Description: In the early days of the Covid-19 pandemic when air travel was heavily disrupted, Canadians directed their vacation spending towards things that would allow them to spend time outdoors; purchases such as travel trailers, RVs, ATVs, and camping gear. But a combination of the bounce-back from Covid travel restrictions and a decline in discretionary spending due to the uptick in inflation, has hit so-called “pre-trip expenses” fairly hard. Economist Eric Desjardins of Statistics Canada said last year saw a decline of over 10 percent in spending on “major durable goods for outdoor recreation.” For RVs in particular, a decline in sales of 20 percent has placed buyers in a very strong position.

Date:  April 14, 2024

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/calgary/new-rv-sales-down-1.7168266

Discussion points:

1) Did you or your family develop a new interest in outdoor vacations during the pandemic? Did you purchase any additional gear?

2) If you were an executive with a company specializing in the outdoor vacations market, what strategies might you recommend to deal with this downturn in demand?

3) In Chapter 6 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a section “Valuing Inventory at the Lower of Cost and Net Realizable Value” for Learning Objective 5. If you were an accountant at a dealer of RVs, how might this section impact your valuation of inventory on the lot, given today’s market?