By Greg Gerber
Editor, RV Daily Report
A lot of RV dealers sell motorhomes, but few specialize in them.
Motor Home Specialist, in Alvarado, Texas, bills itself as America’s foremost RV dealership specializing in the sale and service of motorhomes. When considering the size and scope of the dealership, it’s hard to argue the point.
The business started in 1999 selling just pre-owned RVs. In fact, the site was so small, it had room for just six motorhomes, two offices and one service bay, said Donny O’Banion, CEO of Motor Home Specialist.
Today, it has the longest Interstate frontage of any RV dealership in the country — more than a 1/4 mile — and 160 acres acquired to display more than 650 motorhomes, all of which are hooked up to 50-amp power at all times. Open any refrigerator, and staff and customers alike will find cold bottles of water all bearing Motor Home Specialist’s private label.
Browsing is encouraged. People can freely walk onto the lot and in and out of as many motorhomes as they wish. Signs point the direction to the office whenever they are ready to talk to a salesperson.
However, the actual sales price is prominently displayed in each motorhome, and it’s a “no dicker sticker.” The price displayed is discounted a minimum of 25 percent off manufacturer’s suggested retail price, said O’Banion.
“I want our pricing to be upfront and fair,” he explained. “Some people are not good negotiators. As a result, people can make pricing errors or dealers can take advantage of them to the tune of up to $80,000 or more! We put all the money on top of the table.”
It’s like having an RV show every day, he explained, noting the dealership also serves lunch for anyone who visits the lot on Saturdays.
The dealership services customers coming from every state in the nation, and several overseas countries. The flags of every state and nation served are flown somewhere on site in addition to a 1,800 sq. ft. Texas flag and a massive 3,200-square-foot U.S. flag that costs $2,900 to replace. Logos of every manufacturer represented by the dealership are prominently displayed along the Interstate frontage as well as their names and products displayed on two 14-by-48-foot digital video boards that can be seen for miles.
Regardless of where a customer is on the property, there is no avoiding the announcement that a sale has been made. The closing salesperson and customer gets to blow a very loud train whistle to celebrate the accomplishment.
Sparked by a missed flight
Before O’Banion’s father, Doug, started the dealership, he was big into selling boats and cars. In fact, he was known throughout the region as a specialist in Mustang sales who sold over 4,000 custom muscle cars.
The two of them were at an auto auction in Florida in 1994 when their flight back to Texas was cancelled.
“We had been gone a few weeks already and we were both anxious to go home,” O’Banion explained. “My dad spotted an RV on the auction yard and told me to go buy it so we could drive it home.”
When the 1994 Holiday Rambler Alumalite hit the auction block, they bought it for $80,000 laughing “It has to be worth at least that amount since that’s what we paid.” As they drove back to Texas, they talked about getting into the RV business.
“When they got back, they sold the motorhome to a guy who had two motorhomes to trade,” he laughingly added “Because we had one, then two, we figured we were now RV dealers.”
In the early years, they focused on selling preowned and refurbished RVs out of an RV storage facility, with O’Banion and his father often buffing and cleaning a motorhome until 1 a.m. so that it was ready to sell the next day.
Soon, word of mouth propelled sales at the dealership and the rest is history.
This year, the dealership should easily deliver 2,000 RVs, and currently accounts for 40 percent of all new motorhome sales in Texas. Expect to find Motor Home Specialist at the top of the list for every manufacturer it represents. They finished 2013 as the No. 1 selling dealership for Entegra Coach, Coachmen, Sportscoach, Thor Motor Coach, Georgetown and the Forest River diesel division.
Business is booming at the dealership to the point the company is expanding — again. Motor Home Specialist is even starting to handle high-end fifth wheels and toy haulers for customers not quite ready to make a leap into motorhomes, or those looking to settle down in an RV park.
“We have learned that motorized is a different world than the towable market,” said O’Banion. “But, we’re up to the challenge and are confident we can do for fifth wheels what we have done for motorhomes.”
More than 1,000 RVs are available, including a selection of used RVs and consignments of every type. But, motorhomes are truly their specialty.
The dealership acquired a movie theater at the entrance to its sales lot and is creating a first-class indoor showroom for new motorhome sales that will include offices for each salesperson as well as finance and insurance staff and a complete restaurant in which a chef creates meals to order for customers, from a menu of course. Shoppers can also order a burger, brats or chicken.
The atrium will feature a waterfall and giant fish tank. Salespeople have their own separate entrances at which they can park their own golf carts right outside the door and bring customers into their own enclosed offices. The new building features separate offices for visiting OEM salespeople, who are also given their own desk, computer and golf cart.
The current sales building will be converted to a fifth wheel specialty center operated as a separate division of Motor Home Specialist. The space around it will be converted into an outdoor area featuring a large fountain, outdoor dining areas & additional restroom areas.
O’Banion plans to bill the site as the “World’s RV Show.” In fact he no longer participates in any local RV shows, and there is a reason for that.
“If we were to participate in shows the way we would need to, we could only display 60 motorhomes, and that’s not enough,” he explained. “At our show, we can show our guests any model and treat them to a barbecue dinner and drinks.”
Every month he plans to spotlight one of his manufacturers, and just their products will be displayed in the indoor showroom.
An indoor/outdoor lounge has been created in which employees have lunch every day. There is even a separate entrance controlled by a key code so customers staying onsite can come and go as they please. But, to help with security, four employees actually live permanently on site so that a staff member is always present.
The dealership came of age as the Internet was just becoming popular, and the O’Banion’s jumped all over it as a way to build the business. Today, that investment has paid off as more people shop on the Internet than in a showroom.
Consumers visit the dealership’s website to get information on specific products, upfront pricing and to watch videos about RVs up for sale.
Each video gives information about the dealership and the RV’s manufacturer, not just the selling price and a background voice pointing out the obvious features. A normal video presentation runs 20 to 60 minutes and even touches on how the RV is manufactured so buyers are also aware of things they can’t see, such as a description of the vacuum bonded process, said O’Banion.
The dealership also takes 45 to 60 pictures of every RV on the lot, both inside and out, even if it is identical to another unit.
“We don’t want any surprises when people come to see the coach,” he explained. “We don’t know when the manufacturer will change the fabric and it would be embarrassing to have customers look at pictures showing one type of decor, then arrive on the lot and see something entirely different.”
Currently, all their inventory is aged less than 180 days. When it gets beyond that, O’Banion discounts them even more and moves it off the lot.
“I’m in business to make a profit. If I can’t sell a motorhome and make money, then I’ll sell one at a loss and bring in another motorhome that I can sell,” he explained. “We are a volume dealer. We sell a lot of RVs at lower prices, at a minimum discount of 25 percent off manufacturer’s suggested retail price.”
Motor Home Specialist carries approximately $100 million in inventory at any time. Best of all, the dealership has no debt — none. The land is paid for, the buildings are paid for and the inventory doesn’t sit on the lot long enough for them to pay a lot of interest on the floorplan.
When the dealership doesn’t have to pay $1.5 million to $2 million in rent per year, O’Banion said he has more to reinvest into the business to acquire more inventory or to diversify into other areas.
“We carry approximately 100 to 150 pre-owned, all of which are paid for, ” he explained. “Our Prevosts motorhomes are as well. We will also carry 65 to 70 Entegra’s at a time for instance, so pretty much whatever people are looking for, we either have it in stock or it is on the way.”
It’s important to offer a variety of inventory because, at that level of spending, people want what they want, not what the dealership has in inventory, he explained.
Keeping the dealership liquid, in terms of inventory, gives Motor Home Specialist tremendous advantage over competitors, said O’Banion. Because he didn’t have to cover the monthly overhead that his competitors did during the recession, he was in the position to offer RVs at prices that others couldn’t match.
There are perks for a dealership that moves as much product each year as Motor Home Specialist. For example, Foretravel manufactured a motorhome, designed by Donny O’Banion himself, specifically for the dealership, and the O’Banion’s have exclusive rights to that design.
“They built a motorhome for us that I dreamed up. It allows me to bring something to market in that $700,000 price point,” he explained. “There really wasn’t an RV competing in this range. They either had to choose between a $400,000 coach or jump up to a $2 million Prevost. The all new Foretravel Realm brings new life to that price point and I couldn’t be more proud of this product.”
The dealership employs over 100 people full-time, and each of them hustle, said O’Banion, who added that Motor Home Specialist is the largest volume motorhome dealer in the nation with a sales force much smaller than its competitors.
“Our sales guys sell more units because they work hard to make sure they have something to do,” he explained. “They aren’t waiting for an up, they are on the phone or e-mailing someone to make something happen. We have a good quality crew front to back,” he added. “And because we are not paying for unnecessary, unproductive staff, we can afford to pay our employees above the industry norm.”
With RVs flying off the lot at the speed they do, deliveries take place every day. So, the dealership created a separate delivery area in which each space is landscaped and covered. There is 50-amp service to both sides so that regardless of how the RV is parked, it can be plugged in, which is helpful when people are moving from one RV to another.
“Whatever happens weather-wise in Texas, nobody taking possession of a new RV is subject to the elements,” said O’Banion.
Another 40 delivery sites are currently under construction and will be opened later this month. A “delivery station” will have an office for a technician onsite year round. A separate entrance allows RVers to come and go as they please.
“If someone is taking delivery of an RV for the first time and they can’t figure something out, the technician is available to answer their questions,” said O’Banion. “We hope each customer will stay a night or two with us and make sure they truly understand the operation of their coach.”
Many of the dealership’s service bays are housed in a controlled environment with air conditioning or heating as necessary. The bays are constructed with power slide-up doors on each end so that porters can simply drive them in and out. The doors are exceptionally high to accommodate any motorhome likely to be constructed any time soon.
The service center also has three custom-built 65,000-pound lifts to handle the largest of motorhomes. That enables technicians to power wash the under carriage and drench the RV with water even with slides out to check for leaks.
Each new RV undergoes a 200-point inspection, which includes checking for roof leaks before it goes on the lot. All RV roofs are resealed whether they need it or not. The dealership doesn’t use an OEM checklist, the staff developed their own, which many manufacturers now employ at the factory, he explained.
The PDI process begins as soon as a coach arrives. A full PDI and detail is performed before it is offered for sale. A second PDI begins as soon as customer leaves a deposit, and the RV is inspected again on delivery after it has been washed and waxed and the wheels high speed polished.
“We don’t charge customers to prep units for delivery, nor do we charge them for an orientation on how to operate their RVs,” said O’Banion. “We want them to leave and not need to come back for service any time soon.”
When they do leave, the new owners have gas in the tank thanks to an on-site fueling station the technicians use to fill the tank to half.
O’Banion’s dream is to complete a full-experience RV destination, including fairgrounds and ample space to host onsite rallies. With 160 acres at his disposal, his options are virtually unlimited.
“We’re planning to create a separate rally area with a separate entrance to the property, which will include a full-service campground landscaped with palm trees,” he explained.
Because the dealership is located at an Interstate exit, he’s contemplating building a sit-down restaurant, like a Cracker Barrel to offer more food options and entice people onto the property.
Not popular with other dealers
O’Banion knows he isn’t popular with other dealers regarding the prices he charges or the volume he sells, but it doesn’t matter to him. He normally puts in a 60-hour week and pours his time and attention into growing the company.
“I make no apologies for hard work,” he explained. “I have taken just a handful of vacations in my career and my father is, without question, the hardest working man I’ve ever seen or even heard of.”
O’Banion said RV lenders appreciate his business philosophy because their customers are buying RVs for less money, which means they aren’t upside down in loans and less likely to abandon the RV should they find themselves in trouble.
“Look at the number of lenders our industry lost during the Great Recession,” he added. “If we get into another bubble and it pops and we lose more lenders, then where will we be as an industry? The banks need the kind of stability we can offer.”
“Our business model is better for RV manufacturers, too, because we turn a unit and immediately order another one,” he explained. “That gives them a steady flow of units through their production lines all year round.”
The company also offers a better opportunity for customers, he noted, because they can count on honest pricing and better service.
“I went to a dealership not too long ago and they had a 3-year-old motorhome on the lot and were still asking MSRP for the unit,” he explained. “If this is the norm, then a lot of people are at risk of losing their shirt on an RV purchase. We try to educate our buyers as much as possible in regards to getting a minimum 25 percent discount on current year models and even more on previous year model RVs regardless of who they buy from.”
“If we can sell a customer a motorhome and save him money, that allows him to trade in the RV every three or four years, which helps our business long-term,” said O’Banion.
He praises his dad for also helping raise the bar on quality for much of the RV industry as well as countless industry norms that did not exist before like each coach now having an affixed M.S.R.P. on every unit so the customer has a true basis of value to negotiate from.
“The motorhomes that were made when we first started the dealership left a lot to be desired in terms of fit, finish and equipment,” he explained. “We have spent a lot of time working with our manufacturers to improve not only the quality, but the amenities offered in the products of today. We have helped design entirely new models of motorhomes as well as floorplans, paint schemes, interior designs, you name it.”
For more information about Motorhome Specialist, call 817-790-7771 or visit www.mhsrv.com.