Problems plaguing small outdoor recreation businesses explored at U.S. Senate hearing

WASHINGTON — Operators and promoters of outdoor recreation companies said at a U.S. Senate hearing that small tourist businesses like theirs are a critical part of the rural U.S. economy facing multiple challenges.

Witnesses before the Senate Committee on Small Business and Entrepreneurship on Wednesday listed climate change, inflation, high gas prices and a potential government shutdown as areas of concern for the future of their businesses. They also emphasized the significance of conservation practices that make the outdoor recreation industry thrive.

Sen. Jeanne Shaheen, a New Hampshire Democrat who chairs the committee, said outdoor recreation is one of the fastest growing sectors of the economy, generating $862 billion in total economic output last year.

“The outdoor economy is outpacing the rest of the American economy,” Shaheen said.

She said that in 2021, gross domestic product for the outdoor recreation economy increased by 18.9%, compared to the overall economy’s 5.9% GDP increase.

“The outdoor recreation industry is built by small businesses and entrepreneurs,” she said. “Now because the outdoor recreation industry is driven by small businesses, it is a foundational part of many rural communities and is critical to their economic well-being.”

Ranking member Joni Ernst, an Iowa Republican, said a small business can be found “operating in every sector of the outdoor economy.”

Shaheen said such small businesses face “magnified” challenges, including limited broadband access, workforce shortages and problems accessing capital.

She said maintaining a healthy environment is key for the survival of outdoor recreation small businesses.

Outdoor recreation bill

Jessica Wahl Turner, president of Outdoor Recreation Roundtable, advocated for America’s Outdoor Recreation Act. Outdoor Recreation Roundtable is a coalition of outdoor recreation trade associations and organizations — most of which are small businesses, Wahl Turner said.

U.S. Senate Energy and Natural Resources Committee Chairman Joe Manchin III, a West Virginia Democrat, and ranking member John Barrasso, a Wyoming Republican, re-introduced America’s Outdoor Recreation Act in March.

The legislation aims to “increase and improve outdoor recreation opportunities across the nation while improving infrastructure and driving economic growth in rural communities,” according to a committee press release.

“While our cumulative economic power is mighty, unlike other industries with similar economic impact, we are a mile wide and an inch deep, so our small businesses do need support,” Wahl Turner said.

To better support small businesses, Wahl Turner’s written statement urged Congress “to focus on providing stability for businesses, increasing access to and improving infrastructure on healthy public lands and waters, and growing workforce pipeline opportunities and rural economic development tools for communities utilizing recreation to revitalize their economies.”

Other witnesses included Chris Fox, the chairman of Iowa Ducks Unlimited, which pushes for wetlands conservation, and Andrew Drummond, the owner of Ski The Whites, LLC. Ski The Whites is a backcountry ski store in Jackson, New Hampshire.

To strengthen conservation efforts, Fox called on Congress to cut back on regulatory “green tape” for conservation programs, enhance conservation on working farm and ranch land and expand conservation programs on tribal lands.

“These efforts will result in more waterfowl and more wildlife, and stimulate greater economic activity in our tourism industry,” Fox said. “They will also make our air and water cleaner, recharge precious groundwater systems and fortify our communities against the threats of extreme weather.”

Small business loans

Drummond, who said this is his eighth year of business, advocated for the SBA 504 Loan program, to which he said he owes his success.

For the first few years of running his business, he grappled with anxieties about failure and “trying to make this whole thing work.”

“As soon as I got that loan, that anxiety disappeared and I could really focus on my business,” Drummond said.

U.S. Sen. Ben Cardin, a Maryland Democrat, said one of his major concerns was to try to make financing more available.

“We’ve tried to provide greater opportunities within the SBA program for smaller small business loans,” Cardin said.

Okoboji tourism

Rebecca Peters, the Okoboji tourism director at Vacation Okoboji in Arnolds Park, Iowa also testified at the hearing.

“Okoboji” refers to the Iowa Great Lakes area in the northwest region of the state. These lakes include Spirit Lake, West Lake Okoboji, East Lake Okoboji, Upper Gar, Lower Gar and Minnewashta.

The area is one of Iowa’s largest tourist destinations, according to the Vacation Okoboji website.

Peters said that while Dickinson County has fewer than 18,000 permanent residents, 40,000 to 60,000 people visit the area on any given summertime weekend.

Many of the nearby lodging properties are run by small businesses, Peters said. Small businesses in Okoboji also offer boat sales and rentals, sell fishing gear and bait, serve as guides and run restaurants.

“It’s the small businesses who enhance our visitor experience and make up the majority of our local economy,” Peters said.

She said that water conservation efforts in Okoboji have helped improve water clarity in the last 25 years from 10 inches of visibility to 20 inches of visibility. She said the high water quality draws visitors to Okoboji each year.

“A healthy watershed and clean water are a key aspect of outdoor recreation in Okoboji,” Peters said.

Threat of natural disasters

Wahl Turner said the seasonal nature and “narrow operating margins” of small businesses in the outdoor recreation industry make them more vulnerable to natural disasters.

“Wildfires, smoke or even the threat of wildfire closures can leave small businesses with no insight into when we will be open or when infrastructure will be rebuilt,” Wahl Turner said.

Wahl Turner said it is important to build more climate resilient infrastructure.

Peters said inflation is another area of concern for Okoboji small businesses, which face “rising input costs.” Visitors are less likely to vacation with lower disposable incomes, she said.

“In the past year, many guests have had to shorten their stay or cancel their trip altogether,” Peters said.

Gas prices also affect Okoboji’s visitor economy, she said, since the area has fewer visitors when there is an increase in gas prices.

Drummond said there’s a “significant” decrease in customer visits to his store during winters with less snow. He said that if cities like New York or Boston have less snowfall, people are less likely to turn to winter activities.

He said that his store’s sales decrease by 50% during weekends with inclement weather. This year saw New Hampshire’s wettest summer on record, Drummond said, “with many of the rain events occurring on the weekends.”

He said this caused a spike in gear rental cancellations, and contributed to “significantly less” day-of rentals.

The increased reliability on man-made snow has also been costly for small businesses, Drummond said, as it requires a “ton of money to create.”

Impact of a government shutdown

With two weeks remaining until federal government funding expires on Nov. 17, a looming partial shutdown could have serious consequences for small businesses, Wahl Turner said.

“As we near another possible government shutdown there is no greater priority for small business certainty in the outdoor sector than keeping the federal government open,” Wahl Turner said in her written statement.

Wahl Turner said businesses operating in parks or forests may close down, and those in nearby communities may have to cut hours and staffing. Small businesses sometimes don’t get those workers back once they’ve been laid off, Wahl Turner said.

While federal employees are paid back after shutdowns, small businesses are not, she said.

Wahl Turner called on Congress to keep the government open.

“Small businesses are scrambling again for the second time in two months,” Wahl Turner said.