2023 Economic Forecast for the Outdoor Hospitality Industry; A review of industry & economic trends

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The outdoor hospitality industry has demonstrated resilience over the past three years, overcoming pandemic-induced disruptions and emerging stronger. This article explores key trends, challenges, and opportunities, offering insights for RV park and campground stakeholders.

Macroeconomic Environment:

The industry faces a complex macroeconomic landscape. Inflation, driven by rising fuel costs, geopolitical tensions, and supply chain disruptions, is gradually declining. The Federal Reserve’s cautious aggressive interest rate increases aim to combat inflation but could lead to a mild recession. Despite economic uncertainties, the labor market remains robust with historically low unemployment rates, yet challenges in retention persist due to factors like “return-to-office” policies and the “Great Resignation.”

Operating Income Trends:

Camping remains a major player in leisure travel, constituting about one-third of total revenue. However, growth rates in camper numbers has slowed plateau as the pandemic’s impact wanes. Gen Z, comprising 25% of all campers, is a significant growing demographic, entering the hobby at a younger age. RV shipments have declined to historically typical levels, and glamping gains popularity as a luxury camping alternative.

Property Valuation Drivers:

The supply of campground properties and RV parks is increasing keeping pace with the growth in campers potentially outpacing demand and pressuring profit margins. However, revenue per RV camp is steadily growing, indicating campers’ willingness to pay more and the participation of higher income demographic camping guests. A slowdown in new housing developments reduces start-up costs for new parks, attracting investors.

Investor Trends:

Investors face shifting dynamics, with capitalization rates squeezed by higher capital costs. Rising interest rates have are expected to significantly decreased investment volume. Private equity transactions deals have slowed, leading to a surplus of capital as cautious investors wait for signs before deploying capital

Consolidated Conclusions:

The industry exhibits positive long-term growth, driven by a demographic shift toward younger and wealthier campers. Challenges include rising operating costs, competition from air travel, and the popularity of glamping. Economic challenges include low unemployment rates, potential inflation, and a predicted mild recession. Investment real estate may not return to pre-pandemic valuations for years due to normalized debt costs.

Embrace the Evolving Landscape:

The article encourages stakeholders to download a comprehensive market report for a deeper understanding of the industry, current state, trends, and opportunities. The report promises to be a valuable resource for informed investment decisions.

Expertise and Commitment:

The article emphasizes the provider’s expertise in the outdoor hospitality industry, highlighting a successful track record and a commitment to offering expert guidance. The experienced professional team aims to help investors achieve their goals in this dynamic industry.

In conclusion, the outdoor hospitality industry remains on a positive growth trajectory but faces challenges that necessitate informed decision-making and strategic navigation. The offered market report and expert guidance aim to assist stakeholders in capitalizing on the industry’s potential.