The coronavirus pandemic has brought a number of challenges and changes to the real estate market. Hotels, malls, restaurants, and countless other industries have been brutally impacted by closures and travel restrictions. Recreational and outdoor activities, however, are seeing record demand as people look to get outside as a safe alternative in the current climate. L.L. Bean, Dick's Sporting Goods (NYSE: DKS), and Camping World (NYSE: CWH) all had stellar revenues in 2020 compared to years prior, topping original estimates for 2020 performance. This may make investors wonder if this trend is here to stay.
Not all trends are here to last
At first glance, it may seem like outdoor equipment, recreational vehicles, and other outdoor apparel and equipment retailers are a sure bet moving forward. However, it's important for investors to be able to identify what trends are short-lived and which ones represent more long-term shifts in preferences.
Getting outside is wonderful, but the current boom in outdoor recreational demand likely won't last long. As vaccines continue to be distributed worldwide, hope is on the horizon that travel and other gathering and social activities will be able to resume normally soon. This means these companies, as well as other outdoor retailers, will likely see sales slow moving forward.
While only time will tell how open travel will be in summer, right now it appears the summer of 2021 is positioned to be another restricted summer, which will push more consumers outdoors, similar to the trends we saw in 2020. That means there could be a short-term wave investors can ride. Investing in the companies directly is always an option, but seeking out retail real estate investment trusts (REITs) that lease to these companies is another way to gain access to this booming sector.
While I personally feel identifying long-term changes in the market rather than short-term trends is important, there is opportunity here. Companies like the ones above have been supported and patronized by outdoor enthusiasts for decades and will continue to see support moving forward. Additionally, there's a chance long-term trends of shifting to more outdoor activities are here to stay, as people may have discovered a love for a new activity.