2024 Economic Forecast for the Outdoor Hospitality Industry; A review of industry & economic trends

Click Here to Download the Full Presentation: NAI Outdoor Hospitality Brokers Economic Outlook

Our managing broker, Bob Kaplan, presented an Economic Forecast for the Outdoor Hospitality Industry at the Outdoor Hospitality Conference & Expo (OHCE) 2024 conference. This presentation explores key trends, opportunities and insights for RV park and campground stakeholders.

Macroeconomic Environment
Over the past year, we’ve seen some welcome changes in the broader economy. Both the Federal Funds Rate and inflation have been on a downward trend, offering a bit of relief. Unemployment remains impressively low, though it’s slowly edging back toward the 10-year average, and job openings are following a similar path. Inflation is cooling off, but as always, volatile gas prices could shake things up. Additional good news is that the U.S. economy seems to be bouncing back, with GDP growth estimated at a healthy 3.4% for Q3 2024. 

Operating Trends
When it comes to camping, the numbers tell an interesting story. Fewer households were camping in 2023 compared to 2022, and a slight dip is expected again in 2024. That said, the proportion of households that still identify as campers is comfortably above where we were in 2019, showing there’s still a strong base of enthusiasts. Camping’s share of leisure travel has slipped a bit, but it’s still making up more than a quarter of all leisure trips—a significant slice. We’re also seeing some shifts in demographics: Gen Z’s share of new campers is shrinking, while Baby Boomers are stepping in to fill the gap. Meanwhile, RV sales, outdoor gear, and boat sales have softened, but the demand for glamping and cabin stays is picking up steam. On the hospitality side, hotels are facing some headwinds, with occupancy and revenue per available room showing signs of weakness.

Property Value Drivers
Average revenue per park has taken a hit year-over-year while the long-term growth trajectory remains strong. Looking ahead, there’s exciting news: over 18,000 new campsites are in the pipeline across the U.S. by 2027. This kind of expansion points to continued confidence in the sector.

Investor Trends
From an investment perspective, the outlook is cautiously optimistic. Capitalization rates are expected to decompress moderately, shaped by broader economic trends and more active buyers. At the same time, investment volume stands to gain from lower borrowing costs and an improving economic climate. Private equity funds have built up dry powder, waiting for the right opportunities in a relatively slow deal environment. Hospitality investors are showing growing interest in alternative accommodations, such as glamping and cabins, as they navigate these changing times.

Conclusions
The outdoor hospitality industry has its challenges, but there are plenty of reasons to be optimistic. Despite some operational  headwinds, camper nights and family camping participation remain well above 2019 levels and long-term growth trends are solid. Glamping, in particular, is thriving with double-digit growth, capturing the attention of both consumers and investors. As interest rates move back to more typical levels, there’s also significant capital waiting to be deployed, especially into outdoor hospitality. While the path ahead may not be without its hurdles, there’s a clear sense of opportunity and optimism in this space.