COVID-19 Impacts on Vermont’s Outdoor Recreation Industry and Recommendations for Reopening and Recovery – May 1, 2020
The Vermont Outdoor Business Alliance (VOBA) and its 60 members are dedicated to strengthening, expanding, attracting, and retaining outdoor recreation economy businesses in the state. Vermont’s outdoor industry makes, sells, and provides outdoor recreation products, services, and experiences to Vermonters and visitors and includes retailers, manufacturers, suppliers/distributors, recreation facilities/resorts, trail builders, guiding services, recreation event companies, lodging and campgrounds, media, marketing, sales, and professional service businesses, and non-profit organizations.
The COVID-19 public health crisis has required governmental measures including the Governor’s Executive Orders that have had a significant impact on Vermont’s outdoor recreation economy beginning in mid-March.
Although a full understanding of the impact to the sector will continue to unfold over the coming months and years, VOBA has compiled an initial assessment based on almost 30 responses to VOBA’s Outdoor Industry: Survey on COVID-19 Impacts and Recovery Strategies. July has been identified as providing a bellwether for an economic forecast and October/November/December as another critical sales/revenue cycle for the industry.
Two silver linings are clear: 1) the strength of Vermonters’ commitment to our community members, especially the most vulnerable and the frontline workers putting themselves at risk for others; and, 2) appreciation for the rural nature of our state with its abundant access to safe, open spaces. 68% of respondents cited an increase in “backyard” physical activity, therefore we expect participation to increase with the seasonal changes and allowances ahead. As a gateway to community mental and physical health and economic prosperity, the outdoors has much to offer a swift and sustainable recovery for the future.
Summary of Impacts
Operations: Full or partial closure of business operations including retail, manufacturing, facilities, and professional offices have been necessary for almost all of the state’s outdoor recreation sector, with the exception of some essential manufacturing/services and administrative remote working arrangements. Cancellations or delays in recreation events (which could include activities such as races, guided trips, programs, and camps) and reservations for stays were cited at 56%.
Financial Position: 32% of businesses reported losses between 50-75% to date despite the ability of limited sales and services though e-commerce (62%), curbside delivery (48%), remote working projects (67%), and manufacturing pivots to Personal Protective Equipment (PPE) (12%). Most losses are from a lack of sales, reservations, and/or events (86%), but businesses also acknowledged a 32% reduction in sponsorships, grants, and/or investment capital. Respondents are pursuing financial options through SBA EIDL loans and emergency advance grants (50%) and negotiations with partners and lenders (40%). One retailer’s business is at 3% of normal with losses calculated at $500,000. A ski resort refunded a month’s worth of pre-bought lift tickets, equipment rentals, and hotel stays. Event businesses face liability for chargebacks and lost contract deposits from merchant banks and registration platforms due to cancellations, while some organizations have successful transitioned live events into virtual fundraisers. With marketing and advertising budgets frozen or reduced, one public relations firm anticipates clients to be down 33% while another print media businesses is offering free design services/flexible terms. Bicycle retailers seem to be an exception with one publication seeing a May directory renewal at 90%.
Workforce: 63% of employers laid off or furloughed employees and 59% supported employee applications for unemployment insurance. 42% of employers are delaying or halting seasonal hiring. Although 77% applied for the Payroll Protection Program (PPP), businesses have concerns about unfavorable terms, such as an inflexible rehiring date, full time requirements, and a lack of clarification on forgiveness eligibility. Several retailers (both large and small) have found it difficult to utilize their PPP funds to bring back employees because the higher unemployment insurance benefit is more attractive. A self-employed business expressed frustration at being determined ineligible for several programs.
Supply Chain/Markets: 73% of respondents identified supply chain disruptions in the spring buying/selling cycle and uncertainties in delivery timelines (62%) and modifications in fulfillment (50%) as challenges. Many oversees factories remain closed although one manufacturer found alternatives in domestic partners and sourced new materials. Unsold merchandise in retailers is expected to inhibit new buying through the fall and winter, impacting product orders for local brands. The ski industry will face supply chain disconnects in the upcoming cycle. Customers have made a shift towards purchasing online and directly from brands rather than retailers and it is anticipated to be difficult to bring customers back to local, brick and mortar businesses. When retailers do reopen, it is unclear what the purchasing power of customers will be like coming back from a climate of 20% unemployment.
Infrastructure: Recreation infrastructure has been limited by 88% due to the closure of facilities, resorts, and trail networks, the suspension of trail maintenance (53%) (that has since been allowed in a limited manner), and the inter-state travel ban and intra-state travel limit for recreation (10 miles). Respondents said that barriers to participation have increased by 65%. One recreation organization estimates losses in trail fee revenue due to closures on its managed trails could reach 45% by June. Guides (such as fishing, paddling, and climbing) are currently on hold with spring clients and are uncertain about summer’s travel guidance - both seasons provide key annual revenue. Recreation facilities with lodging cite costly cancellations and rescheduling of weddings, reunions, events, recreation programming, and summer camps, some of which bring in the bulk of seasonal revenue.
VOBA Recommendations for Restart (1-2 months)
VOBA businesses believe that a phased restart of the outdoor recreation sector can be done cautiously and safely within the weekly guidance issued through Governor Scott’s Executive Orders, in adherence to mandatory health and safety guidelines, and in compliance with the clarifications and training tools provided by the Agency of Commerce and Community of Development and Vermont’s Occupational and Health Administration. VOBA members understand that state and regional health data and trends are directing the “turning of the spigot” and VOBA members acknowledged support for the Department of Health’s plans for expanded testing across the state as leading to evidence-based decisions.
One respondent appreciated the frequent guidance, tools, and communications from state government. Another business would like to see more of a longer-term roadmap that conveys a vision and defines parameters for reopening sectors so employers know what to expect and can plan as well as “boost the morale” of employees while ensuring the community continues to feel safe. VOBA recommends:
Best practices can drive the careful and responsible reopening of operations within the state’s phased restart of the economy. The outdoor industry sector is determining plans and protocols and trade associations and businesses are working together to exchange information that is:
Tailored to different types of outdoor recreation businesses: retailers, guiding services, manufacturing, trail construction and maintenance, recreation facilities, and businesses that host recreation-based events, programs, and lodging; and
Designed based on business size, location, product/service, indoor/outdoor, social interaction/heath risk, occupancy/group & gathering size, and season.
Reopening outdoor and tourism businesses should be coordinated with the safe reopening of outdoor recreation facilities and staged travel guidance. Alignment of public messaging/education to include:
A directory of businesses as they reopen, what services, goods, and programs are available, when and how to shop safely and reminders on why to support local, brick and mortar businesses;
How to responsibly recreate in the outdoors in a safe and respectful manner, advisement on where to go and when, and who are the managing entities;
Emphasize the value of community health and the linkages between outside physical movement and improvements to mental and physical health, encourage continued increases in participation in “backyard” or Vermont-based activities; and
Travel guidance adjusted to ensure flow and gathering of local recreationists (initially) and visitors (later) within requirements. When guidance for Vermonters recreating expands beyond 10 miles, a ”Vermont for Vermonters” or staycation campaign can encourages new recreation opportunities and patronage of Vermont outdoor recreation businesses (such as a guided family fly-fishing trip or weekend lodging within the state).
Continue to adjust and expand public and private financial relief programs for small businesses and outdoor recreation-related needs. Options would prioritize grants, no interest loans, flexible terms, and timelines. Continue to communicate the availability and eligibility of resources to employers, employees, nonprofit organizations, and trade associations. Consider options for a Vermont sales tax holiday for outdoor recreation equipment.
Launch a centralized online outdoor jobs portal to facilitate the rehiring and job seeking of outdoor recreation professionals and seasonal workers. Identify existing industry certifications, trainings, DIY skills, and professional development that can be taken online during employment gaps.
Continue to build community and participation through the outdoors and elevate its value to mental and physical health in the news, on social media, and through online networking. Communicate stories and create opportunities to bring the outdoor recreation community together and to get people moving outside:
Tell stories about the outdoor industry’s pivoting to respond to community and medical needs;
Promote exercise as an allowable activity and make the link between getting outdoors and improved physical and mental health; and,
Develop technical innovations and tools that allow outdoor recreation businesses & stakeholders to connect, share information, collaborate on solutions, and get outside.
VOBA Recommendations for Recovery (3-15 months)
The recovery roadmap for VT’s outdoor recreation industry will be determined in the months ahead and approaches will be multi-faceted and multi-year. At this time, VOBA recommends the following strategies:
Launch a recreation hub marketing campaign: Coordinate a public awareness effort that organizes Vermont’s outdoor products, services, and places geographically to re-direct participation or visitation to under-utilized recreation areas or higher priority destinations based on the VOREC community grant program. A re-branding could drive patronage of nearby businesses, spread out visitation, incentivize small groups, and encourage local shopping while reinforcing public health, quality of life, and outdoor community building. Messaging:
Tell the stories of Vermont companies and their products, services and experiences they offer, describe their best practices to ensure safety and the innovative ways to financially support them and their rural downtowns.
Tell the stories of Vermont’s recreation assets and how to gather and participate in ways that are safe and high quality, educate on infrastructure stewardship and user etiquette for engaging cooperatively with other trail users, landowners, state land managers, and nonprofit managing entities.
Elevate the economic aspects of the 7 - 9 recreation designations awarded a VOREC community grant by engaging local businesses in the projects and in linking businesses with the infrastructure in ways that increase business opportunities.
Secure innovation financing for outdoor recreation economy businesses: Continue to tailor grants, loans, and sources of capital to the needs of small businesses and start ups especially for opportunities that are unique to outdoor recreation, including:
E-commerce/marketing projects, or innovative approaches to reach new customers;
Operations pivoting to new manufacturing or services, programs, or events;
Investments in infrastructure and facilities; and,
Technical assistance or professional services for financial and sustainability planning.
Establish a statewide platform for outdoor workforce development: Build an outdoor jobs portal that facilitates the ongoing hiring and training of outdoor professionals and seasonal workers. Position the outdoors as a desirable career pathway for those seeking to relocate to Vermont.
Design a jobs program around building or maintaining recreation infrastructure on public and private lands;
Assess employer demand for positions in trades/textiles/mechanics and product development/digital marketing and work with education institutions to develop degrees, apprenticeships, and trainings; and,
Establish scholarships or student loan forgiveness options for trainings and degrees.