OCEAN CITY – Resort business leaders this week expressed a cautious outlook for a tough road ahead despite what has been, by most accounts, a strong early season, warning the true measure of success for the summer could be found in economic indicators such as the room tax and food and beverage taxes.
According to the town’s demoflush numbers, Ocean City had three straight record weekends in May, culminating with an estimated 270,000 people in the resort on Memorial Day weekend, the highest total in 16 years. The Ocean City Department of Tourism announced Tuesday that a total of 986,818 weekend tourists visited the resort town during May, marking the most successful month of May since the town began tracking tourism population estimates.
While the demoflush numbers, which estimate the number of people in town using an equation based on water and wastewater usage, are reason for optimism, the jury is still out on whether they are a true barometer of the underlying economic conditions in Ocean City heading into the heart of the summer season.
During their bi-monthly meeting on Wednesday, Ocean City Economic Development Committee (EDC) members covered a wide variety of topics related to the overall economic health of the resort business community. Naturally, the discussion kept coming back to the strong spring numbers and the potential for a good summer season despite the economy.
Ocean City Assistant Tourism Director Debbie Travers said based on the demoflush numbers, and perhaps more importantly personal observation and discussions with business owners, the spring weekends were strong and could provide a springboard for an equally strong summer season.
“May was outstanding based on the demoflush numbers,” she said. “Now we realize the demoflush numbers aren’t the end all, beat all in determining our successes, but absent another system, it’s what we have to go on.”
However, D3 Corp President and Ocean City Chamber of Commerce President-Elect John Gehrig cautioned a look at the real nuts and bolts numbers for the spring should temper the outlook for the rest of the summer season. Gehrig pointed out room tax collected in the resort was down 16 percent during the first quarter of 2009, which could paint a more accurate picture of where visitors are staying and how long they are staying.
“There are warning signs out there if you take a close look at the inside numbers from a beat on the pavement perspective,” he said. “The three-night minimum is gone, room tax numbers for the first quarter of 2009 are down compared to last year, which wasn’t a very good year, and the average length of stay is down to around 2.7 nights. We need to get that back up to three or four nights.”
Gehrig said he did not intend to rain on anyone’s parade by pointing out the slightly more daunting figures, but warned avoiding them could lead to a false optimism about the season.
“I haven’t spoken to anyone who has said May was gangbusters despite what the demoflush numbers show,” he said. “We need to create value and get them to come, then we need to get them to stay here longer when they do come and spend more while they’re here.”
Councilwoman Mary Knight agreed the town needed to track important figures like room tax and food and beverage tax more closely, if only to gage how best to market the resort.
“The demoflush numbers did show the best increase in 10 years, but we need to take a closer look at what’s really going on,” she said. “We need to put in a request to the county to see what the room tax really is. We need to look at what’s happening and adjust and adapt our marketing plan accordingly.”
New EDC President Michael James, the chief operating officer for the Carousel, agreed the spring was strong, but cautioned a few good weekends in May could be erased in a hurry if the summer doesn’t follow suit.
“We can’t have a bad June or July,” he said. “We can have a great April or May, but it doesn’t mean anything if we have a bad July or August.”
Meanwhile, Delegate James Mathias did his best Knute Rockne impression in an effort to rally resort business leaders as they prepare for the summer season.
“I challenge you, just like I did for years as mayor at this time of year, to go out and get the job done, whatever it takes,” he said. “We’re in the locker room right now and are getting ready to head out for the Super Bowl. This is our time.”
Mathias said the EDC was founded as a means for the town’s business leaders to speak out in a unified voice and encouraged the current crop to follow that early mission statement.
“When this committee started, it was under then-Governor Schaeffer and we were wrestling with beach replenishment,” he said. “Schaeffer told us to step up to the plate and do for ourselves and not to wait for the state.”
James took the opportunity to remind Mathias, a former opponent in the 2006 House of Delegates District 38B race, the state actually lowered its tourism marketing budget this year after reaching a high of $7 million two years ago.
“We want more,” he said. “The tourism budget for the state needs to be improved. It was $7 million in 2007 and dropped to $6 million this year when it probably needs to be more like $10 million to $12 million.”