OCEAN CITY – A caravan of local business owners and members of the Ocean City Hotel-Motel-Restaurant Association (OCHMRA) came before the City Council Tuesday to stress the point that tourism is the lifeline of our community, a lifeline that needs to be revived.
At Tuesday’s work session, the OCHMRA presented a united front, giving several speeches on the state of the industry and requesting more money for tourism marketing and advertising.
OCHRMA President Greg Shockley, owner of Shenanigans, began the presentation with a statement that summarized the Association’s goal.
“We’re here today to ask for more money, it’s as simple as that,” Shockley said.
Shockley said the tourism industry simply needs additional funds to be dedicated to marketing and advertising.
“The tourism in this town drives this city and in our opinion the marketing is lacking,” he said.
Shockley also referred to the increases in room tax.
“Room tax is an easy way to make money. We feel its unfair to add a burden to the people we are trying to get to this town,” Shockley said.
With increasing prices for visitors and a plateau in advertising spending, Shockley sees a dim future for tourism if immediate action is not taken.
John Tremellen, representing the Princess Royale, also spoke on the decline of tourism.
“Our profit margins are decreasing,” he said.
Tremellen explained that staying open all year and having an extended season is not always a winning proposition for hotels.
“Unfortunately the prime summer season has suffered,” Tremellen said.
Tremellen also addressed the decrease in advanced bookings this year, explaining that some businesses are down double digits this year in advanced bookings with others down 6 percent.
Tremellen proposed an idea for bringing more money to the town that could be funneled into the advertising budget. According to Tremellen, of the 25,000 condos in town, only 28 percent or 7,000 have rental licenses. He suggested that the council consider having all non-resident owners purchase noise or business permits that would result in $2.5 million for the town.
Louise Cropper, an experienced member of the OCHMRA, spoke about the changes the town has seen over the years.
“Back then, the tourists just came to town and it was a great thing,” Cropper said of past years.
She explained that the town is now competing with other factors such as self-owned condos, the shorter school summer vacation and alternate vacations such as cruises or all-inclusive packages.
“We need to show them that the Ocean City that they’ve known for years is now even better,” she said. “We also need to reach those who have never been to Ocean City.”
Cropper added that the way to achieve this is through increased marketing and advertising.
Cropper also compared the advertising budgets from 1997 and 2008 with $1,098,149 allotted for the 1997 budget and $1,761,664 allocated for the 2008 budget, a small increase for an over 10-year span.
Michael James, chairman of the Tourism and Development Board for the State of Maryland and managing partner of the Carousel Hotel, provided statistics reflecting the impact of tourism on the local community. According to James, 16,500 jobs are directly employed in tourism and 56 percent of the total county employment is in tourism. James also pointed out that 20 percent of the advertising budget is dedicated to golf yet it only yields 2-3 percent of business in room revenue, suggesting that less money be dedicated to the golf industry.
James also showed that for Maryland in 2006, for every dollar spent on marketing, there was $34 generated in direct revenue, marking a $34 to $1 return on investment to Maryland’s economy. He noted that in Ocean City the number would be much higher.
Clarion owner Leonard Berger followed with further emphasis on the dire need for a larger advertising budget. He mentioned the competing vacation packages, such as the Caribbean and the Bahamas that “are expanding with seasons that are mirror images of ours.” Berger said their off-season occurs during our summer, which allows them to have decreased prices at Ocean City’s busy time of year. He said advertising would help to quell any distortion of facts that people hear about high prices in Ocean City.
George Hale Harrison, representing the Harrison Group, spoke strongly of the need for increased advertising, saying, “competing cities spend three to four times as much on advertising.”
Harrison presented a graph showing decreases in city revenue and occupancy room tax spent on tourism.
“There has been a dramatic drop off in the percentage of the general fund that goes to economic development and tourism spending,” he said, noting that it had fallen from about 9.5 percent to 7 percent.
Harrison added, “The room occupancy tax has increased dramatically,” noting that instead of having about 70 percent of the room occupancy tax spent on economic development and tourism, the local government has about 40 percent.
Harrison made an apt analogy, comparing the town to an engine and the spending of tourism to oil.
“If we continue to deprive the engine of oil, it’s going to break down,” Harrison said. “We just need to add more oil.”
Paul Wall, vice president of Phillips Restaurants, added, “tourism is going to die if we don’t give them a reason to come here. We need your help and we need it drastically.”
The overall theme of the presentation was resonated with these words, “do it now,” with everyone urging the council not to wait until next year.
Councilwoman Nancy Howard spoke in support of the association, saying, “I agree with you 100 percent,” pledging to work with the association to find a solution.