ORR Webinar Explores Impact of Outdoor Rec Spending – RVBusiness – Breaking RV Industry News
WASHINGTON. D.C. – On June 4, the Outdoor Recreation Roundtable (ORR) hosted an informative webinar titled “Recreation Funding: Insights into the Future.” More than 500 attendees joined the live presentation, which focused on dynamic challenges impacting the industry-at-large, current federal outdoor recreation-related spending and data-driven solutions to ensure long-term viability.
During the webinar, ORR and Southwick Associates released preliminary results from a joint study financially supported by leaders at KOA, Brunswick, Winnebago Industries and Revelyst. The goal, according to the executive summary, was to develop a more comprehensive understanding of federal spending in support of outdoor recreation, investigate associated trends and determine potential future impacts.
“As pressures from increased visitation, aging infrastructure and climate change intensify, the sustainability of outdoor recreation is more crucial than ever. This study provides a quantitative analysis of the funding landscape, outlining the economic disparities and potential threats to future support,” said Whitney Potter Schwartz, senior vice president at ORR.
Industry experts discussed a range of topics, including a shift in demographics and consumer trends, investment in emerging energy sources, as well as high inflation and stagnant appropriations. During 2023, outdoor recreation was up 4.1%. To provide context, a record 175.8 million Americans (57.3%) age six and older participated in outdoor recreation. Co-presenter Lesford Duncan, executive director at the Outdoor Foundation, highlighted an uptick in diverse demographics, including women and the LQBTQ+ community.
Rob Southwick, president at Southwick Associates, specifically addressed the unsustainable gap between increased outdoor recreational demand versus current federal financial assistance. While the industry drives $1.1 trillion in economic output, contributing 2.2% to U.S. GDP and employing 5 million people, it only receives 0.16% of federal funding – an approximate 14x difference in scale.
Caption: The outdoor recreation industry is an economic powerhouse, fueling state GDPs and accounting for 3.3% of U.S. employment.
“Over the past 20 years, the federal budget increased 76%. During that time, the number of people participating in outdoor recreation has increased 45%. However, we only measured a 22% increase in spending on outdoor recreation within the federal budget,” Southwick said. “So, compared to 20 years ago, only half of the amount of money is going in per head, or per user, as compared to the past – and that is causing some problems.”
A substantial increase in outdoor recreationalists, plus unprecedented ecosystem and economic damage resulting from climate-related events, continue to strain resources. As such, the gap between the deferred maintenance backlog at all agencies and federal recreation spending could exceed $34 billion by 2042.
In addition, a significant portion of federal funding is derived from non-general revenue sources, like excise taxes, user fees and fuel tax. Southwick emphasized the need for diverse and resilient funding mechanisms, as $2 billion in federal outdoor recreation spending is at risk due to fluctuating patterns in energy consumption.
For example, Southwick pointed to the offshore oil and gas extraction sector, whose royalties fund the Land and Water Conservation Fund (LWCF) and Legacy Restoration Fund (LRF).
“Society is shifting toward alternative energy sources,” he said. “At some point, the extraction of oil and gas will drop and consumption will decline. Where will the funds come from to replace what we receive now from these sources?”
Likewise, off-highway vehicle sales, recreational boats and small engine motor fuels support the Recreational Trails Program and Sport Fish Restoration and Boating Trust Fund, which also may be impacted.
“With projected changes in renewable energy and charging, outdoor companies will need to collaborate alongside next generation technology companies and build a model that contributes to recreation budgets, much as oil and gas receipts have,” according to study findings.
Caption: The ORR-Southwick Associates study clearly illustrates the disparity between growth in the overall federal budget and stagnant investment in the outdoor recreation industry.
Leaning on the data, Southwick explained the current federal outdoor recreation budget is not adequate to support a 10-year expected annual inflation rate of 2.8%. If outdoor recreation participation and spending grow at the projected rate, and the deferred maintenance backlog swells 3.4% each year, then the funding gap will widen even further. Southwick stressed the federal outdoor recreation budget must increase 74% by 2042 simply to maintain current levels of support. At minimum, it equates to an additional $6.9 billion in funding.
“What we know to be true is that healthy recreation economies contribute to healthy people, jobs, communities and our natural resources,” added Jessica Turner, president at ORR. “We also know that healthy public lands and waters are the backbone of this critical economic sector – and that [proper] funding for these places is essential today and into the future.”
Armed with comprehensive data and analytics, Turner and fellow industry advocates now turn their attention to meaningful solutions. Report findings underscore the importance of uniting the public, private and non-profit sectors to secure sustainable funding going forward, i.e., establishing a White House Commission on Outdoor Recreation.
In addition, Turner said passing the EXPLORE Act will not only ensure more equitable access to the outdoor recreation industry, but also update obsolete agency planning and processes, mitigate the impacts of increased visitation and support the growth of the outdoor recreation economy.
Industry professionals are encouraged to review the final technical report in its entirety, which will be published within a week.
