INFLATION AND DEFLATION: A Quick Course in Outdoor Recreation EconomicsPosted: September 8, 2010
Those of you who know me are probably falling over with laughter at the mere thought of me taking on anything to do with economics. However, we need to discuss inflation and deflation: The inflation of ratings and qualifications concurrent with the deflation of actual injuries and other issues.
In the past ten years, all North American Rivers and probably most of the world’s rivers have gotten harder to run. I make that statement with a straight face because I have read brochures from all over the world describing the difficulty of a river trip. The Arkansas River has two guidebooks that were written over fifteen years ago. Both guidebooks describe Brown’s Canyon between Buena Vista and Salida, Colorado as a Class III run. Both guidebooks describe the Royal Gorge just west of Canon City as a Class IV run. However, the majority of brochures from the 60+ rafting companies on those rivers describe Brown’s Canyon as Class IV and the Royal Gorge as IV+-V. The river got harder to raft, kayak and boat.
Scarier still, the State Government supports this inflation of the river rating, even though their own documents state those sections are Class III and IV. Either the river has gotten much more difficult or the outfitters on the river have inflated the difficulty in an attempt to market the river.
Let us look at this seemingly innocuous marketing technique and the legal effects it may have.
Scenario I: The owner of the Company is on the stand and is describing Brown’s Canyon. There is a tendency for the owner to want to downplay the difficulty of the river to prove it is a safer trip. The Owner will tell the jury how easy the trip is, and how the guidebook describes Brown’s Canyon as a Class III run. On cross-examination, the owner is presented his own brochure that describes the run as a class IV run. During closing arguments, the Owner is described as a liar. He says one thing on the stand, but advertises another thing to the public.
Scenario II: Same as above, but during cross examination the Owner is pressed on the differences. The Owner states that he is just increasing the difficulty for marketing purposes. The Plaintiff’s attorney presses the issue with the owner eventually admitting that he lies to the public in order to get the public’s money.
Scenario III: The Owner is on the witness stand and is presented with his own brochure. He states that Brown’s Canyon is a Class IV run. (What choice did he have, his brochure said it is class IV.) When asked what other outfitters are considered “good outfitters in Brown’s Canyon, the Owner describes several. He is then presented with both guidebooks, which clearly state that Brown’s Canyon is a Class III. He is also presented with the good outfitter’s brochures which state Brown’s Canyon is a Class III run.
Scenario IV: Same as III, however, the owner insists after being confronted with his brochure that Brown’s Canyon really is a Class IV run. The Plaintiff then brings in documentation, magazine articles, books and other evidence to show that running a Class IV river requires additional guide training, better boats, and more safety equipment, etc. The Owner has, based on his testimony, proved he did not meet the standard of care for a Class IV river.
Each of these situations places the Defense in a position where you never want to be! The person on the stand is proven a liar or at least admits he or she is misleading the public. The final scenario is death by stupidity. Instead of “can we win,” the discussion turns to how much will this cost.
I was in Canada at a Risk Management Conference where I brought this idea up and the Canadians laughed. They all knew about the American penchant for inflating the risk and thought it comical. Canadian law does not allow commercial rafting on Class V Rivers. The group named numerous rivers they had run that they believe were overrated by the American Outfitters.
Rivers are not the only things that suffer inflation. Guided mountaineering and rock climbing trips are inflated. Staff qualifications are a serious issue.
Many times brochures are printed to last several years. A brochure printed with the hope that it will last for years can create a serious inflation problem. It is common to see staff qualifications placed in the brochure. A group of employees/guides who have worked for one company while going through college may acquire four years of experience and EMT training. A brochure printed at the height of this staffing success would be remiss to not highlighting the guide experience and qualifications. However, eventually those guides move on and the company is faced with another group of first year guides with basic first aid training. The brochure touts the previous group of guides’ experience and the cost of reprinting the brochure is high. So, the outfitter continues to use the old brochure.
Scenario V: A large group arrives at your shop for a five-day backpacking trip. The Group Leader does this annually and does not recognize any of the guides. After talking to several, he realizes last year’s experienced guides have moved, and this year, there is a brand new crop of guides. He walks into your office with a brochure in his hand and is concerned about the trip.
Scenario VI: The Company Owner is on the stand for a trial where the issue is a decision made by the guide. The guide has already been on the stand and testified to her experience and qualifications, as well as to that of the other guides in the group. The Owner is faced with his own brochure, which advertises experience, training and qualifications not met, by any of the guides on the trip.
In each of these hypothetical scenarios, the outcome could be disastrous because the information provided to the public was not true.
In the same way, Deflation is also another problem in the outdoor recreation or hospitality industry. Deflation occurs when someone is hesitant about taking the trip and that person, group or leader is assured the trip is not as difficult as his or her mind has imagined it to be.
Scenario VII: A local school district is advertising for bids. They want to do a three-day canoe trip for their middle school. A local raft company has a permit for a class II section of river but nothing else. The Raft Company is competing against several canoe companies for the business. During the pitch meeting with the school district, the Company owner assures the School District that Class I water will bore the middle school kids, and they should under take a Class II trip. The Raft Company also provides more gear because they will include a raft to haul gear on the river. During the trip, the canoes are continually over turning, and the kids are miserable. The School District wants their money back.
Scenario VIII: The rock-climbing guide is having a slow week. A Midwest family is in a park and thrilled by the rock climbing. Climbing guide assures them that climbing is easy and anyone can do it. Later while frantically struggling on a pitch the Midwest customer falls and suffers a heart-stopping fall.
In both situations statements made at the outfitters operation have come back to haunt the outfitter. That line between bringing business in while not scaring it away is sometimes quite thin line and easily crossed.
In addition to the obvious issues in the last two scenarios, an additional problem arises. How are the statements made by the Defendant Company justified with the information in the release? In the last scenario, the Midwest Family after reading the release may ask more questions because the properly written release is honest about the difficulty. One Court in Colorado has stated that a statement made by a guide can void a release. As such, any comment made to induce someone to undertake a trip may blow the release right out of the courtroom.
Most of us by now have learned that any statement concerning risk or injuries can be dangerous. A brochure that advertises “No major injuries” is now trash after the first injury occurs. Similarly, any statement as to how “safe” the operation will always come back to haunt the company.
Equally dangerous I believe is information communicating a “family” activity. No parent is going to place his or her child in a dangerous position. A family-oriented activity is therefore, by definition “safe.” I have yet to see this occur, but I believe a sharp attorney can take the issue of marketing in a brochure and compare it to the information in the release. If the activity is as dangerous as the release states, advertising it as family oriented could be problematic in court.
Although statistically, we might be able to argue that compared to numerous other family activities, the Outdoor Recreation Activity was safe; a jury will undoubtedly concentrate on the reality. The activity was advertised as family oriented. “After hearing what happened, I would not allow my child to go. Therefore, it was not a family oriented activity; it was dangerous. The Outfitter lied.”
Contrast this with the ethical duty to inform your guest, participant or client of the actual risk of the activity, and you may believe you are walking a tightrope. However, the lines are broader than you might expect. The ethical viewpoint is probably the better way to view this entire issue. Is what you are telling the person the truth? Is what you are telling the person what you, as a parent would want to hear if your child was undertaking the activity? Would your mother accept what you are saying or would your ear be yanked, as you are lead to a corner to “contemplate your actions?” If you can pass those tests, you should not be running any liability traps.
What do you think? Leave a comment.
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