vacation. The average cost per day of the camping vacation using a lightweight travel trailer was found to be about 37 percent less expensive than the cost of comparable* car/hotel combination vacations; about 55 percent less than the cost of a comparable air/hotel vacation; and about 39 percent less than the cost of the comparable air/rental home or condo vacation. The average cost per day of the camping vacation using a Type C motorhome was found to be about 27 percent less expensive than the cost of comparable* car/hotel combination vacations; about 48 percent less than the cost of a comparable air/hotel vacation; and about 29 percent less than the cost of the comparable air/rental home or condo vacation. The average cost per day of the camping vacation using a diesel Type A motorhome was found to be about 31 percent more expensive than the cost of comparable* car/hotel combination vacations; about 7 percent less than the cost of a comparable air/hotel vacation; and about 28 percent more than the cost of the comparable air/rental home or condo vacation. In addition, the 2008 study found the most expensive camping vacation to be approximately 54 percent less expensive than the cost of a budget cruise getaway. * In all comparisons, comparable means vacations having the same number of days and miles, rather than vacations offering equivalent amenities. I-3

7 SECTION I: EXECUTIVE SUMMARY Table 1 Cost Comparison of Vacations Using Recreation Vehicles Versus Other Types of Vacations Vacation Mode of Travel 3 Days 7 Days 10 Days 14 Days Family traveling in personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites. Family traveling in light-duty truck/suv, towing their travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites. Family traveling in a personal motorhome (Type C), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in a personal motorhome (Diesel Type A), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling in a personal car or airline (as appropriate), staying at a rental house/condominium, and eating the majority of meals in the rental unit. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Family traveling to and taking a cruise from Orlando (7-day vacation) and incurring transportation cost to and from staging area. Source: PKF Consulting, 2008 Survey $652 $1,439 $2,050 $2,994 $730 $1,658 $2,359 $3,449 $837 $1,940 $2,761 $3,937 $1,512 $3,490 $4,975 $7,038 $1,052 $2,684 $3,876 $5,358 $1,709 $2,983 $3,764 $4,884 $1,949 $3,828 $5,339 $7,187 N/A $7,544 N/A N/A Impact of Fluctuations in Fuel Costs It is significant to point out the volatility in fuel prices in the current world market, often on a day-to-day basis. PKF has considered the impact of fluctuations in fuel costs on our findings by testing theoretical increases in fuel costs in one of our hypothetical vacations. It is significant to note that fluctuations in fuel costs economically impact all of the vacation types analyzed, both RV and non-rv vacations, to varying degrees. For this analysis, we have utilized the 10-day vacation from Phoenix to Napa as an example. We have conducted this analysis on projected increases of 25, 50, 100, 150, 200, 250, 300, 350, and 400 percent in fuel costs. The following table presents the results of this analysis. I-4

8 SECTION I: EXECUTIVE SUMMARY As the data indicates, while fuel costs are a component of the overall vacation cost, it is not significant enough to materially affect the outcome of our analysis. It would take between a 100 percent and 150 percent increase (approximately 125 percent) in fuel costs for a Type C Motorhome vacation to be more expensive than the least expensive non-rv vacation. Furthermore, it would take between a 200 percent and 250 percent increase (approximately 240 percent) in fuel costs for the Lightweight Travel Trailer vacation to be more expensive than the least expensive non-rv vacation. Additionally, as the data shows, none of the fuel increase scenarios utilized results in the Folding Camping Trailer vacation being more expensive than the least expensive non-rv vacation. For this 10-day vacation from Phoenix to Napa, the average fuel cost per gallon at the time of our research was $3.63 for regular gasoline and $4.27 for diesel. Regular unleaded gasoline for a rental car was calculated using the cost of fuel for the destination city, or $3.87 per gallon. Based on the above analysis, fuel costs would have to average approximately $8.18 per gallon for a Type C Motorhome vacation to exceed the cost of an air/rental home or condo vacation (the least expensive non-rv vacation for this trip duration). Furthermore, fuel costs would have to average approximately $12.36 per gallon for a Lightweight Travel Trailer vacation to be more expensive than the least expensive non-rv vacation, and fuel costs would have to average approximately $22.71 per gallon for a Folding Camping Trailer vacation to be more expensive than the least expensive non-rv vacation. We are of the opinion that fuel costs will likely not approach these levels in the foreseeable future. As such, RV vacations tend to be significantly less expensive than the non-rv vacation types, with the exception of the diesel-powered Type A motorhome vacations in comparison with those by car. Therefore, price spikes in fuel costs should not adversely affect the decision on whether or not a family takes an RV vacation versus other types of vacations. It is significant to note that while our example utilizes a 10-day vacation for illustrative purposes, the findings are generally the same regardless of vacation duration with regard to increases in fuel costs. METHODOLOGY The hypothetical travel party used in the vacation cost analysis was a family composed of a mother, father, and their two children one child under 12 years of age and one child over 12 years of age. I-5

9 SECTION I: EXECUTIVE SUMMARY PKF analyzed major costs that would be incurred by the family of four taking eight different types of vacations including round-trip transportation to nine popular vacation destinations. For each destination, we have analyzed vacations of 3-, 7-, 10-, and 14- day durations, where appropriate. Data was collected during April and May 2008, and it was assumed that all vacations would take place during June 2008 (after school lets out for the summer break). The eight types of vacations used in the analysis varied principally by mode of transportation and type of accommodations and meal plan used, as summarized below: 1. Family traveling in personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites. 2. Family traveling in light-duty truck/suv, towing their travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites. 3. Family traveling in a personal motorhome (Type C), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. 4. Family traveling in a personal motorhome (diesel-powered Type A), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. 5. Family traveling in personal car, staying at hotels/motels, and eating meals in restaurants. 6. Family traveling in a personal car or airline (as appropriate), staying at a rental house/condominium, and eating the majority of meals in the rental unit. 7. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. 8. Family traveling to and taking a cruise from Orlando (7-day vacation) and incurring transportation costs to and from staging area. Costs analyzed were the major cash or credit outlays that are required from the time a hypothetical vacation begins to the time it ends. The foregoing would include: fuel costs; round-trip airfare costs; restaurant meal costs; grocery costs; rental car costs; rental house/condominium costs; cruise ship vacation costs; campsite costs; and hotel/motel costs. PKF used the most recent fuel cost data available for each state at the time of our research. It has been assumed that any rise in fuel costs would affect all modes of transportation proportionately. Incidental expenses such as entertainment, shopping, and the like, were not considered because they would not likely vary by mode of transportation or type of accommodations used during a vacation. We have also factored in an estimated cost of ownership of the applicable RV equipment that was based upon assumptions regarding average ownership periods, residual values, annual days of utilization, insurance and other costs of ownership, as well as any applicable tax benefits. The cost of personal vehicle ownership was not included. It is assumed that most families will own a personal vehicle for general day-to-day use, and not specifically for vacation use. I-6

10 SECTION I: EXECUTIVE SUMMARY For this analysis we have selected popular vacation destinations throughout the country and various points of origin. An appropriate number of intermediate cities or towns were selected between the origin and destination locations. Vacation durations are 3, 7, 10, and 14 days and are directly related to the round-trip distances in highway miles between each city-pair. We coordinated selections of the foregoing city-pairs with RVIA to ensure that proper focus has been given to highly popular RV destinations. Before issuing this report, PKF was notified of RVIA s concurrence with selected city-pairs. To complete the analysis, PKF calculated the average total cost (excluding incidental costs, as noted above) that the family would incur during each type of vacation (3, 7, 10, and 14 days). FIRM QUALIFICATIONS PKF Consulting is a management consulting firm with a network of ten primary offices located throughout the continental United States and is a member of Pannell Kerr Forster Worldwide, a network that includes over 250 affiliated offices in 75 countries around the world. PKF serves clients worldwide, with a staff that consists of nearly 100 professional consultants and specialists. PKF has over 90 years of experience and recognition in all phases of professional assistance and counsel to service industries and specifically to the tourism, hospitality, and recreation industries. The Alexandria, Virginia office of PKF Consulting prepared this study. I-7

11 COST COMPARISON SECTION II: COST COMPARISON STUDY OBJECTIVE PKF Consulting was commissioned by the Recreation Vehicle Industry Association (RVIA) to provide an objective comparison between the cost of a Summer 2008 vacation using recreation vehicles (RVs) and the cost of other types of vacations during that same period of time. STUDY PARAMETERS Data was collected during April and May 2008, and it was assumed that all vacations would take place during June Costs analyzed were the major cash or credit outlays that are required from the time a hypothetical vacation begins to the time it ends. The foregoing would include: fuel costs; round-trip airfare costs; restaurant meal costs; grocery costs; rental car costs; rental house/condominium costs; cruise ship vacation costs; campsite costs; and hotel/motel costs. PKF used most recent fuel cost data available for each state at the time of our research. It has been assumed that any rise in fuel costs would affect all modes of transportation proportionately. Incidental expenses such as entertainment, shopping, and the like, were not considered because they would not likely vary by mode of transportation or type of accommodations used during a vacation. We have also factored in an estimated cost of ownership of the applicable RV equipment that was based upon assumptions regarding average ownership periods, residual values, annual days of utilization, insurance and other costs of ownership, as well as any applicable tax benefits. The cost of personal vehicle ownership was not included. It is assumed that most families will own a personal vehicle for general day-to-day use, and not specifically for vacation use. Only vacations within the continental United States were analyzed. An exception was made for the Alaska cruise vacation, which included debarkation at Vancouver, Canada, and air transportation to Seattle. The analysis excluded Hawaii and other U.S. territories. A vacation is defined as a non-work-related time period. We have assumed that vacation implies voluntary travel for rest and recreation. Vacations that include overnight stays in the homes of friends and relatives of the traveling party were not analyzed in this study. For this analysis, we have defined vacations as journeys to places at least 200 miles away from the traveling party s normal residence. We have assumed that these vacations involve a minimum of one night away from that normal residence. II-1

12 Based upon recommendations by the American Automobile Association (AAA) we have assumed that the traveling party would drive no more than 300 miles per day, plus an additional average highway distance of 50 miles per day for sightseeing excursions. The hypothetical travel party used in the vacation cost analysis was a family composed of a mother, father, and their two children one child under 12 years of age and one child over 12 years of age. Since the objective was to compare the cost of a family vacation, we selected the aforementioned hypothetical travel party for our analysis. Our decision to have one child under 12 years of age and one over 12 years of age was related to the adult/child designation used by many hotels, campgrounds, and other relevant establishments. PKF analyzed major costs that would be incurred by the family of four taking eight different types of vacations including round-trip transportation to eight popular vacation destinations. For each destination, we have analyzed vacations of 3-, 7-, 10-, and 14-day durations, where appropriate. The eight types of vacations used in the analysis varied principally by mode of transportation and type of accommodations and meal plan used, as described in the following table. Vacation Type Code A. B. C. D. E. F. G. H. Source: PKF Consulting, 2008 Survey Table 3 Eight Vacation Types Analyzed in the Cost Comparison Study Description of Vacation Type Family traveling in personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites. Family traveling in light-duty truck/suv, towing their travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites. Family traveling in a personal motorhome (Type C), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in a personal motorhome (Type A diesel), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling in a personal car or airline (as appropriate), staying at a rental house/condominium, and eating the majority of meals in the rental unit. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Family traveling to and taking a cruise from Orlando (7-day vacation) and incurring transportation costs to and from staging area. II-2

13 There are several different types of RVs available to consumers. For purposes of this analysis, PKF has selected four types of RVs that are typically used by families for vacation purposes. The four types of RVs are Folding Camping Trailer, Lightweight Travel Trailer, Type C Motorhome, and Type A Motorhome. Following is a brief description of each. - Folding Camping Trailer A lightweight RV with collapsible sides for towing by typical family vehicles, even some compact cars. Set up, it provides kitchen, dining, sleeping, and often bathroom facilities for up to eight people. For the purposes of this study, we have assumed the average folding camping trailer will weigh approximately 2,000 pounds. - Lightweight Travel Trailer Built to be towed by a car, van, or pickup, this RV provides kitchen, bathroom, dining, and living facilities. Sleeps up to ten people. For the purposes of this study, we have assumed the average lightweight travel trailer will weigh approximately 4,000 pounds. - Type C Motorhome Built on an automotive-manufactured van frame with an attached cab section, this RV s living area is behind and above the cab. Typically sleeps up to eight people, and offers conveniences such as kitchen, bathroom, dining, and living facilities. - Type A Motorhome The largest and most luxurious type of motorhome, built on a specially-designed frame. Typically sleeps up to six people, with living areas and amenities available for use throughout any trip. For the purposes of this study, diesel powered Type A motorhomes were analyzed. FINDINGS In our Summer 2008 study, PKF found typical family RV vacations on average to be 27 percent to 61 percent less expensive than the other types of vacations analyzed. Type A motorhome vacations were found to be slightly less expensive than air/hotel vacations but more expensive than car/hotel and airline/rental unit vacations. It is significant to note that the data used in this analysis factored in vehicle ownership costs. In many cases, the RV vacations were more economical than the other vacations analyzed, regardless of trip duration, trip distance, or region of the country where the vacation takes place. Including ownership costs, the average cost per day of the camping vacation using a folding camping trailer was found to be about 45 percent less expensive than the cost of comparable* car/hotel combination vacations; about 61 percent less than the cost of a comparable air/hotel vacation; and about 47 percent less than the cost of the comparable air/rental home or condo vacation. The average cost per day of the camping vacation using a lightweight travel trailer was found to be about 37 percent less expensive than the cost of comparable* car/hotel combination vacations; about 55 percent less than the cost of a comparable air/hotel vacation; and about 38 percent less than the cost of the comparable air/rental home or condo vacation. * In all comparisons, comparable means vacations having the same number of days and miles, rather than vacations offering equivalent amenities. II-3

14 The average cost per day of the camping vacation using a Type C motorhome was found to be about 27 percent less expensive than the cost of comparable* car/hotel combination vacations; about 48 percent less than the cost of a comparable air/hotel vacation; and about 29 percent less than the cost of the comparable air/rental home or condo vacation. The average cost per day of the camping vacation using a diesel-powered Type A motorhome was found to be about 31 percent more expensive than the cost of comparable* car/hotel combination vacations; about 7 percent less than the cost of a comparable air/hotel vacation; and about 28 percent more than the cost of the comparable air/rental home or condo vacation. Additional Benefits Not Analyzed Many reasons for RV vacationers loyalty go beyond the scope of this study, including the following points: RV ownership provides benefits that go well beyond people s desire for affordability. Specifically, it allows families a unique travel experience that offers family appeal for those seeking to foster an increased sense of togetherness, control, flexibility, and convenience to travel whenever and wherever desired, comfort, the lure of the outdoors, and versatility for a variety of uses. An analysis of the ongoing benefits of RV ownership (excluding expenditure costs for the analysis of selected vacations), such as transportation to sporting events, or even the use of an RV as an extra bedroom/apartment, fell beyond the scope of the engagement. PKF did not attempt to compare the quality of RV vs. other vacation types. Obviously, riding in a jet from an origin city in several hours is a far different experience than driving a motorhome at a leisurely pace between the vacation origin and destination, sightseeing along the way. Similarly, cruise ship vacations offer different experiences. Although qualitative advantages to RV vacations such as family appeal and flexibility and convenience to travel whenever and wherever one desires were commonly cited by RV owners as distinct over other vacations, further analysis of these qualitative advantages fell beyond the scope of this study. The list of benefits provided by RV ownership are attractive to families entering the RV market and empty nesters in that both of these segments are seeking value for their dollar. In the case of some new entrants, typically the budgetary constraints of raising a family coupled with the trend of taking shorter vacations close to home match quite well with a desire to experience a cost conscious family vacation with few hassles. In the case of retirees, much of this segment shares a desire to travel constrained by the realities of living on a fixed income demanding frugality. Again, RV ownership provides an attractive choice for meeting all of these requirements. II-4

15 Cost Comparison Summary Several modes of travel are now vying for the vacationer s dollars, including cruises. The relative costs of competitive options were explored under a hypothetical case study basis in this study. Solely with regard to cost, these competitive offerings still require greater expenditure from vacationers, and typically offer fixed, one-time-only vacations. As mentioned earlier, qualitative comparisons of each vacation type fell beyond the scope of this engagement. Data on the cost of vacation types by destination city are presented in Tables 5a through 5h on pages II-6 through II-8. As seen in the tables, camping vacations using folding camping trailers, travel trailers, and Type C motorhomes were typically the most economical types of vacations among those studied, regardless of the region or regions within which the vacations occurred. Table 4 Cost Comparison of Vacations Using Recreation Vehicles Versus Other Types of Vacations Vacation Mode of Travel 3 Days 7 Days 10 Days 14 Days Family traveling in personal car, towing their folding camping trailer, staying at campgrounds, and preparing all meals in the folding camping trailer or outdoors at campsites. Family traveling in light-duty truck/suv, towing their travel trailer, staying at campgrounds, and preparing all meals in the trailer or outdoors at campsites. Family traveling in a personal motorhome (Type C), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in a personal motorhome (Type A diesel), staying at campgrounds, and preparing all meals in the motorhome or outdoors at campsites. Family traveling in personal car, staying at hotels/motels, and eating meals in restaurants. Family traveling in a personal car or airline (as appropriate), staying at a rental house/condominium, and eating the majority of meals in the rental unit. Family traveling by airline, renting a car at the destination, staying at hotels/motels, and eating meals in restaurants. Family traveling to and taking a cruise from Orlando (7-day vacation) and incurring transportation cost to and from staging area. Source: PKF Consulting, 2008 Survey $652 $1,439 $2,050 $2,994 $730 $1,658 $2,359 $3,449 $837 $1,940 $2,761 $3,937 $1,512 $3,490 $4,975 $7,038 $1,052 $2,684 $3,876 $5,358 $1,709 $2,983 $3,764 $4,884 $1,949 $3,828 $5,339 $7,187 N/A $7,544 N/A N/A II-5

16 Table 5a Cost Comparison of Vacations by Type: Branson, MO Vacation Type/Transport Mode/Accommodation Chicago to Minneapolis to Branson Branson Car/Folding Camping Trailer $1,506 $1,971 $2,441 SUV/Lightweight Travel Trailer $1,733 $2,270 $2,798 Type C Motorhome $1,983 $2,689 $3,587 Type A Motorhome (diesel) $3,526 $4,907 $6,700 Personal Car/Motels or Hotels $2,360 $3,025 $4,058 Airline/Rental Car/Motels or Hotels $4,024 $4,776 $5,638 Airline/Rental Car/Rental Home or Condo $3,713 $4,402 $5,190 Duration of Vacation 7 days 10 days 14 days Minneapolis to Branson Table 5b Cost Comparison of Vacations by Type: Dennis Port, MA Washington, DC Washington, DC Columbus to Vacation Type/Transport Mode/Accommodation to Dennis Port to Dennis Port Dennis Port Car/Folding Camping Trailer $1,472 $1,864 $2,721 SUV/Lightweight Travel Trailer $1,696 $2,132 $3,115 Type C Motorhome Type A Motorhome (diesel) $1,964 $3,530 $2,679 $4,918 $3,809 $6,949 Personal Car/Motels or Hotels $3,033 $4,296 $5,937 Airline/Rental Car/Motels or Hotels Airline/Rental Car/Rental Home or Condo $4,188 $2,685 $5,595 $3,406 $7,316 $4,211 Duration of Vacation 7 days 10 days 14 days Table 5c Cost Comparison of Vacations by Type: Grand Canyon, AZ Salt Lake City to Denver to Dallas to Vacation Type/Transport Mode/Accommodation Grand Canyon Grand Canyon Grand Canyon Car/Folding Camping Trailer $1,241 $2,060 $3,720 SUV/Lightweight Travel Trailer $1,423 $2,383 $4,310 Type C Motorhome Type A Motorhome (diesel) $1,801 $3,363 $2,722 $4,939 $4,346 $7,424 Personal Car/Motels or Hotels $2,257 $3,827 $5,613 Airline/Rental Car/Motels or Hotels Airline/Rental Car/Rental Home or Condo $4,070 $3,745 $4,804 $4,359 $6,559 $5,954 Duration of Vacation 7 days 10 days 14 days II-6

17 Table 5d Cost Comparison of Vacations by Type: Lancaster, PA Vacation Type/Transport Mode/Accommodation Pittsburgh to Lancaster Car/Folding Camping Trailer $632 SUV/Lightweight Travel Trailer $730 Type C Motorhome Type A Motorhome (diesel) $837 $1,512 Personal Car/Motels or Hotels $1,053 Airline/Rental Car/Motels or Hotels Airline/Rental Car/Rental Home or Condo $1,726 $1,550 Duration of Vacation 3 days Table 5e Cost Comparison of Vacations by Type: Napa, CA Vacation Type/Transport Mode/Accommodation Portland to Phoenix to Napa Napa Denver to Napa Car/Folding Camping Trailer $1,571 $2,196 $3,156 SUV/Lightweight Travel Trailer $1,823 $2,536 $3,646 Type C Motorhome Type A Motorhome (diesel) $2,040 $3,751 $2,871 $5,069 $4,041 $7,123 Personal Car/Motels or Hotels $3,293 $4,575 $6,059 Airline/Rental Car/Motels or Hotels Airline/Rental Car/Rental Home or Condo $3,857 $3,072 $5,706 $3,748 $7,894 $5,129 Duration of Vacation 7 days 10 days 14 days Table 5f Cost Comparison of Vacations by Type: New Orleans, LA Nashville to New Vacation Type/Transport Mode/Accommodation Orleans Car/Folding Camping Trailer $1,467 $2,050 SUV/Lightweight Travel Trailer $1,687 $2,357 Type C Motorhome $1,945 $2,762 Type A Motorhome (diesel) $3,493 $4,971 Personal Car/Motels or Hotels $2,604 $3,766 Airline/Rental Car/Motels or Hotels $3,666 $4,683 Airline/Rental Car/Rental Home or Condo $2,590 $3,764 Duration of Vacation 7 days 10 days Charlotte to New Orleans II-7

18 Table 5g Cost Comparison of Vacations by Type: Orlando, FL Vacation Type/Transport Mode/Accommodation Atlanta to Richmond to Cincinnati to Orlando Orlando Orlando Car/Folding Camping Trailer $1,378 $2,156 $2,931 SUV/Lightweight Travel Trailer $1,583 $2,476 $3,377 Type C Motorhome Type A Motorhome (diesel) $1,908 $3,455 $2,842 $5,048 $3,901 $6,995 Personal Car/Motels or Hotels $2,556 $3,768 $5,121 Airline/Rental Car/Motels or Hotels Airline/Rental Car/Rental Home or Condo $3,164 $2,092 $4,460 $2,903 $6,141 $3,937 Duration of Vacation 7 days 10 days 14 days Table 5h Cost Comparison of Vacations by Type: Traverse City, MI Vacation Type/Transport Mode/Accommodation Detroit to Traverse City Car/Folding Camping Trailer $672 SUV/Lightweight Travel Trailer $779 Type C Motorhome Type A Motorhome (diesel) $862 $1,522 Personal Car/Motels or Hotels $1,052 Airline/Rental Car/Motels or Hotels Airline/Rental Car/Rental Home or Condo $2,172 $1,869 Duration of Vacation 3 days II-8

19 METHODOLOGY Choosing Location of Vacations One of PKF s objectives was to analyze vacation costs across the United States so that the average vacation costs calculated for the study would include regions with high costs as well as regions with lower costs, if such cost variations did exist. To analyze the vacation costs by region of the United States, PKF selected popular vacation destinations throughout the continental United States. PKF also selected origin points throughout the United States. Selections were based upon travel distance and the availability of commercial air service. Since travel by ground transportation modes was to be compared with air transportation, the distance between city pairs was made large enough so that flying would be a realistic alternative mode of transportation for the hypothetical travel party. Using the eight selected destination cities and appropriate origin points resulted in 19 different vacations/trips. Each vacation was assigned a specific trip duration. In the analysis, vacations ranged from 3 to 14 nights and were related to the round-trip distance in highway miles between the origin and destination cities. We assumed that all trips took place during the month of June 2008 and began on a Friday or Saturday. The base round-trip mileage between the city-pairs (not including sightseeing excursions) ranged from a low of 474 miles to a high of 3,469 miles. However, for each day of the round-trip vacations, 50 additional miles were added to the base mileage for sightseeing or side trips. In Table 6 on Page II-10, we have presented a list of the citypairs used in our analysis, the base round-trip highway mileage for each vacation, the trip duration for each, and the total round-trip mileage traveled during each of the vacations (includes sightseeing excursions for each day). A map illustrating the trips is presented on Page II-11. After the origin and destination points were chosen, locations between the pairs where the travel party would stay overnight were chosen for those city-pairs located more than 300 miles apart. We assumed that the hypothetical travel party using either an automobile or RV would travel less than 300 miles a day while en route to its destination. We based this assumption on the AAA recommendation that the average motorist should travel no more than 300 miles per day, or 7.5 hours travel time including stops for fuel and refreshment, to avoid fatigue. The origin city, destination city, and inbetween cities/towns selected for each of the 19 vacation trips are presented in Table 7 on Page II-10. A total of 36 cities or towns were selected as stopover or destination points, where the travel party would seek campgrounds, hotels, or motels to stay at least one night. In most cases, overnight accommodations were available in the city or town or within a 10- mile drive. The 36 cities or towns are listed in Table 8 on Page II-12, and includes the eight destination cities, as well as the 28 stopover points between the city pairs. II-9

20 Table 6 City Pairs Used in Vacation Cost Comparison City Pair Base Round-trip Mileage Total Round-trip Mileage Duration of Trip (days) Chicago, IL - Branson, MO 1,105 1,455 7 Minneapolis, MN - Branson, MO 1,394 1, Minneapolis, MN - Branson, MO 1,394 2, Washington, DC - Dennis Port, MA 1,060 1,410 7 Washington, DC - Dennis Port, MA 1,060 1, Columbus, OH - Dennis Port, MA 1,675 2, Salt Lake City, UT - Grand Canyon, AZ 742 1,092 7 Denver, CO - Grand Canyon, AZ 1,614 2, Dallas, TX - Grand Canyon, AZ 3,469 4, Pittsburgh, PA - Lancaster, PA Portland, OR - Napa, CA 1,221 1,571 7 Phoenix, AZ - Napa, CA 1,654 2, Denver, CO - Napa, CA 2,501 3, Nashville, TN - New Orleans, LA 1,074 1,424 7 Charlotte, NC - New Orleans, LA 1,440 1, Atlanta, GA - Orlando, FL 898 1,248 7 Richmond, VA - Orlando, FL 1,550 2, Cincinnati, OH - Orlando, FL 2,138 2, Detroit, MI - Traverse City, MI Table 7 Vacations (1) : Origin City, Cities/Towns En Route, and Destination City 1. Chicago, IL St. Louis, MO Branson, MO 2. Minneapolis, MN Winterset, IA El Dorado Springs, MO Branson, MO 3. Washington, DC Stony Point, NY Dennis Port, MA 4. Columbus, OH Breezewood, PA Stony Point, NY Dennis Port, MA 5. Salt Lake City, UT Hurricane, UT Grand Canyon, AZ 6. Denver, CO Montrose, CO Kayenta, AZ Grand Canyon, AZ 7. Dallas, TX Big Spring, TX Ruidoso, NM Grants, NM Williams, AZ Grand Canyon, AZ 8. Pittsburgh, PA Lancaster, PA 9. Portland, OR Yreka, CA Napa, CA 10. Phoenix, AZ Lake Havasu City, AZ Kettleman City, CA Napa, CA 11. Denver, CO Rawlins, WY Salt Lake City, UT Battle Mountain, NV Reno, NV Napa, CA 12. Nashville, TN Tuscaloosa, AL New Orleans, LA 13. Charlotte, NC Palmetto, GA Creola, AL New Orleans, LA 14. Atlanta, GA Lake City, FL Orlando, FL 15. Richmond, VA Florence, SC Callahan, FL Orlando, FL 16. Cincinnati, OH Sweetwater, TN Thomson, GA Jennings, FL Orlando, FL 17. Detroit, MI Traverse City, MI Note: (1) Vacations begin with origin city and end with destination. Return trip assumed to be same route. Origin and destination cities are in bold. Source: PKF Consulting II-10

21 II-11

22 Alabama Creola Tuscaloosa Table 8 Cities Surveyed for Hotel/Motel and Campground Rate Data Arizona Grand Canyon Kayenta Lake Havasu City Williams California Kettleman City Napa Yreka Colorado Montrose Florida Callahan Jennings Lake City Orlando Georgia Palmetto Thomson Iowa Winterset Lousiana New Orleans Massachusetts Dennis Port (Cape Cod) Source: PKF Consulting, 2008 Survey Michigan Traverse City Missouri Branson El Dorado Springs St. Louis New Mexico Grants Ruidoso Nevada Battle Mountain Reno New York Stony Point Pennsylvania Breezewood Lancaster South Carolina Florence Tennessee Sweetwater Texas Big Spring Utah Hurricane Wyoming Rawlins II-12

23 VACATION COSTS As stated previously, the major vacation cost categories analyzed in the study were fuel costs; round-trip airfare costs; restaurant meal costs; grocery costs; rental car costs; cruise ship vacation costs; campsite costs; vacation rental home/condominium costs; and hotel/motel costs. Transportation Costs Transportation costs analyzed can be classified as follows: Fuel cost of personally owned or rental vehicles operated by member of the hypothetical travel party (RVs, RV tow vehicles, and personal cars). Round-trip airfare cost of commercial transportation systems used by the hypothetical travel party between the origin and destination cities. The cost of renting a mid-size automobile in or near each of the destination cities, as applicable. The per mile cost of operating a personal vehicle, excluding fuel and oil costs (based on standard allowable deduction figures provided by the IRS). Turnpike tolls were not included as a transportation cost because they were not considered a major cost which would make one mode of transportation less economically viable than another. In general, a hypothetical travel party using a motorhome or towing a trailer could, depending where the vacation took place, have to pay more in tolls than a travel party using only an automobile as its mode of transportation. Obviously, those travelers using commercial air service would not have to pay turnpike tolls until some time after they rented an automobile at the destination city. Round-trip airfare data was collected for each of the selected vacations. PKF considered likely travel patterns associated with 3-, 7-, 10-, and 14-day vacations when determining average airfare costs, as sometimes airfare may differ slightly depending upon day of week arrival/departure patterns. Airfare data was collected for round-trip, coach fares through the Internet ( PKF considered the lowest fare available via the Internet at the time of our fieldwork (April and May 2008). It should be noted that airfares change quite frequently, and therefore the quoted rates may no longer be available as of the issuance of this report. All hypothetical travel dates were selected during the month of June Therefore, we have assumed that a hypothetical travel party would purchase airline tickets up to two months in advance of the anticipated departure date. We have presented airfare data in the following table. II-13

24 Origin Destination Table 9 Airfare Survey Trip Duration Date of Departure Date of Return Average Fare per Traveler Total Airfare per Travel Party Chicago, IL Branson, MO (Springfield) 7 June 13 June 19 $565 $2,260 Minneapolis, MN Branson, MO (Springfield) 10 June 13 June 22 $565 $2,260 Minneapolis, MN Branson, MO (Springfield) 14 June 13 June 26 $533 $2,132 Washington, DC Dennis Port, MA (Hyannis) 7 June 13 June 19 $339 $1,356 Washington, DC Dennis Port, MA (Hyannis) 10 June 13 June 22 $368 $1,472 Columbus, OH Dennis Port, MA (Hyannis) 14 June 13 June 26 $359 $1,436 Salt Lake City, UT Grand Canyon, AZ (Flagstaff) 7 June 13 June 19 $495 $1,980 Denver, CO Grand Canyon, AZ (Flagstaff) 10 June 13 June 22 $435 $1,740 Dallas, TX Grand Canyon, AZ (Flagstaff) 14 June 13 June 26 $553 $2,212 Pittsburgh, PA Lancaster, PA 3 June 13 June 15 $232 $928 Portland, OR Napa, CA (Oakland) 7 June 13 June 19 $183 $732 Phoenix, AZ Napa, CA (Oakland) 10 June 13 June 22 $277 $1,108 Denver, CO Napa, CA (Oakland) 14 June 13 June 26 $333 $1,332 Nashville, TN New Orleans, LA 7 June 13 June 19 $226 $904 Charlotte, NC New Orleans, LA 10 June 13 June 22 $327 $1,308 Atlanta, GA Orlando, FL 7 June 13 June 19 $206 $824 Richmond, VA Orlando, FL 10 June 13 June 22 $275 $1,100 Cincinnati, OH Orlando, FL 14 June 13 June 26 $333 $1,332 Detroit, MI Traverse City, MI 3 June 13 June 15 $342 $1,368 Source: PKF Consulting In our analysis, the hypothetical travel party using air transportation to travel from the origin to the destination city rented a standard, mid-size automobile on arrival in the destination city (or closet airport). We have assumed that the travel party drove the rental car an average of 50 miles per day during the days spent in the destination city. The rental cost of a standard, mid-size rental car was obtained through the Internet (travelocity.com). Collision damage waiver fees, personal accident insurance fees, and additional insurance fees were not included in the cost calculation because these costs are not mandatory. Presented in Table 10 are the rental car costs used in the cost comparison analysis. II-14

25 Table 10 Car Rental Fee Survey Renting Location Trip Date of Date of Total Rental Duration Departure Return Charge Branson, MO (Springfield) 7 June 13 June 19 $ Branson, MO (Springfield) 10 June 13 June 22 $ Branson, MO (Springfield) 14 June 13 June 26 $ Dennis Port, MA (Hyannis) 7 June 13 June 19 $ Dennis Port, MA (Hyannis) 10 June 13 June 22 $ Dennis Port, MA (Hyannis) 14 June 13 June 26 $ Grand Canyon, AZ (Flagstaff) 7 June 13 June 19 $ Grand Canyon, AZ (Flagstaff) 10 June 13 June 22 $ Grand Canyon, AZ (Flagstaff) 14 June 13 June 26 $ Lancaster, PA 3 June 13 June 15 $82.27 Napa, CA (Oakland) 7 June 13 June 19 $ Napa, CA (Oakland) 10 June 13 June 22 $ Napa, CA (Oakland) 14 June 13 June 26 $ New Orleans, LA 7 June 13 June 19 $ New Orleans, LA 10 June 13 June 22 $ Orlando, FL 7 June 13 June 19 $ Orlando, FL 10 June 13 June 22 $ Orlando, FL 14 June 13 June 26 $ Traverse City, MI 3 June 13 June 15 $81.64 Source: PKF Consulting Fuel costs were calculated for all vehicles the hypothetical travel party used. The fuel consumption (i.e. gallons) of the various vehicles was calculated first. The mileage traveled during each vacation, or in and around the destination city (rental car), was divided by miles per gallon (MPG) estimated for the various vehicle types. In the case of rental cars, the average fuel mileage of models commonly rented was calculated. MPG estimates were derived from the fuel mileage ratings prepared by the U.S. Environmental Protection Agency (EPA). The EPA ratings model presents city and highway MPG estimates for nearly all vehicle makes and models. We have assumed rental cars will be model year Table 11 details our MPG calculation for rental cars. II-15

26 Table 11 Fuel Economy of Typical Mid-Size Rental Cars Make and Model (1) Average MPG (2) Dodge Avenger 22.3 Chrysler Sebring 22.3 Chevrolet Cobalt 27.1 Pontiac G Mazda Average Mid-Size Rental Car 23.4 Notes: (1) Vehicle makes and models selected based upon inventory of national car rental companies. (2) Average MPG based on average of all available 2008 models Source: Environmental Protection Agency (EPA) Fuel Mileage Ratings In order to determine fuel mileage economy for personal vehicles, PKF used data from the U.S. Department of Transportation Revised Summary of Fuel Economy Performance, dated January 15, 2008, which reports domestic and import passenger car and light truck fuel economy averages for the model years We assumed that model year 2005 would represent the majority of personal vehicles used by the hypothetical travel party. Average fuel economy figures for this year results in an average fuel mileage per gallon of 30.3 for all cars (domestic and imported) and 22.1 miles per gallon for all light trucks and sport utility vehicles (SUVs). As with the previous studies, the EPA rating model does not address the additional fuel consumption (i.e. lower mileage per gallon) of a vehicle towing a trailer. We used the theory (based on results) of a leading trailer manufacturer to calculate the additional fuel used and the corresponding decrease in mileage per gallon. The manufacturer found that towing a trailer would cause the towing vehicles to use an estimated additional gallon of fuel for every 100 miles traveled per 1,000 pounds. It should be noted that because of the variability of highway wind conditions, wind resistance could not be analyzed, but it does affect fuel consumption. After determining the fuel efficiency (i.e. mileage per gallon) of the vehicles used in our cost comparison analysis, we then calculated fuel cost by calculating gallons needed (mileage divided by mileage per gallon) and multiplying gallons needs by prices per gallon of fuel at the pump. The American Automobile Association s AAA Daily Fuel Gauge Report was used as an estimate of at-pump fuel prices in each state passed through during the hypothetical vacations. Since it was not possible to determine when the travel party would fill the tanks of their vehicles with fuel, we used the most recent data available from AAA s reports for each of the states passed through during each hypothetical vacation. We then multiplied that figure by the number of gallons needed during the trip. For the rental car, we used the price of fuel in the state where the destination city was located and assumed that the hypothetical travel party would drive the rental vehicle an average of 50 miles per day. II-16

27 The following table presents fuel cost data collected from AAA for each destination or pass-through state considered in our analysis. We have assumed that all vehicles would use regular unleaded fuel with the exception of the Type A Motorhome, which would require diesel fuel. It is significant to point out the volatility in fuel prices in the current world market, often on a day-to-day basis. For purposes of this analysis, we have based fuel costs on data as of April 23, State Table 12 Average Fuel Cost per Gallon by State Average Cost Per Gallon Unleaded Average Cost Per Gallon Diesel Date Alabama $3.75 $4.10 4/23/2008 Arizona $3.44 $4.12 4/23/2008 California $3.87 $4.43 4/23/2008 Colorado $3.46 $4.14 4/23/2008 Florida $3.57 $4.21 4/23/2008 Georgia $3.52 $4.17 4/23/2008 Illinois $3.67 $4.28 4/23/2008 Iowa $3.47 $4.14 4/23/2008 Louisiana $3.44 $4.09 4/23/2008 Massachusetts $3.45 $4.38 4/23/2008 Michigan $3.58 $4.25 4/23/2008 Minnesota $3.43 $4.12 4/23/2008 Missouri $3.38 $4.06 4/23/2008 Nevada $3.60 $4.17 4/23/2008 New Mexico $3.49 $4.17 4/23/2008 New York $3.67 $4.57 4/23/2008 North Carolina $3.52 $4.16 4/23/2008 Ohio $3.48 $4.19 4/23/2008 Oregon $3.59 $4.33 4/23/2008 Pennsylvania $3.52 $4.45 4/23/2008 South Carolina $3.41 $4.00 4/23/2008 Tennessee $3.42 $4.08 4/23/2008 Texas $3.45 $4.11 4/23/2008 Utah $3.39 $4.15 4/23/2008 Virginia $3.45 $4.13 4/23/2008 Washington, DC $3.60 $4.31 4/23/2008 Wyoming $3.38 $4.11 4/23/2008 Source: American Automobile Association (AAA) In the cases where a folding camping trailer or lightweight travel trailer was pulled behind a vehicle, we assumed that the trailer would be left behind at the campground during sightseeing excursions. Therefore, the mileage per gallon estimate used for mileage driven by the travel party at those times was higher because the engine of the towing vehicle operated more efficiently without the trailer. Table 13 illustrates the methodology to calculate fuel costs for a sample vacation. II-17

28 Table 13 Example of Fuel Cost Calculation (Non-RV Vacation) Trip (1) : Duration: Base Round-trip Mileage: Sightseeing Mileage (2) : Total Mileage: Vehicle Used: Average MPG (3) : Minneapolis, MO - Winterset, IA - El Dorado Springs, MO - Branson, MO 10 days 1,394 miles 500 miles 1,894 miles Personal Vehicle (Mid-Size Sedan) 30.3 MPG Gallons Needed for Trip: 46.0 Gallons Needed for Sightseeing (4) : 16.5 Total Gallons Needed: 62.5 Average Fuel Price (5) : $3.425 per gallon Total Fuel Cost $ Notes: (1) Origin and destination cities in bold (2) 50 miles per day for sightseeing and side trips (3) MPG estimates based on U.S. Department of Transportation Revised Summary of Fuel Economy Performance (4) Assumed that vehicle would be driven without trailer for sightseeing (5) Fuel price data obtained from AAA's Fuel Gauge Costs for each state. Fuel price is derived from the average of reported figures for destination and intermediate states of the hypothetical trip. Source: NHTSA; AAA; PKF Consulting Food Costs The hypothetical travel party incurred vacation food costs in two different ways, depending on whether they took a camping vacation or a non-camping vacation. In camping vacations, the travel party prepared the majority of its meals in its RV or outdoors at campsites. In non-camping vacations, the travel party ate the majority of its meals in restaurants. Two food costs were calculated for the hypothetical travel party composed of two adults and two children. One food cost was calculated for all camping vacations, and another food cost was calculated for all non-camping vacations. We assumed there would be no regional variation in grocery costs; the same food cost was used in the analysis regardless of the region where a vacation took place. II-18

29 Total food costs consisted of a grocery and restaurant component. The grocery component was calculated using data generated by the U.S. Department of Agriculture (USDA) Center for Nutrition Policy and Promotion. The USDA published a data set entitled Official USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average, March We chose the liberal cost food plan, and determined that the cost of groceries to the hypothetical travel party would be approximately $38.01 per day of the vacation (these costs do not include alcoholic beverages). A dinner cost of $17.11 is included in the $38.01 daily expenditure. A detailed breakdown of grocery costs is presented in Table 14. Table 14 Grocery Cost Components Member of Hypothetical Travel Party Female Adult (age 20-50) $9.46 Male Adult (age 20-50) $10.43 Child under 12 (assumed age 10) $8.93 Child over 12 (assumed age 13) $9.20 Total Party $38.01 Estimated Cost of Dinner (1) $17.11 Note: (1) Assumed to be 45 percent of the total daily cost Source: USDA Center for Nutrition Policy and Promotion; PKF Consulting Grocery Cost per Day The restaurant meal component was calculated based on government per diem data generated by the General Services Administration (GSA). While it is possible that the hypothetical travel party may stop en route to destination and intermediate cities for food, we have calculated food costs based on the prevailing per diem allowance in each destination and/or intermediate city. A detailed breakdown of total party restaurant costs is presented in Table 15. II-19

30 Table 15 Daily Estimated Restaurant Food Cost Based on GSA Travel Per Diem Rates City Average Daily Cost per Person Branson, MO $36.00 $ Winterset, IA $36.00 $ El Dorado Springs, MO $36.00 $ St. Louis, MO $56.00 $ Stony Point, NY $46.00 $ Dennis Port, MA $56.00 $ Breezewood, PA $36.00 $ Big Spring, TX $36.00 $ Ruidoso, NM $36.00 $ Grants, NM $36.00 $ Williams, AZ $41.00 $ Grand Canyon, AZ $41.00 $ Montrose, CO $36.00 $ Kayenta, AZ $51.00 $ Hurricane, UT $36.00 $ Rawlins, WY $36.00 $ Salt Lake City, UT $51.00 $ Battle Mountain, NV $36.00 $ Reno, NV $46.00 $ Napa, CA $61.00 $ Lake Havasu City, AZ $36.00 $ Kettleman City, CA $46.00 $ Yreka, CA $36.00 $ Palmetto, GA $46.00 $ Creola, AL $46.00 $ New Orleans, LA $56.00 $ Tuscaloosa, AL $36.00 $ Sweetwater, TN $36.00 $ Thomson, GA $36.00 $ Jennings, FL $36.00 $ Orlando, FL $46.00 $ Lake City, FL $36.00 $ Callahan, FL $46.00 $ Florence, SC $36.00 $ Traverse City, MI $41.00 $ Lancaster, PA $46.00 $ Source: United States GSA Travel Per Diem Allowances, Fiscal Year 2008 Average Daily Cost for Entire Party II-20

31 From the separate grocery and restaurant cost components, we calculated the total food cost for a camping vacation and a non-camping vacation. After calculating the total grocery and restaurant cost for 3-, 7-, 10-, and 14-day vacations, we then calculated and summed 75 percent of restaurant cost and 25 percent of grocery cost for each vacation duration to derive total meal cost for noncamping vacations. The rationale behind the 75/25 percent combination of restaurant and grocery costs is our opinion that the hypothetical travel party traveling by personal automobile or air and staying in hotels/motels will sometimes buy donuts for breakfast, have picnics, or otherwise eat meals outside of restaurants. Research by RVIA indicates that campers tend to prepare all their meals at campgrounds; therefore we have assumed a food cost for a camping vacation based solely on grocery cost estimates. For the hypothetical travel party using airlines, we considered the fact that, at times, meals are served while in route. However, interviews with several major airlines revealed that complimentary meal service is being phased out. After consideration of the foregoing, we have assumed no change in meal cost on travel days for the hypothetical party traveling by air. Presented in Table 16 are the total food costs for the various vacations considered in our analysis. Table 16 Total Food Cost for Hypothetical Travel Party by Vacation Type Destination # Days Camping Non-Camping (personal vehicle) Non-Camping (airline) Chicago, IL - Branson, MO 7 $ $ $ Minneapolis, MN - Branson, MO 10 $ $1, $1, Minneapolis, MN - Branson, MO 14 $ $1, $1, Washington, DC - Dennis Port, MA 7 $ $1, $1, Washington, DC - Dennis Port, MA 10 $ $1, $1, Columbus, OH - Dennis Port, MA 14 $ $2, $2, Salt Lake City, UT - Grand Canyon, AZ 7 $ $ $ Denver, CO - Grand Canyon, AZ 10 $ $1, $1, Dallas, TX - Grand Canyon, AZ 14 $ $1, $1, Pittsburgh, PA - Lancaster, PA 3 $ $ $ Portland, OR - Napa, CA 7 $ $1, $1, Phoenix, AZ - Napa, CA 10 $ $1, $1, Denver, CO - Napa, CA 14 $ $2, $2, Nashville, TN - New Orleans, LA 7 $ $1, $1, Charlotte, NC - New Orleans, LA 10 $ $1, $1, Atlanta, GA - Orlando, FL 7 $ $ $ Richmond, VA - Orlando, FL 10 $ $1, $1, Cincinnati, OH - Orlando, FL 14 $ $1, $1, Detroit, MI - Traverse City, MI 3 $ $ $ II-21

32 Hotel and Motel Costs The cost of hotel and motel accommodations in or near each of the destination and stopover cities was determined as part of the vacation cost comparison. Using the Internet ( a sampling of hotels was chosen in each of the cities/towns. If hotels were not available within the stopover city/town, we considered hotels within a 20-mile radius. Generally, we assumed that the hypothetical travel party would stay in a full-service hotel in each destination city and a limitedservice hotel in each of the stopover cities, where available. We further assumed that the party would stay in a hotel/motel with a recognized brand affiliation, if available. PKF then determined the nightly rate at each establishment via the Internet. Hotels not available to book through Travelocity (i.e., Grand Canyon lodges) were surveyed directly from their individual websites. We assumed the hypothetical travel party (2 children, 2 adults) would stay in one standard hotel room. Our assumption that the hypothetical travel party would stay in one hotel room was based on the need for a valid comparison to RVs, where the family would also be accommodated in one space (e.g., interior of folding camping trailer). Rates were requested for dates during June 2008, when we have assumed all hypothetical vacations take place, including all taxes and fees. After rates were determined for lodging establishments in the sample, the average nightly rate was calculated for the sample. This gave us an average nightly rate for each city/town surveyed. This nightly rate was then multiplied by the number of nights the hypothetical travel party stayed in the city during any particular vacation. It should be noted that when the travel party used air transportation, we assumed that it bypassed the cities between the particular city-pairs (origin and destination city) and instead spent the majority of its vacation staying in and around the destination city. A list of the destination and stopover cities and the average nightly room rate for each as determined by our survey is presented in the following table. Again, we have assumed that the hypothetical travel party will stay in one standard room, and it is composed of two adults and two children (one under 12 and one over 12). The aggregate average nightly rate for all cities surveyed was $ II-22

33 Table 17 Average Nightly Rate for Two Adults and Two Children (1) In One Standard Hotel Room City Average Nightly Rate (2) City Battle Mountain, NV $81.24 Montrose, CO $ Big Spring, TX $ Napa, CA $ Branson, MO $ New Orleans, LA $ Breezewood, PA $93.50 Orlando, FL $ Callahan, FL $ Palmetto, GA $89.61 Creola, AL $ Rawlins, WY $ Dennisport, MA $ Reno, NV $77.81 El Dorado Springs, MO $68.65 Ruidoso, NM $ Florence, SC $81.86 Salt Lake City, UT $ Grand Canyon, AZ $ St. Louis, MO $99.38 Grants, NM $95.25 Stony Point, NY $ Hurricane, UT $79.38 Sweetwater, TN $75.73 Jennings, FL $80.93 Thomson, GA $83.47 Kayenta, AZ $ Traverse City, MI $ Kettleman City, CA $ Tuscaloosa, AL $85.31 Lake City, FL $ Williams, AZ $ Lake Havasu City, AZ $93.61 Winterset, IA $84.04 Lancaster, PA $ Yreka, CA $83.98 Notes: (1) One child over 12 years of age and one child under 12 years of age (2) Includes all applicable taxes Source: PKF Consulting Average Nightly Rate (2) Campsite Costs The nightly cost of campsites in or near each of the destination and intermediate cities was determined as part of the vacation cost comparison. Using the 2008 edition of Woodall s Campground Directory: North American Edition, a list was compiled of campgrounds in or near each applicable city. Each campground was then surveyed by telephone, to determine the nightly rate at each campground for the hypothetical travel party (two adults and two children) if they camped at a standard campsite. If available, PKF determined nightly and weekly rates at campsites with full-hook-ups, as well as water and electric only. Some campgrounds offered only one type of site. All costs were then averaged, including full-hookup fees and water/electric only fees, in order to calculate the nightly and weekly campsite costs figures for each city. Total camping costs were calculated using the aforementioned averages, depending upon the various lengths of stay in each city/town. A list of the destination and intermediate cities and the average nightly and weekly campsite costs in each city determined by our survey is presented in the following table. It should be noted that we have assumed that the hypothetical travel party consisted of two adults and two children one child under 12 years of age and one child over 12 years of age. The aggregate average nightly rate for the cities/towns surveyed was $32.37; the average weekly rate was $ II-23

34 Table 18 Average Nightly and Weekly Rates for Two Adults and Two Children (1) Camping at One Campsite City Average Nightly Rate (2) Average Weekly Rate (2) City Average Nightly Rate (2) Average Weekly Rate (2) Battle Mountain, NV $19.75 $ Montrose, CO $35.00 $ Big Spring, TX $28.50 $ Napa, CA $34.25 $ Branson, MO $35.50 $ New Orleans $44.00 $ Breezewood, PA $25.00 $ Orlando, FL $43.25 $ Callahan, FL $29.25 $ Palmetto, GA $25.00 $ Creola, AL $24.75 $ Rawlins, WY $32.00 $ Dennisport, MA $46.75 $ Reno, NV $40.00 $ El Dorado Springs, MO $19.25 $ Ruidoso, NM $38.00 $ Florence, SC $42.00 $ Salt Lake City, UT $39.25 $ Grand Canyon, AZ $32.00 $ St. Louis, MO $46.00 $ Grants, NM $30.00 $ Stony Point, NY $19.00 $ Hurricane, UT $33.25 $ Sweetwater, TN $32.00 $ Jennings, FL $33.00 $ Thomson, GA $19.00 $ Kayenta, AZ Free (3) Free (3) Traverse City, MI $42.00 $ Kettleman City, CA $32.00 $ Tuscaloosa, AL $21.50 $ Lake City, FL $27.75 $ Williams, AZ $39.50 $ Lake Havasu City, AZ $43.75 $ Winterset, IA $29.50 $ Lancaster, PA $43.75 $ Yreka, CA $36.75 $ Notes: (1) One child over 12 years of age and one child under 12 years of age. (2) Includes all applicable taxes (3) Free at National Park Source: PKF Consulting COST OF VEHICLE OWNERSHIP PKF Consulting also considered the cost of vehicle ownership for each applicable mode of transport - personal vehicle, folding camping trailer, lightweight travel trailer, Type C motorhome, and Type A diesel-powered motorhome. The following text outlines our underlying assumptions and subsequent approach to this analysis. The current reimbursement rate derived by GSA for all types of personal vehicles is $0.505 per mile. PKF has already calculated gasoline cost for each hypothetical vacation using fuel cost data specific to each state and average MPG figures derived from U.S. Department of Transportation Revised Summary of Fuel Economy Performance, dated January 15, Based on the ratio of gasoline and oil expense in the 2005 report, PKF determined the remainder of the reimbursement rate. The remaining $0.415 includes the cost for maintenance, tires, insurance, license and registration, sales tax, and depreciation. Using this information, PKF has estimated the cost of owning a personal vehicle on a per mile basis for each hypothetical vacation. In order to determine the cost of owning an RV, PKF utilized data from the 2005 University of Michigan report titled The RV Consumer: A Demographic Profile, which is updated approximately every fourth year. For each type of RV we used the percentage of used versus newly purchased vehicles in order to develop a weighted average cost of II-24

35 ownership. According to the report, approximately 39 percent of folding camping trailers are purchased new, and 61 percent are purchased used; approximately 33 percent of travel trailers are purchased new, and 67 percent are purchased used; and approximately 21 percent of motorhomes (Types A and C) are purchased new, while 79 percent are purchased used. Based on the University of Michigan report, we assumed that a used RV was, on average, 9 years old when purchased. Based on today s prevailing interest rates, we assumed an 8.0 percent interest rate, and we further assumed purchases would be financed over a 13.5-year period. Based on discussions with RV dealers across the country, we used a 7.0 percent interest rate over a 20-year period for Type A motorhomes. It is significant to note, however, that financing terms are subject to many factors and vary based on the individual borrower. For purposes of this analysis, we have selected the previously mentioned terms for all cases so that relevant comparisons could be made. Based on the above financing terms, the Internal Revenue Service allows for an annual tax savings of 0.95 percent of the original loan amount. Loans to purchase the vast majority of RVs are treated like second-home mortgages - the interest is tax-deductible. The average reported holding period for all RVs was assumed to be seven years, per the University of Michigan report. After seven years, we assumed that RVs would be sold. PKF calculated the expected residual value of each RV (new and used) after the estimated seven-year holding period. Residual values were estimated based on discussions with RV manufacturers. PKF determined today s residual value of seven-year old RVs (based on new RV being sold in seven years) and 16-year old RVs (based on 9-year old RV being sold in seven years) and applied those ratios to today s new and used costs. After calculating the cost of each vehicle, plus seven years of interest payments, we subtracted the vehicle s residual value, or what the owner would receive upon sale of the vehicle. This resulted in a total cost of ownership, which was then divided by the average holding period to determine the average cost per year. According to the University of Michigan study, an RV is used an average of 26 days per year. The annual cost of ownership was divided by 26 days to obtain the estimated cost of ownership per day. Then, using a weighted average of new versus used vehicles, this cost per day was then applied to the duration of each hypothetical vacation in order to define the cost of owning each vehicle type per hypothetical trip. The following details the analysis described above. Cost of Owning a Folding Camping Trailer For the purposes of our analysis, we have assumed the folding camping trailer is approximately 2,000 lbs. According to information supplied by RVIA, the average cost of a new folding camping trailer is $7,592. Our research, primarily through revealed that the average cost of a used folding camping trailer (assumed to be 9 years old) is estimated at $2,930. The anticipated residual value of the new trailer in seven years is $4,176, while the anticipated residual value of the used trailer in seven years is $1,612. Assuming each folding camping trailer purchased was II-25

36 financed over 13.5 years at 8.0 percent interest and an average holding period of seven years, total interest paid on a new folding camping trailer amounts to $3,516, while seven years of interest on the used folding camping trailer amounts to $1,357. Based on the aforementioned data, combined with the tax savings benefit, the cost of owning the folding camping trailer is calculated as follows: New Used Average Purchase Price $7,592 $2,930 Plus Seven Years of Interest $3,516 $1,357 Minus Expected Residual Value $(4,176) $(1,612) Minus Tax Benefit $(504) $(194) Total Cost $6,428 $2,481 Total Cost per Year $918 $354 Cost Per Day $35 $14 Weighted Average based on 39 percent new and 61 percent used ownership $22.09 Cost of Owning a Travel Trailer For the purposes of our analysis, we have assumed the travel trailer is approximately 4,000 lbs. According to information supplied by RVIA, the average cost of a new travel trailer is $15,386. Our research, primarily through revealed that the average cost of a used travel trailer (assumed to be 9 years old) is $4,556. The anticipated residual value of the new travel trailer in seven years is $10,770, while the anticipated residual value of the used travel trailer in seven years is $2,278. Assuming each travel trailer purchased was financed over 13.5 years at 8.0 percent interest and an average holding period of seven years, total interest paid on a new travel trailer amounts to $7,125, while seven years of interest on the used travel trailer amounts to $2,110. Based on the aforementioned data, combined with the tax savings benefit, the cost of owning the travel trailer is calculated as follows: New Used Average Purchase Price $15,386 $4,556 Plus Seven Years of Interest $7,125 $2,110 Minus Expected Residual Value $(10,770) $(2,278) Minus Tax Benefit $(1,021) $(302) Total Cost $10,720 $4,085 Total Cost per Year $1,531 $584 Cost Per Day $59 $22 Weighted Average based on 33 percent new and 67 percent used ownership $34.48 II-26

37 Cost of Owning a Type C Motorhome According to information supplied by RVIA, the average cost of a new Type C motorhome is $60,776. Our research, primarily through revealed that the average cost of a used Type C motorhome (assumed to be 9 years old) is $23,044. The anticipated residual value of the new motorhome in seven years is $42,543, while the anticipated residual value of the used motorhome in seven years is $11,522. Assuming each motorhome purchased was financed over 13.5 years at 8.0 percent interest and an average holding period of seven years, total interest paid on a new motorhome amounts to $28,145, while seven years of interest on the used motorhome amounts to $10,671. Based on the aforementioned data, combined with the tax savings benefit, the cost of owning the Type C motorhome is calculated as follows: New Used Average Purchase Price $60,776 $23,044 Plus Seven Years of Interest $28,145 $10,671 Minus Expected Residual Value $(42,543) $(11,522) Minus Tax Benefit $(4,033) $(1,529) Total Cost $42,345 $20,644 Total Cost per Year $6,049 $2,952 Cost Per Day $233 $114 Weighted Average based on 21 percent new and 79 percent used ownership $ Cost of Owning a Type A Motorhome According to information supplied by RVIA, the average cost of a new Type A dieselpowered motorhome is $189,285. Our research, primarily through revealed that the average cost of a used Type A motorhome (assumed to be 9 years old) is $56,481. The anticipated residual value of the new motorhome in seven years is $132,500, while the anticipated residual value of the used motorhome in seven years is $28,240. Assuming each motorhome purchased was financed over 20 years at 7.0 percent interest and an average holding period of seven years, total interest paid on a new motorhome amounts to $84,030, while seven years of interest on the used motorhome amounts to $25,073. Based on the aforementioned data, combined with the tax savings benefit, the cost of owning the Type A motorhome is calculated as follows: II-27

38 New Used Average Purchase Price $189,285 $56,481 Plus Seven Years of Interest $84,030 $25,073 Minus Expected Residual Value $(132,500) $(28,240) Minus Tax Benefit $(12,651) $(3,748) Total Cost $128,164 $49,566 Total Cost per Year $18,309 $7,081 Cost Per Day $704 $272 Weighted Average based on 21 percent new and 79 percent used ownership $ TOTAL VACATION COST CALCULATION As stated previously, the subject study involved an analysis of costs that a family of four would incur in taking different types of hypothetical round-trip vacations between each of the selected city pairs in the United States. The tables on the following pages detail each hypothetical vacation s cost based on various cost components discussed in the body of this report. II-28

39 II-29

40 II-30

41 II-31

42 II-32

43 II-33

44 II-34

45 II-35

46 II-36

47 OTHER VACATION ALTERNATIVES As was mentioned earlier, there are other modes of travel vying for the vacationer s dollars. PKF has identified a cruise vacation as a viable competitor for RV vacations. The relative cost of this competitive option was explored under a hypothetical case study basis in this study. Solely with regard to cost, this competitive offering still requires greater expenditure of capital from vacationers, and typically offer fixed, onetime-only vacations. Although the qualitative comparisons of each vacation type fell beyond the scope of this engagement, efforts were made to develop the hypothetical case study in a manner most closely resembling the parameters used for the other comparisons (lodging, transportation, domestic destinations, etc). In the final analysis, the cost savings provided by an RV vacation are far superior when compared to a cruise vacation. Therefore, the motivation for this competitive vacation type is most closely linked to considerations other than economy. Cruises Cruise vacations were explored from one of the destinations analyzed in this study, Orlando. The parameters defined for the vacation were: lodging; air transportation; inclusion of appropriate port charges; and all sustenance to be provided by the cruise company. PKF Consulting found it appropriate to compare the cost associated with a seven-day cruise with that attributed to each of the other vacation types for this destination city. Furthermore, we assumed that the cruise would be operated by Disney Cruise Line, as they offer a cruise package that combines the cruise component (three days) with a land component (four days). The average cost for a cruise-inclusive vacation of this length was found to be approximately $7,544. Compared to the cost of the Orlando cruise vacation, the cost saving of the most expensive RV vacation of this duration to Orlando is about 54 percent. IMPACT OF FLUCTUATIONS IN FUEL COSTS It is significant to point out the volatility in fuel prices in the current world market, often on a day-to-day basis. PKF has considered the impact of fluctuations in fuel costs on our findings by testing theoretical increases in fuel costs in one of our hypothetical vacations. It is significant to note that fluctuations in fuel costs economically impact all of the vacation types analyzed, both RV and non-rv vacations, to varying degrees. For this analysis, we have utilized the 10-day vacation from Phoenix to Napa as an example. We have conducted this analysis on projected increases of 25, 50, 100, 150, 200, 250, 300, 350, and 400 percent in fuel costs. The following table presents the results of this analysis. II-37

48 As the data indicates, while fuel costs are a component of the overall vacation cost, it is not significant enough to materially affect the outcome of our analysis. It would take between a 100 percent and 150 percent increase (approximately 125 percent) in fuel costs for a Type C Motorhome vacation to be more expensive than the least expensive non-rv vacation. Furthermore, it would take between a 200 percent and 250 percent increase (approximately 240 percent) in fuel costs for the Lightweight Travel Trailer vacation to be more expensive than the least expensive non-rv vacation. Additionally, as the data shows, none of the fuel increase scenarios utilized results in the Folding Camping Trailer vacation being more expensive than the least expensive non-rv vacation. For this 10-day vacation from Phoenix to Napa, the average fuel cost per gallon at the time of our research was $3.63 for regular gasoline and $4.27 for diesel. Regular unleaded gasoline for a rental car was calculated using the cost of fuel for the destination city, or $3.87 per gallon. Based on the above analysis, fuel costs would have to average approximately $8.18 per gallon for a Type C Motorhome vacation to exceed the cost of an air/rental home or condo vacation (the least expensive non-rv vacation for this trip duration). Furthermore, fuel costs would have to average approximately $12.36 per gallon for a Lightweight Travel Trailer vacation to be more expensive than the least expensive non-rv vacation, and fuel costs would have to average approximately $22.71 per gallon for a Folding Camping Trailer vacation to be more expensive than the least expensive non-rv vacation. We are of the opinion that fuel costs will likely not approach these levels in the foreseeable future. As such, RV vacations tend to be significantly less expensive than the non-rv vacation types. Therefore, price spikes in fuel costs should not adversely affect the decision on whether or not a family takes an RV vacation versus other types of vacations. It is significant to note that while our example utilizes a 10-day vacation for illustrative purposes, the findings are generally the same regardless of vacation duration with regard to increases in fuel costs. CONCLUSION Among the different vacation-types analyzed in the Summer 2008 study, PKF found that camping vacations using different types of RVs tend to be more economical than all other vacation types analyzed. The only exception was the diesel-powered Type A motorhome, where the higher purchase price of the RV increased the cost per day ownership significantly enough to make vacations of this type more expensive than the II-38