Ochenski

Future tanking: High gas prices kill motor recreation

| May 22, 2008
The upcoming Memorial Day weekend traditionally kicks off Montana’s tourism and summer recreation season. Campgrounds open; folks head into the forests, out on the lakes and down the rivers following their favorite outdoor pursuits. But this year it’s likely we’ll see considerably fewer giant RVs on the road and a significant cutback in motorized recreation overall due to the runaway cost of gas and diesel, the financial collapse of the housing and mortgage markets, and skyrocketing prices for food and energy that are putting a big hit on citizens’ pocketbooks.

The past decade saw significant growth in RV sales and use, with even Wall Street financial advisors predicting that baby boomers would take to the road in palatial style for years to come. Now, however, those predictions seem as foolish as the early proponents of nuclear power, who infamously promised that nuke plants would produce “power too cheap to meter.”

Take this analysis, which was put out by investment advisor Hilary Kramer. “Gas prices continue to go up without any sign of improvement, and sales performance of RV makers continues to fall. Even the boomers with expendable income are finding it just doesn’t pay to travel with a vehicle that typically only gets between seven and 12 miles per gallon. With gas prices solidly in the $3-plus a gallon price range, we’re looking at one expensive cross-country road trip! You might as well fly.”

Sound familiar? Believe it or not, that prediction was made a full year ago. Kramer, the finance editor for America Online, is also on the Wall Street Journal’s Women in Business Advisory Board, and is a columnist for the New York Post—not exactly a granola.

But who needs a financial analyst to give us a firm grasp of the obvious? Just drive by any RV lot these days and you’ll see acres of those massive aluminum dinosaurs roasting in the sun, their sides extended like overdone Jiffy Pops as they slowly oxidize while waiting to be sold. Nationwide RV sales are down 30 percent over the last three years, with even more decreases expected this year.

Not coincidentally, the same phenomenon is slamming the leisure boating industry. A story in this week’s New York Times details the rising tide of defaults–and repossessions–of luxury boats. “From 2000 to 2006, retail sales for the recreational boat industry rose by more than 40 percent, to $39.5 billion, while the average loan amount more than tripled to $141,000. Last year, as real estate faltered, the gears went in reverse. The number of boats sold fell 8 percent,” the Times stated. The reason? According to the article, “Many boats are fuel hogs, and rising gasoline and diesel prices meant a weekend jaunt could cost hundreds or even thousands of dollars.” As the repo man interviewed for the piece quipped: “I used to take the weak ones. Now I take the whole herd.”

According to the Wall Street Journal, boats aren’t the only “herd” being thinned. A month ago an article reported that Arctic Cat, a manufacturer of snowmobiles and ATVs (All Terrain Vehicles) watched its stock tumble 18 percent overnight due to “lower than anticipated all-terrain vehicle sales.” Arctic Cat is not alone in its misery, as the ATV industry overall is experiencing significant shortfalls in projected sales that became increasingly apparent with the so far unstoppable rise in petroleum costs. While it’s certainly true that the machines themselves don’t use much fuel, the gas or diesel needed to get them to the trailhead is quite another story.

For snowmobiles, the tale is even worse. Not only are they hit by the same financial and fuel factors as the other segments of the motor-sports industry, the lack of snow in warm, dry winters has simply discouraged people from making the leap to buy an expensive new machine when there literally may be nowhere to ride it.

So what does all this mean for Montana? Well, for one thing it means our recreational planners ought to get real about what’s going on and quit planning for a future that becomes increasingly less likely with each passing day, and each rise in the cost of gas. The recent plan to electrify five Montana state parks to service RVs comes to mind. Spending hundreds of thousands of dollars to cater to a dying industry makes no sense whatsoever in light of the existing conditions.

It also means forest planners might want to reconsider just where the so-called “balance” lies in allocating motorized and non-motorized use of trails. While virtually every agency prediction is for increased use, the economic realities of today—and more importantly, tomorrow—means we may well see considerably less use of ATVs in the future.

None of this is particularly bad news for either the environment or Montana’s long-standing debate between motorized and non-motorized recreationists. For decades now, proponents for new wilderness in Montana have been stymied by well-organized, industry-funded motorized recreation groups. The motorized recreation lobby in Washington, D.C., has likewise been ferocious in its opposition to what it considers “locking up” federal lands through wilderness designation. Now, however, with the scales of economic fortune turning against them, it is likely that both the lobby’s membership base and its commensurate political influence will decline in relation to the plummeting sales of gas-powered toys.

Concurrently, as funding for federal land management agencies declines, there’s little or no money to address the impacts from motorized recreation, such as noxious weeds, trail destruction and stream sedimentation from erosion. With tight budgets, it’s obviously a lot cheaper to manage non-motorized recreation—which may well influence where the feds go once the facts sink in.

So take heart, Montanans. While it’s unlikely that motorized recreation will entirely disappear, the upside of falling “thrillcraft” sales promises good news for the landscape, the wilderness debate and Montana’s quiet and clean environment.

Helena’s George Ochenski rattles the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at opinion@missoulanews.com.



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