Bud Surles Upbeat but Cautious About Future
Editor’s Note: The following article appears in the monthly newsletter distributed by Bud Surles and Bud Surles Consulting Group, Victor, Idaho.
I am not a prophet and maybe should not venture down this road, but I do read, listen and talk about the Outdoor Hospitality Industry every day. So without trying to be a prophet, let me tell you what I am seeing, hearing, and talking about.
First, I have been in the industry since 1961 in one form or another. That means I am starting my 6th decade of serving the industry I love. During that time, I have seen many economic downturns. And the main thing I have learned in these downturns is that with every recovery there is a paradigm shift of the way Americans use their leisure time.
I fully expect this recovery to be no different. That means real excitement for those who are willing to think outside the box. One of the unique things about this recovery is that it is coming about at the same time that the Baby Boomers are hitting retirement in mass. This will have a great impact on everyone doing business in the industry. These Boomers will dictate patterns which will influence the industry for the next 20 years. If you want to be successful, study this generation.
Second, always the elephant in the room is money (or the economy). Money is going to be tight this year. Economic uncertainties cloud enthusiasm about any recovery. Commercial lending will be as difficult as ever. As much as politicians rave about small business and their impact on America, they continue to make policies which strangle the small business person. The government in reality hates small business and that feeling of disdain is reflected in their policies. I believe that if small business people don’t get more involved in politics at all levels, we are rapidly approaching a day when we will be the dinosaurs of tomorrow. That is the bad news.
But let me tell you what I think the good news is. There is capital out there. And if you offer fresh cutting edge ideas, you can tap into that market. And this is a great time to do just that. Because it is my belief that we are going to encounter, very soon, a round of inflation unmatched in American history (and I am old enough to remember the Carter years). Investment today, at today’s rates, and today’s acquisition and construction costs will be very wise investments tomorrow.
Exit strategies will be so appealing that the industry will incur massive turnovers in the next five years. If you can put together investment packages today, capitalize short-term uncertainties so you can stay afloat and hang tough with new ideas in the midst of negative outlooks, you will be one of the “happy campers” in the near future.
Gasoline prices will have their impact again this year. Already they are pushing rapidly upward. That means you need to be putting more of your marketing dollars locally (within the range of a gas tank or two) and target those folks who are less impacted by those rising prices. I don’t see gas prices strangling our industry this year, but will create new ways for people to enjoy Outdoor America.
I continue to be amazed that the supply side of our industry is content with offering the mediocre, while the demand side is pushing toward higher end facilities and services. Our market is out there buying very expensive rigs and then finding there are very few resorts and parks which match their investments. They buy the sizzle when they purchase the rigs: beautiful mountain resorts, beaches, streams, rivers, major attractions and fanaticize about their experiences, only to find rig damaging gravel, mud-holes, brown outs from inadequate utility services, no security, poorly trained staffs, and belligerent owners. We need to expand our visions to match what the retail industry is selling.
One more shift I see coming that will have impacts this year. America has lost annual earnings to an average of $5,000 per family in the last four years. Many have lost their homes and many more have just bailed out of the housing market. Simply put, the American Dream is not what it used to be. Downsizing makes sense when you are making less money. That means many families have become mobile to be able to go where work is and they are willing to live in RV’s to make that happen. That means the demand will continue to increase for high end long term resorts.
I believe the high enders will prosper because, remember, this work force was living in quality homes just a few years ago. They have become accustomed to quality and they will respond to quality. We need to recognize their dignity and appeal to that. City councils need to be encouraging these kinds of developments instead of stonewalling them. Government is so busy trying to give dignity to all kinds anomalies that it fails to see the reality of what America needs. We need to push them with real facts and figures and real peoples’ needs.
These are just a few of the things that have been running through my mind. I sure there are many more in yours. Let’s make our ideas count this year for a stellar future in this decade.