Looks like we're in store for a gas shortage this summer -- for people in the U.S. anyway. Talk of a gas shortage was making the rounds weeks before the May 7 cyberattack on the Colonial Pipeline, which caused gas shortages throughout the Southeast.
If you can recall just a couple of weeks prior to that disaster, you might remember the issue was -- and still is -- a supply chain situation, not an actual fuel shortage. There's supposedly plenty of gas. The problem, according to news reports, is a lack of truck drivers to bring gas to the stations.
Let's further explore this and what it might mean for summer travel, which should be of interest to commercial real estate investors who invest in the travel and hospitality industries.
Vacation hotspots could suffer most
With an unreliable gas situation, many would-be travelers won't want to take the risk of being stuck in the middle of nowhere with no place to fuel up. Or perhaps they make it to their destination, but there's a gas shortage there, making it difficult to return home. (Queue the Psycho theme song.)
Vacationers might instead try their luck on airplane travel, but that isn't ideal yet, either. As a result of travel difficulties, many people might just throw in the towel and opt to vacation at home, like in their own backyard.
With fewer people traveling, many vacation hotspots will not see as many tourists, and many hotels and vacation rentals will probably experience vacancies. One action plan for hotels and vacation rentals has been an appeal to the locals. It can work to an extent, but locals usually aren't prime customers since, being locals, they likely live near whatever the attraction of the area is and, therefore, don't need to stay at another property to partake in area fun.
What's up with the drivers?
CNN has reported that 20% to 25% of tanker trucks cannot be driven for lack of qualified drivers. The National Tank Truck Carriers Association says the driver shortage exceeds 50,000. Industry experts expect this number to rise to 63,000 fewer truckers by the end of this year.
The trucking industry has been losing drivers for a while now, but the pandemic exacerbated the problem. Because people were under stay-at-home orders, they weren't buying gas, and that caused tanker drivers to find other work. Also, tanker truck driving schools were shut down during the pandemic, so people who were interested had no place to learn how to drive a tanker truck, which is a difficult job.
Measures are now being taken to get more people driving trucks again, such as lowering the age requirement to 18 from 21 and paying the drivers more. Wages are already up 6% for truckers from last year at this time. They might need to go up more, and any increase in what it costs to truck goods will most likely cause the price of those goods to rise. Regarding gas, prices are up 62% from last year, and they could go up even more.
The Millionacres bottom line
Investing in the travel and hospitality industries is pretty risky right now. Air travel is still wonky -- the CDC is still urging people to not partake in any nonessential trips -- and now gas shortages at the stations could potentially put a real kink in summer road trips. Just as people have been chomping at the bit to go somewhere, an imminent gas shortage could keep them home once again. If you invest in travel and hospitality, it might be time to just wait and see.