Tuesday Tactics: Looking Back to Look Forward
Providing ideas and insight that can inform agency and partner strategies for improvement of park, recreation and hospitality operations and assets
Photo Credit: @mjskok & @custodiancontent
Leveraging Data to inform Operational and Capital Budgeting
We are now about 28 weeks into the COVID-19 Pandemic and the summer vacation season has ended. Recreational data trends for mid summer are being released and entities are beginning to model when potential “return to normal” may occur under different scenarios. Both should be evaluated to ascertain operational and capital budget priorities for the next two to three years.
Supply Data
Recreational Vehicles (RV’s) : According to RVIA, 2020 year end RV shipments are expected to be up approximately five percent over 2019 despite a manufacturing shut down of approximately two months.
Tents: According to the NPD Group, “camping sales increased 31% in June 2020 as compared to prior years as consumers looking for a respite from home life pitched tents in their yards or at local destinations. Recreational tents grew almost two times as fast as backpacking tents, which tend to be favored by serious adventurers.”
Boats: According to NMMA, sales data through June of 2020 compared to the same time last year indicates, “new powerboat retail sales up 5%; sales of personal watercraft up 10%; saltwater fishing boat sales up 5%; and jet boats up 9%.”
Bicycles: According to the NPD Group, bicycle sales data (e.g., road bikes, indoor bikes, parts, helmets, and accessories) through June of 2020 indicate that sales were up by 63% compared to the same time last year. “Early in COVID-19, sales growth was generated from sales of family-friendly bikes, but more recent growth comes from higher-end bicycles typically purchased by enthusiasts, including road bikes and full suspension mountain bikes. According to NPD, the shift toward higher-end bikes is due to inventory shortages in more family-friendly categories, as well as cyclists who are now more willing to invest in the activity for the long haul.”
New Normal “End of Pandemic”
McKinsey & Company Healthcare Practice recently issued a white paper on forecasts for the “functional end” of the COVID-19 Pandemic. All scenarios appear to indicate improved recovery on or around 2023. See exhibit images below:
20201 Operational and Capital Budget Priorities Many public agencies 2021 budgets were “completed” as COVID-19 arrived; however, many public agencies are now adjusting their budgets based upon COVID-19 fiscal realities. As budget prioritization is required for fiscal sustainability, CHMGS offers several thoughts for consideration.
Outside vs. Inside: The focus on infrastructure that is outside (e.g. trails, amphitheaters, fields, etc.) vs. inside (e.g. visitor centers, museums, interpretive sites), should be emphasized. This includes improvements and managing of parking and restrooms that provide visitor access. Improving trail access options to allow for greater distribution of increased trail use will also continue to important.
Camping and Boating: The significant increase in supply of tents, RV and boats will likely increase demand for campgrounds, boat launches, boat rentals and marinas. Allocating staff to these program areas as well as ensuring that these facilities are well maintained will be important for the next several years. Also re-evaluating the fees and charges for these services will be important. Ensure that your rates at a minimum are comparable to the market and evaluate if can understand if these fees are approaching close to 100 percent of direct operating costs.
Contactless vs. Human: A major shift has occurred in how revenue is transacted for leisure activities. Contactless payment has accelerated due to COVID-19. Evaluating how public agencies are conducting transactions, including shifting to capital investments in upgrading software and/or self-pay and credit card kiosks for usage, should be considered.
CHMGS will continue to monitor recreational data trends and provide some end of year updates on these issues. Let us know if you have any questions or you can use assistance with budget forecasting.
