Advice On How High Gas Prices Will Affect Real Estate, Travel, Life
posted on 10/07/2009
Whether due to higher taxes, lower oil industry subsidies, or carbon tax credits, we are likely going to see higher gasoline prices. How will this affect business and leisure industries?
1. Housing close to business centers and employment centers will go up in value. Housing far from city centers and employment centers will become more expensive.
How to cope: If moving, move to a location close to a high density of employers or close to a transportation system that will allow you to get to any job. Do not buy a home close to just one employer; you risk a home that will fall in value as well as be difficult to sell if you need to find a new job.
2. Business travel by plane and car will become far more expensive.
How to cope: Have large organizations break into regional conventions instead of a single international one. Alternatively, create virtual conventions or online events.
3. UPS and USPS postage rates will go up for mail and packages. Flat rates may vanish.
How to cope: For small businesses, in the short term, stock up on forever stamps now. Make mailings leaner and lighter. Consider sharing space on mass mailings with a companion product or service provider to defray the cost. Focus on digital mailings over paper ones. In the long term, reduce shipments by going in bulk or using regional / local manufacturers to provide heavy or volume goods. Distributed distribution closer to the customer with orders sent digitally, instead of a single distribution point shipping all over the nation, may become a more economical model.
4. Travel to work will become more expensive to employees.
How to cope: Create more internal positions that allow partial telecommuting to save on travel cost. Coordinate car pooling for employees or subsidize van-pools in lieu of wage increases. Van-pools and public transit passes subsidized by the employer are often available as a tax deduction that may increase as gas prices rise.
5. Travel by private plane will become much more expensive.
How to cope: Instead of owning a company aircraft, own a fractional share of a jet or aircraft. Locking in long term fuel contracts may also bring down the fuel cost.
6. Jet skis, snow mobiles, and motor boats will become prohibitively expensive to operate.
How to cope: Business that sell these craft should explore other products to add in addition to these products. Boat sellers may see row boats, kayaks, and sail boats become more popular due to lower operating cost. Expect leasing for the week or the weekend to become more common than owning it, similar to leasing of cars instead of buying them out right. Inventory management costs will rise under this business model.
7. Operating costs for trucks and vans will rise.
How to cope: Reduce shipping in volume. If you must ship material and goods, pack lighter to reduce fuel charges. Or pack items with less packaging so that more of them fit within one vehicle load, so that the travel cost is more efficient per package.
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