Background
Americans have a love affair with travel, and with their cars. As COVID lockdowns started in March, we changed to sitting at home. But as anyone who has been on the road recently knows, traffic is picking up. If many of us are still working from home, where is this traffic coming from? Are we seeing that COVID drives Americans outdoors? This post examines how we have moved outdoors, COVID be damned. Or, at least, finding ways to get outdoors separated from other people.
Findings
- Spending on outdoor stuff jumped: Cars, recreational vehicles, and sporting goods spending are all above pre-pandemic levels.
- Traffic is up: You already knew this! One example (below) – Golden Gate bridge traffic has rebounded even though downtown San Francisco is still a ghost town.
- Parks are popular: Visits to national parks are rebounding strongly toward pre-pandemic levels. See the Yellowstone chart example below.
- Motorhomes are renting like hotcakes: RVShare, the largest P2P motorhome rental/sharing service, reports 50% more volume of rentals this Labor Day vs. year ago. Most motorhome rental agencies are reporting dramatic jumps in rentals.
- So are vacation home rentals: AirBnB reported in June that it was actually seeing higher rental volume than a year ago as people are desperate to get away from their city living.
Implications
If Americans won’t stay home, what does it mean? Certainly increased spread of COVID is a risk. Those providing products and services to travelers need to make them and market them as hygienic. We’re seeing AirBnB and motorhome rentals advertising empty time between renters, and complete sanitization wipe downs. For those Americans who worry about the virus but “need” to get out, they will seek cleanliness.
From the financial services perspective, this is an early indication that the rise in the personal savings rate may be a chimera. Recessions usually depress car sales…but not this time? Clients may need counsel to not go crazy spending to get out of their COVID grumpiness.
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The small print
The spending data comes from the BEA. The jumps in spending are not only above pre-pandemic levels, they’re also above last year’s June spend levels. This means that it’s not just a seasonal effect.