What is the 10 year outlook of the US sporting and recreational goods rental market?
Hello! Thanks for using Wonder to request market information regarding the sporting and recreational goods rental market in the US. In short, the market size is $1.3 billion and has been growing at a rate between 5-10% CAGR for the past several years. The projected growth is 5% for at least the next five years. Millennials are the largest demographic segment participating in this market. Watersports and boating rentals are the fastest growing segments. Below, you will find a deep dive of our findings and methodology!
In order to answer your question, we searched through industry reports, academic databases, business intelligence websites, government databases, and trusted media sites. While many of the most recent market reports regarding the sports and recreational goods rental market are locked behind a paywall, we were able to harvest a wealth of helpful insights from the sample versions and previews of these reports. Additionally, we expanded the scope of the research slightly to include some historical contexts in order to help illustrate market sizing trends and growth patterns over time. We were only able to locate data which offers insights for a five-year projection, rather than 10, however, we have analyzed the trends across our historical and recent report data findings in order to provide an estimate of the 10-year projected growth.
Additionally, information pertaining to the overall breakdown of the market across different segments was not found to be publicly available, despite conducting research into each specific segment individually. All the market reports pertaining to these segments dealt with equipment sales overall, as opposed to rentals specifically so we have not included those findings. However, we were able to find a couple of helpful insights regarding the most popular market segments, as well as a list of pay walled market reports which offer an in depth review of each of these rental segments individually, which we felt might be interesting to you.
For the purposes of this report, the term 'recreational goods rental market' will heretofore imply that sporting equipment is included in under this term, as sporting equipment was illustrated as a key component in the overall recreational goods rental market across all of our researching findings.
market size and growth
In 2011, the recreational goods rental market in the US grew 10% from the previous year, and annual revenue was at $0.8 billion. The market was projected to reach $1 billion in annual revenue by 2013. Between 2011 and 2015, the market grew at a rate between 5.7% and 9.9% CAGR, and in 2016, the market raked in $1.3 billion in annual sales. Overall, our research findings revealed that the growth of the recreational rentals industry is "outpacing the average annual growth of other retail and service industries," and that recreational rentals currently rank within the top 40% of retail-based industries.
The industry's market share was triangulated by calculating the current market size against the overall U.S. consumer goods rental market size, which showed a combined annual revenue of $21 billion in a 2017 report. Our calculation -- ($1.3 billion x 100)/$21 billion -- places the recreational goods rental market share at about 6.19% of the total consumer goods market.
In regard to future growth, it has projected that the market size of this industry will continue to grow by roughly 5% CAGR over the next five years, and based on our collective analysis of the above findings, we believe it is likely that this industry will continue to grow at a rate between 5% and 10% over the next 10 years. We have determined this estimate on the basis that this growth rate has appeared steady since 2011, which is additionally supported by our research findings which reveal that overall interested in outdoor activities in America has also been growing steadily.
In regard to the demographics of this market, we were unable to locate publicly available information which directly reflects the demographics of the recreational goods rental market specifically, however, we were able to triangulate an understanding of the demographics of this market by analyzing the demographics of outdoor activity participants in the U.S.
For instance, our research findings reveal that Millennials are likely a key demographic of the recreational good rental market, as they are "twice as likely as non-Millennials to travel for a hobby" and are also more likely to travel with the purposes of seeking entertainment and outdoor activities. This might imply that these individuals are seeking out rental equipment on these travels since we assume doing so would be more convenient than purchasing and bringing their own equipment on vacation.
Additionally, the Outdoor Participation Report of 2017 revealed the following insights regarding the demographics of outdoor activity participants, which we feel are exceptionally insightful for this project:
-- 48.8% of Americans (144.4 million people) said they participated in at least one outdoor activity in 2016, which is 2 million more participants than those who said the same in 2015.
-- Areas of US with the highest rates of participation are as follows: Pacific region, 17% (California area);
West South Central region, 11% (Texas area);
South Atlantic region, 19% (Florida area);
Middle Atlantic region, 13% (New York area);
East North Central region, 15% (Wisconsin area).
--Outdoor participants represent a fairly equal number across male and female participants. The most popular age demographics are as follows:
12% for ages 18-24.
28% for ages 25-44,
37% for ages 45+.
-- The most common income demographics for outdoor participants are as follows:
21% for annual income between $25,000-$49,999.
19% for annual income between $50,000-$74,999.
32% for annual income of $100,000 or more.
-- Additionally, outdoor activity participants in the US are comprised of 73% Caucasian, 10% Hispanic, 9% black, and 6% Asian individuals.
Some additional insights gathered from this report show that 52% of survey respondents said they did not spend any money on sports or recreational equipment in 2017, which we assume could point to the rising popularity of rentals, as described in the market size and growth section above. The most popular reasons people give for why they get involved in outdoor activities are to get exercise, to be with family/friends, to stay fit, to admire scenic beauty and be close to nature, and to experience a change of pace. Conversely, 18% of survey respondents stated that they avoid outdoor activities because outdoor equipment is too expensive for them. This answer was the second most popular reason given for why individuals avoid such activities.
players in the market
*Please note that some insights from this section are derived from a report titled 'Recreational Goods Rental - The 2017 U.S. Market Research Report.' For these insights, the direct information can be found under the 'Description' tab of this report, which will bring up a pop-up window showing the data.
In 2011, the average revenue of a company within this market was $447,982. In 2012, this number rose to about $500,000 (or $0.5 million). In 2016, the average revenue per company in this market was $0.6 million.
In 2015, there were 1,956 companies operating in the U.S. recreational goods rental market. In 2017, this number was slated at 2,091 companies.
The NAICS Code for the U.S. Recreational Goods Rental industry was previously 532292, which changed to 532284 in 2017. An exhaustive search to locate the highest earning companies under both of these NAICS codes proved futile, as we were unable to locate a publicly available database which lists an abundance of companies operating under these codes. Additionally, none of the market reports we located identified any major players in this space. We assume the majority of players in this space are likely privately owned and operated small-medium sized businesses who operate hyper-locally, which may provide some reasoning as to why more information could not be located regarding the top players. Despite this, we were able to locate a small listing to companies who were operating under code 532292, and have investigated these companies to gain insight on their individual revenues and market share. We were not able to locate revenue information for all the businesses on this list, however below you will find a breakdown for those which the revenues were found to be publicly available:
1) Kualoa Ranch and Activity Club, Inc
Number of years in operation: 32 years.
Annual revenue: $111,848.
2) Outfitters Kauai Ltd
Number of years in operation: 29 years.
Annual revenue: $970,000.
3) Ohiopyle Trading Post Inc
Number of years in operation: 26 years.
Annual revenue: $3.3 million.
4) Peddling Pelican Bike Rental Inc
Number of years in operation: 31 years.
Annual revenue: $250,000.
market segment analysis
Our research findings reveal that the boating and watersport segment is the fasted growing segment of the overall recreational goods rental market. This is due in large part to the fact that "the public now views marinas as recreation destinations, instead of simply places where people store their boats." As a result, "nearly one-third of marinas now offer boat rentals and 18% provide water-toy rentals."
There has also been an increasing interest in stand up paddle board rentals, as stand-up paddle boarding has been one of the fastest growing recreational sports in recent years. In 2014 alone, the sport "grew by 38% compared to the previous year, with more than 2.7 million participants."
Additionally, we were able to locate a list of reports regarding the rental market size and growth of a range of market segments within the overall recreational goods rental market. These reports are locked behind a paywall, so we were unable to access this information, however, we felt they may be of interest to you for further research. This list can be accessed here.
To wrap it up, the market size is $1.3 billion and has been growing at a rate between 5-10% CAGR for the past several years. The projected growth is 5% for at least the next five years. Millennials are the largest demographic segment participating in this market. Watersports and boating rentals are the fastest growing segments.
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