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Outdoor startups see supercharged growth during COVID-19 era

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Two couples sitting by a campfire
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After years of sustained growth, the pandemic supercharged the outdoor recreation industry. Startups that provide services like camper vans, private campsites and trail-finding apps became relevant to millions of new users when COVID-19 shut down indoor recreation, building on an existing boom in outdoor recreation.

Startups like Outdoorsy, AllTrails, Cabana, Hipcamp, Kibbo and Lowergear Outdoors have seen significant growth, but to keep it going, consumers who discovered a fondness for the great outdoors during the pandemic must turn it into a lifelong interest.

Social media, increased environmentalism and high urbanization were already fueling a boom in popularity. There was a 72% increase in people who camp more than three times a year between 2014 and 2019, mostly spurred by young millennials, young families with kids and nonwhite participants.

But 2020 was a different animal: After months of shelter-in-place orders, widespread shutdowns and physical distancing, outdoors became the only location for safe socializing. In South Dakota, the Lewis and Clark Recreation Area saw a 59% increase in visitors from 2019 to 2020. In the pandemic year, consumers spent $887 billion on outdoor recreation according to the Outdoor Industry Association, more than pharmaceuticals and fuel combined.

And it’s going to continue to grow. Hiking equipment alone is supposed to reach a $7.4 billion market size by 2027, a 6.3% compound annual growth rate. Camping and caravanning is having an even more drastic moment. Without international travel, vacations shifted from flights to exotic resorts to domestic road trips, self-contained rentals and camping. In 2020, the market for camping and caravanning was almost $40 billion and is predicted to rise 13% to just over $45 billion this year.

After the initial and extreme drop-off in engagement early as national parks closed, private camping sites shut down and domestic travel ceased, many outdoor startups have had a breakout year. Outdoorsy, the peer-to-peer camper van rental marketplace, said it saw 44% of all bookings in the company’s history in 2020.

Campsite booking platform Hipcamp said it sent three times as much money to landowners in 2020 as compared to 2019. And it’s not just experienced outdoor veterans taking advantage of the work-from-home lifestyle: in 2020, Cabana, a camper van rental startup, said 70% of its customers had never rented a camper van or an RV before and another 26% had only done it once.

But a report commissioned by the Outdoor Industry Association showed that the most popular outdoor activities were ones that people could do close to home, not the traveling kind Hipcamp, Cabana and Outdoorsy traffic in. The three most popular outdoor activities for newbies: walking, running and bicycling.

But the pandemic did create a small boost for camping, climbing, backpacking and kayaking; fueled by an increase in women, younger, more ethnically diverse, urban and slightly less wealthy people pushing into the outdoors. This class of outdoor startups will need to engage the new demographic shift to capitalize on the pandemic’s outdoor boom because, according to the report, a quarter of those who started new outdoor activities during the pandemic don’t plan on continuing once it’s over.

Startups are increasing accessibility to the outdoors

But getting into the outdoors can be overwhelming: there’s gear to buy, skills to learn, exploring unfamiliar areas and the added stressor of safety. Outdoor startups are working to lower the barrier to entry to help grow their businesses.

“I think anytime you have like 2,000 articles with two dozen tips on how to use a product, that tells me that it is really, really too hard to use,” said Cabana founder Scott Kubly. “To me, that says there’s nothing but friction in this process. If you want to build something that’s mainstream, you need to make it super consistent and really easy to use.”

Kubly said only half a percent of the U.S. population takes a rental van or RV trip each year. Planning an outdoor adventure can be time-consuming — choosing a location, finding an open campsite, planning meals and water, and figuring out dump stations for trash or septic. That planning is multiplied tenfold if you are going for a road trip or backpacking and need to find new places every other night.

“Pretty soon, you’ve got a 10-hour planning process for a five-day trip,” Kubly said. “If you think about the planning to time spent relaxing, that’s a pretty crappy ratio.”

Unlike other industries where success is measured by “time spent on app,” Ron Schneidermann, CEO of AllTrails, said the metric he and his team live by is “time spent on trail.” And that’s not a metric that can be measured hourly, daily or even weekly in some cases. AllTrails frequently has to look back months or even years to see how its key metric is performing.

Gift Guide: Camping and backpacking gear that the outdoors lover in your life really wants

AllTrails uses hand-curated trail routes, precise filtering applications and its top workhorse, downloadable maps, to open up accessibility to anyone with an internet connection and a smartphone. AllTrails has made accessibility and ease-of-use for newbies its calling card compared to its mapping competitors, Gaia and OnX, that attract more serious cryptographers.

The switch to mobile has been key for AllTrails. The outdoor industry is probably one of the only sectors that has to consider offline usage as a key component of its strategy. As GPS has gotten better and storage capacities have increased, enabling offline usage takes some of the anxiety out of hiking and exploring the outdoors, but it also adds a challenge for engineering teams.

“The biggest technical challenges and complexities we have is how much of our mobile app’s utilization happens in an offline state,” Schneidermann said. “And how do you account for that? Ensuring that there’s that stability, that reliability and that trust with our users every time they go out without a data signal. It’s been a huge area of focus and investment.”

“Van life” is supercharging the travel business

While Ron and AllTrails are lowering the barrier to entry for local hiking, the rise in remote work has made an even more drastic shift to outdoor travel and living possible — temporary or permanent “van life.” Devotees are ditching tiny city apartments for converted vans with kitchens, beds and toilets that provide nomadic access to the outdoors.

Outdoorsy focuses mostly on vacationers and recently crossed over a billion dollars in sales with 40 million users. In 2019, the company raised $75 million from investors led by Aviva Ventures.

“When we started the company, we thought we were building a vehicle marketplace and what we learned very quickly was our users didn’t view it that way,” said Outdoorsy CEO and co-founder Jeff Cavins. “It’s an experience; hotel rooms that you have the ability to move with you.”

Every part of the outdoor industry has to act like a supercharged travel business. Outdoorsy and Hipcamp have expanded operations to other counties; 14 including Italy, France and Croatia for Outdoorsy and Australia, Mexico, parts of Europe and Canada for Hipcamp. Education and information have to be included along with maps, vans or rental gear. The businesses have to be able to provide information on gear, safety, weather, geographic region and specific skills like climbing, hiking, skiing or river rafting along with the main product.

Dallas Shewmaker, owner of Lowergear Outdoors, a gear rental service that ships nationally, says he spends as much time on the phone acting as an outdoor guide as he does renting out gear. Outdoorsy has created a concierge service and AllTrails offers curated trail guides to help bridge the gap for novices.

While Outdoorsy is a peer-to-peer model, Cabana is focused on actually building camper vans that are set up for vacationers not full-timers. Most built-out vans don’t have a space for luggage or require the seating area to be transformed into a bed each night and back to seating the next day. According to Kubly, guests don’t have time to get quick at the conversion so it ends up remaining in the bed state for the entire trip — not the optimal utilization.

Cabana’s vans also have grey-water tanks (containers to collect water from the faucet, shower and toilet) that are twice the size of a typical camper van so guests don’t have to empty the tanks during a typical two-week vacation.

Van rental companies like Outdoorsy and Cabana straddle three giant sectors: vehicle, outdoor and travel. And startup Kibbo, added one more — housing. Over the past five years, sinking costs of composting toilets, solar panels and satellite internet have made living off the grid while working full time much more feasible and desirable. Kibbo is capitalizing on the trend of nomadic lifestyles while offering a sense of stability by creating hubs where van lifers can park for a few days before taking off for the open road again.

“People want to get out and backpack in Yosemite for the weekend,” said Colin O’Donnell, founder of Kibbo. “But they always want to circle back to a place where they can work during the week, have reliable Wi-Fi, be productive, connect with people. It’s that central location that we’re providing. We’re lowering the barrier to entry for van life for a much broader community so that you don’t have to figure it out all on your own and end up living out of a Walmart parking lot.”

Opening up private land to fight overcrowding

Kibbo is part of a new movement to open up private land for public use. The dramatic growth in popularity and increased accessibility of the outdoors has led to overcrowding on public lands. In the past 10 years, Yosemite added 1 million more annual visitors to the park. And from 1999 to 2019, total national park visitation jumped 14%.

Ravasio initially started campsite booking platform Hipcamp to focus on public campsites but pivoted in the past few years to create opportunities for nature lovers to explore private lands.

“We’d find a cool campground in a national forest that people didn’t know about,” she said. “We’d put it on the homepage, and then we get hate mail. People were like ‘Stop, you’re blowing up our secret spots. You’re ruining it.’ That was a huge part of how we got into working with private landowners because our mission is to get more people outside. But all too often those places are really overrun and that impacts not only on the quality experience for people but for the wildlife and the environment and the ecosystem.”

Ravasio said Hipcamp offers access to nearly half a million acres of private land that’s only available through its platform. The company is generating new places to get outside for the public, while also creating alternative income streams for landowners so they can say no to development and clear-cutting. It’s also helped businesses impacted by the COVID-19 pandemic, like wedding venues, find ways to survive.

The overhauled Recreation.gov system, an online booking platform created by the federal government to compile campsites and permitting for national parks, state parks, national forests and county land, is an essential resource for many outdoor companies, including ones that focus on private land. An executive order from President Obama made federal data open-sourced to anyone in the country, which meant Ravasio could now import Recreation.gov data into Hipcamp’s API, consolidating all the information into one platform.

Hipcamp announced that it integrated its API with California’s state park system to show available campsites on its platform; to book a spot, customers will click over to the state park’s reservations system, ReserveCalifornia.

“I don’t really view [Recreation.gov] as competition,” said Ravasio. “You can actually see on Hipcamp how many sites are available at the Upper Pines campground in Yosemite in three weeks, for example. We have that data now. I view it as we’re building on top of this really amazing backbone of our public lands system.”

Even the federal government saw that demand for outdoor recreational vehicles was growing. In Q3 of 2020, Outdoorsy partnered with the U.S. Department of the Interior to become the exclusive camper van and RV booking option on Recreation.gov. Recreation.gov’s rentals page for RVs now links directly to Outdoorsy.

Fragmentation could lead to industry consolidation

While an outdoor vacation may at some point have been an outside-the-box, niche experience, it has fallen into the same pitfalls many other sectors have experienced as they move from subculture to mainstream. National parks are created with the lowest common denominator in mind. They need to be accessible to the most novice outdoors person.

But customers are seeking unique, custom experiences that don’t feel mass-produced — hence the rise of Airbnb over stodgy hotels. In response, the outdoor industry is updating old products for a new generation.

“Sometimes people will say to us, ‘well aren’t you guys just an RV park,’” O’Donnell said of Kibbo. “Millions of people love RV parks, just not our customers. We think that’s an outdated product made for a different generation. And while nature is incredible, camping at national parks is kind of generic, our generation wants to be in beautiful special places that feel magical and unique. And we’re not finding that at the old-style RV product.”

The pursuit of unique experiences created by niche businesses has resulted in enormous fragmentation in the industry. Initially, the internet was able to consolidate a lot of the outdoor recreation process. Instead of calling five ranger stations across three national parks to find an available campsite, campers can now log in to Recreation.gov or Hipcamp.

But industry growth has caused an even more intense splintering. The average outdoor adventurer has to deal with three or four businesses to procure gear, a vehicle rental, accommodations, a campsite, and hiking or other recreation information. It’s still overwhelming and could indicate a possible consolidation of this wide and sprawling industry on the horizon.

Just as Airbnb saw an opportunity to bring travel activities under its own umbrella with Airbnb Experiences, outdoor startups that focus on accommodations, like Outdoorsy or Hipcamp might also try to expand into outdoor activities. Outdoorsy already curates road trip guides, and adding climbing retreats or river rafting meet up points with local guides is a feasible next step.

Hipcamp could actually leverage the private landowners on its site to act as outdoor guides, which according to Ravasio many already do unofficially and unpaid. It’s entirely possible to imagine a world where AllTrails partners with Sports Basement or REI to help newbies plan their first multiday backpacking trip, including renting camping stoves and backpacks, to drive AllTrails’ millions of users in store.

If these outdoor habits stick past the pandemic into 2022 and beyond for the majority of Americans, the outdoor industry is poised to become an even more powerful force in travel.

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