Government Shutdown May Prove ‘Catastrophic’ to the Outdoor Industry, Experts Say
The government shutdown has rendered National Parks throughout the country either closed or neglected. And outdoor industry insiders fear this could have both short- and long-term detrimental impacts on the marketplace.
Wes Allen, co-owner of Wyoming’s Sunlight Sports, is worrisome over the tourist traffic he will lose if people opt not to visit nearby Yellowstone National Park or if it closes due to the government shutdown. (The park is open, but it is not manned by regular park employees.)
“A significant drop in Yellowstone traffic could be a very painful experience to see. People plan vacations months ahead of time, and places like Yellowstone are pretty remote from most of the population centers — you’ve got to make a commitment to get there,” he said. “People are going to do other things if they don’t feel certain they’re going to get there. A National Parks shutdown for my business would be extremely painful.”
Aside from his business, Allen fears the effects of the government shutdown and the deteriorating shape of National Parks could be “catastrophic” to outdoor-related retail and brands.
“The classic American vacation is the summer parks road trip, and people start planning those things in February and March. If the shutdown continues during that planning period, then we could see a huge financial impact on the outdoor industry,” he said. “[And] the consistent stories in the media about all the trash and human waste at National Parks makes it a whole lot less appealing to vacation there.”
Jack Knoll, marketing director for footwear brand Forsake, thinks this is especially true with respect to travelers coming from other countries.
“[The shutdown] definitely could have a long-term detrimental impact if a lack of funding dissuades park tourism, [which] is even more exaggerated among international travelers,” he said. “If foreign guests opt away from planning park trips due to closure or, indirectly, risk of closure, the effects could continue after the shutdown ends.”
Matt Powell, senior sports industry adviser with The NPD Group Inc., believes brands are OK for now since the government shutdown is relatively fresh, but he fears retailers nationwide will soon feel the hurt.
“Brands have already shipped product, so the impact is going to sit more on the retail side,” he said. “Larger retailers are going to lean back on brands for help, but smaller retailers don’t have as much clout, so [they] will be impacted the most.”
Powell continued, “We’re in a wear-now economy; people are not purchasing products in anticipation. As they’re going to take a trip, they’re going out and outfitting themselves in whatever they need. If the parks are closed and they’re not making that trip, then that purchase is not getting made.”
And Powell believes retailers lack ways to counteract the blow to their businesses.
“They’re going to be forced to promote to get rid of inventory and get their cash back. There’s very little they could do at this point,” he said.
The government shutdown has lasted for 21 days. If it drags out longer, Allen believes brands that depend on the success of their retail partners should start to worry.
“Orders will be down, they’ll see an increase in late payables, and because orders will be down, they’ll have more product than they planned for, so they’ll have to discount product, which leads to decreased brand equity and oversupply in the market,” Allen said. “They’ll have to make tough choices about finding outlets for distressed merchandise that can negatively affect them for the next two to three seasons.”
Despite the doom and gloom of the situation, Knoll believes something positive could come when all is said and done.
“The optimistic part of me hopes that in the long run, people will realize the value of our parks after a temporary shutdown,” he said. “The response could theoretically cause more awareness and a subsequent revitalized surge of park guests, jump-starting sales among these types of customers.”
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