The Ukraine war and impacts on our little economy
Grand Enterprise Initiative
What’s the price of war here in isolated Grand County? Higher prices.
It’s hard to imagine that Vladimir Putin’s war in Ukraine could have much of an impact half-a-world away in the snow-covered Rockies.
But the truth is, it will have an impact.
It’s already very clear that gas prices are going to go sky high, but still not as high (adjusted for inflation) as the prices seen in 2008. My biggest fear about expensive gas, aside from the hit on my wallet, is the way it could discourage visitors from making the drive to Grand County.
And yet, the pundits are saying that they don’t think even $5-a-gallon gas is likely to greatly discourage Americans from getting in their cars and driving, especially when it comes to driving for vacation.
Why is that? In a word: COVID. There is huge pent-up demand in Americans to live, laugh and recreate the way they did three years ago, long before the COVID crisis. And now, and this summer, are the times when that pent-up demand is going to be released. High gas prices will be seen as an inconvenience but not a barrier.
I base this on the fact that we’ve already seen how extreme demand for visiting and vacationing in Grand County has fueled a minor boom in sales tax revenues and high revenues to the businesses that can manage to remain open and operating. Just go to Winter Park or Fraser any given weekend this winter and take a look at the long lines for restaurants, the crowded bars and brew pubs and traffic. It’s been busy.
And remember, much of this has happened while the shadow of COVID was still very real, thanks to Omicron and Delta. But the specter of more serious outbreaks of COVID has faded and people are just letting it all hang out. Look out for this summer, despite Putin’s war in Ukraine.
Don’t believe me? Here’s a paragraph from an article in the Wall Street Journal on this very topic:
“Michael Tran, managing director of global energy strategy at RBC Capital Markets, said that after two years of Covid-19 he expects consumers to hit the road even with high gasoline prices. The last time rising gasoline prices curbed demand was in 2008 amid a spike in oil during the financial crises, he said. Back then, gasoline rose to a record $4.11 a gallon, which equates to about $5.20 a gallon today adjusted for inflation, he said.”
Oh, there will be other impacts on our local economy, however. Food prices are going to continue to go up because of the war. Ukraine, after all, is one of the world’s largest exporters of wheat. Take that off the market and watch as prices for all wheat-based products go sky high. This might be good news only for those “no gluten” foodies out there, and for the many Colorado wheat farmers.
But once again, I don’t think that will dissuade people who want to dine out from doing so. And I doubt it will dissuade the rest of us from eating. It’s just going to cost more.
Of course if Putin’s war evolves into a nuclear conflict, all bets are off.
But short of that right now, my latest venture into the restaurants and bars in Winter Park and Fraser elicited this repeated refrain from the hard-working bartenders, waiters and restaurant owners: ‘It’s like Christmas break never ended.’
And like a war never started.
Patrick Brower is the Enterprise Facilitator for the Grand Enterprise Initiative. He offers free and confidential business management coaching to anyone who wants to start or expand a business in Grand County. He is also the author of the book “KILLDOZER: The True Story of the Colorado Bulldozer Rampage.” He can be reached by calling 970-531-0632 or at firstname.lastname@example.org.
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