OUTDOOR RECREATION OUTLOOK 2011

Transcription

1 OUTDOOR RECREATION OUTLOOK 2011 Prepared for the U.S. Travel Association 2011 Marketing Outlook Forum 1225 New York Avenue, N.W., Suite 450, Washington, D.C (202) Fax (202)

2 OUTDOOR RECREATION OUTLOOK 2011 Overview Outdoor recreation is a large and varied force in the leisure choices of the American public. Generating more than $400 billion in annual spending, outdoor recreation is shaped by America s public lands and waters which cover one-third of the surface of the nation. The outdoor recreation industry is dominated by small, responsive businesses providing a remarkable variety of recreation products and services: campsites and marinas; fishing-guide services and white water rafting trips; world class skiing and mountain bikes. Technology is also a friend of outdoor recreation, with lighter and stronger skis and bikes and new electronic devices, like hand-held GPS units and digital cameras, adding to the fun of the outdoors. Traditionally, participation has been influenced short term by weather and the economy, but longer-term trends including a growing, increasingly diverse and aging population and international visitors have also shaped demand. Also making an impact are newer recreation-related programs like scenic byways 150 designated national byways stretching some 35,000 miles through corridors with rich recreation, historic and th cultural offerings and media attention to the upcoming 100 anniversary of the National Park Service, which helped inspire a 2009 PBS special by Ken Burns, The National Parks: America s Best Idea. National Parks: The 12-hour Ken Burns special premiered nationwide in the fall of 2009 and was rebroadcast in early 2010, helping to remind Americans of national parks as priceless treasures to see and enjoy. Additional national park promotion efforts were mounted by the Department of the Interior and the National Park Service, including a series of fee-free days and weekends when entrance fees were waived and special value-added offers made available by park concessioners and the National Park Service. America s National Park System has 392 units, ranging from the best-known destination parks to small historic sites. Many of the most prominent national parks had strong 2010 visitation. Yellowstone has broken its record for visitors: more than 2.5 million people visited during the summer months up by more than 200,000 compared with summer Yosemite visitation increased over the prior year, as did Glacier, which celebrated th its 75 anniversary. The top of the Statue of Liberty reopened, and proved very popular. Valley Forge, Mt. Rushmore and the Vietnam Veterans Memorial saw increases. Yet overall visitation to the National Park System will finish down from 2009, and remains below levels of the late 1980's, despite a 25% increase in population. Many units dependent on access by air saw declines. For example, parks in the U.S. Virgin Islands and Puerto Rico were hard hit. And Gulf Coast area parks saw downturns prompted by the oil spill in the Gulf of Mexico. Many of the nearly 300 million visits to national parks rely upon services of national park concessioners. Business by concessioners increased, exceeding $1 billion in 2010 and generating more than $70 million in revenue for park operations. Concessioners also invested an estimated $10 million in park promotion efforts, and are the leading partner in a new National Parks Promotion Council also involving state tourism agencies and gateway communities. Concessioners are leading efforts to find ways to focus promotion on the entire National Park System and those Americans unaware of the great benefits available

3 through time in our parks. Most importantly, concessioners are committed to meeting America's needs for healthier lifestyles, for better and lifelong educational opportunities, for strong local and regional economies that sustain and protect our parks, and for connecting all Americans to our parks across differences in regions, ages, income and ethnicity. Other Federal, State and Local Recreation Sites: State parks attract nearly three times the number of visits made annually to national parks. And the 50 state park systems have now united to promote America's State Parks in partnership with corporations like Coca-Cola, Odwalla and STIHL. A number of state park systems report increased visitation, perhaps as American families look for value in their leisure spending. Virginia finished the summer 6.5 percent ahead of last year in visitation. At the same time, California, Arizona, Idaho, Illinois, New York and Nevada have faced repeated budget-related park closure threats. This issue will continue to be a concern in Innovative funding solutions are being explored. For example, California voters will decide on Proposition 21 in November. If passed, every California passenger vehicle will pay an $18 annual park fee and, in turn, will gain fee-free access to all state parks. Projected revenues from the initiative are $500 million annually enough to replace all current appropriations and allow investments in worn-out infrastructure and new facilities. Winter Outdoors: The International Snowmobile Manufacturers Association is optimistic about the snowmobile season. Consumer snowmobile shows and events during the fall of 2010 are up substantially in attendance. Shows are reporting a 10 percent increase in customer attendance and dealers and resorts are enthusiastic about sales and reservations at snowmobiling-related resorts. Snowmobilers love cold, snowy weather, and the Farmer's Almanac predictions for a cold, snowy winter are being received with enthusiasm. The Almanac s prediction is being mirrored by the lead forecaster for Accuweather.com! The snowmobile industry forecasts an increase in snowmobiling activity this winter over last year. Tens of thousands of miles of public snowmobile trails, maintained by snowmobile clubs across the country using funding from registration fees and gas taxes, are in better shape than ever. With new grooming equipment and techniques available, the trail systems will be enjoyed by hard-core enthusiasts and a growing number of those who rent snowmobiles at winter resorts. Survey results from the Go Snowmobiling web site highlight that a substantial number of the non-snowmobiling population are very interested in snowmobiling and, in particular, the millennials (Y-Generation) now entering the market express a very high level of interest, with more than 18 percent of them indicating a strong desire to go snowmobiling this winter. The snowmobile industry reports that it has developed new, exciting products that meet new rigid emission standards to end complaints about air pollution, and reports that the public is warmly accepting them. The industry looks forward to a growth year in The ski industry finished the season strongly and forecasts an even better season. In a dramatic rebound from , the U.S. ski industry recorded 59.8 million downhill visits, for its second best season ever. In spite of continued pressures from a weak economy and without the catalyst of an exceptional snow year, skier visits this season increased by 4.2 percent, only 1.2 percent below the all-time record of 60.5 million visits achieved in The rebound in total skier visits was accompanied by improved

4 key metrics of ticket revenues and yield, increased "paid" visits as a share of total visits, increased shares of overnight and international visitation, and an increased volume of lessons taught, all of which should be favorable for resort revenues. In many respects, continued to demonstrate the strength and resiliency which has characterized the U.S. ski industry since the season 10 years ago. The ski industry shares a love of cold, snowy weather with snowmobilers, so predictions for the season, a rebounding economy and expected increases in international visitation lead to optimism about the upcoming season. Private & Public Recreation Facilities: Year-to-date occupancies and revenues at private campgrounds, RV parks and resorts through Labor Day weekend were generally comparable with last year s figures according to the National Association of RV Parks and Campgrounds. Parks that have invested in rental accommodations, such as park model cabins and cottages, have done particularly well. The biggest exception, however, were parks along the Gulf Coast, due to the oil spill in the Gulf of Mexico. Many campgrounds report that campers are taking more frequent trips for shorter periods of time. At Kampgrounds of America Inc. (KOA), revenues rose 2.7 percent and summer occupancies actually outpaced last summer s figures by 2.5 percent. Park model cabins and cottages are popular too, and these Kamping Lodges rentals were up 27 percent over last year. Yogi Bear s Jellystone Park Camp-Resorts saw demand for cabins and park models grow by 13 percent and revenues were up 3.3 percent. And, overall, there were gains of 15.3 percent in seasonal and 2.1 percent in annual customers. Recreational Vehicles: Recent research by the Recreation Vehicle Industry Association found that 78 percent of current RVers are planning to use their RVs as often or more than last year, up 6 percent. The successful Go RVing campaign has helped the industry recover from the economic downturn. Sales are also being buoyed by the introduction of eco-friendly new RVs that incorporate green technologies and are smaller, lighter, more aerodynamic and more fuel efficient. In addition, the organization reports that RV shipments are projected to increase 44.8 percent in For 2011, the forecast is that shipments will increase 8.2 percent over While this is good news, RV industry hopes are tempered by a reality that the overall economic recovery is likely to be slower than recoveries from previous economic downturns as consumers reconsider spending and savings habits. The RV industry is responding to consumer demand with a large number of lower-weight and redesigned units. The market has shifted moderately toward towed units, although redesigned Class A and Class C units are finding good consumer interest. And the industry is also working to help its existing owners retrofit their units to make them more energyefficient and greener. Also noteworthy is that the RV rental industry has reported very strong demand, both from U.S. and international markets. The RV and other vehicle-based recreation activities have been aided by continued expansion and improvements in the National Scenic Byways System. The popularity of these routes from the Blue Ridge Parkway to California Highway 1 through Big Sur

5 continues, and designation as a National Scenic Byway or All-American Road draws visitors. Sales of National Geographic s fourth edition of its guide to America s scenic highways and byways continue to rank near the top of all its guidebooks and, in 2010, Goodyear chose a subset of these special roads as its Top 50 Comfortable Touring Drives, announcing the designations in a widely covered satellite media tour in cooperation with the America s Byways Resource Center. Boating & Marinas: 2011 is expected to be an exciting year for recreational boating, according to the National Marine Manufacturers Association. Reasons include new innovations in boat design, efficiency and technologies and boaters passion for the water. And the industry s Discover Boating national awareness program indicates upward trends in boater spending and preowned sales. Americans are discovering boating as a new way to enjoy time with family and friends. And, more importantly, they are willing to spend on experiences during times of economic downturn. For example, sales of pre-owned powerboats increased 7.7 percent to 780,300 and increased 5.4 percent in dollars for a retail value of $8.5 billion in In addition, a sampling of 4,200 members of BoatU.S. reveals that 95 percent of respondents said the current economy would not stop them from using their boat this year and, in fact, 23 percent noted they would go boating more often. The survey further reports boating impacts Americans well-being with 78 percent of respondents saying boating brings their family closer together. Sixty-eight percent said it has improved their social life, while 89 percent felt it contributes to their health and wellness. Boats continue to be a big force in the recreation business, in part because some 75 percent of all recreation occurs very near to the land/water borders of our coastlines, rivers and major lakes. These boaters helped drive an increase in the boat-services sector (repairs/services, storage, insurance, taxes and interest payments) of nearly 2 percent in 2009 to $6.3 billion. In marina news, the Association of Marina Industries reports that, overall, there has not been much change since last year. Recreational boaters are still boating and keeping marinas in business, but the number of new boaters entering marinas has not climbed. As a result, new construction and expansions of marinas continue to be limited. Some marinas along the Gulf Coast did see falling business this summer due to the oil spill. Adventure Sports: A survey by the America Outdoors Association, with 550 companies and suppliers of outdoor recreation services and tours that operate in 43 states and 50 foreign countries, shows improvement for active travel in The group s 2010 Market Outcome Survey reveals a modest rebound for the outfitting and active travel industry in 2010, with some market segments doing better than others. The survey included results from outfitters and adventure resorts that provide rafting, hiking, adventure tours, skills training, guest ranch vacations, interpretive trips and other active outdoor experiences. Shorter day trips near metro areas or destination attractions are enjoying high demand with some companies reporting record performance. In a recent survey, 42 percent of respondents expect to have reasonably good profits in 2010 versus 33.6 percent in And 67 percent expect to be profitable but, of those, 25 percent expect to be marginally

6 profitable. Prior to the recession, over 74 percent of companies responding reported reasonably good profits. Overall, 52 percent of companies expect at least some improvement in their profits this year when compared to Fewer companies suffered significant losses in 2010 when compared to 2009 (5 percent versus 14 percent). Multi-day trips and vacations to more remote locations with extensive travel continue to be weaker than shorter trips with a few exceptions. Many companies report changing their product line to include shorter, softer or less expensive options. Thirty-one percent of companies responding took advantage of the 6.2 percent payroll tax exemption for hiring previously unemployed workers. Some adventure resorts offering diversified recreation experiences, which include cabin rentals and lodging, are enjoying revenue growth. Zip lines are one of the hottest new products for those with the land base to support one. Fishing: Recreational fishing has been flagged as one of the top gateway activities for getting people involved in outdoor recreation: more than 77 percent of anglers participated in other outdoor activities in Fortunately, fishing participation, which has been flat or in decline for much of the past decade, has now shown new vitality as Americans remember how cost-efficient fishing can be. The American Sportfishing Association reports fishing license sales increased 4.7 percent from 2008 to 2009, when there were 996 million fishing outings. Though this is based on a study of just 12 states, if this pattern holds across America, it will be the largest jump in sales in more than 30 years. In general, fishing participants are excited and optimistic about getting outdoors in the coming year, with 85 percent of anglers hoping to increase the time that they spend enjoying outdoor recreational activities. Fishing participation increases in better economic climates because people have more free time to enjoy the activity. Based on past trends, fishing participation is expected to remain fairly stable over the next five years. Summary: Recreational activities continue to be a mainstay of the American lifestyle, but purchases of expensive recreational items and adventures continue to recover unevenly from large decreases which were triggered by the recession. Most components of the recreation industry reported significant gains in 2010 and the general outlook for the outdoor recreation industry in 2011 is optimistic. Our conclusion in the comparable forecast last year was that recreation activities will increase as more people seek high value vacationing. Then, and even more now, we see America s Great Outdoors as a perfect fit for this desire. Derrick A. Crandall, President American Recreation Coalition 1225 New York Avenue, N.W. #450 Washington, D.C , dcrandall@funoutdoors.com