Being Realistic In
Gauging OC Tourism
Ocean City Chamber of Commerce President-Elect John Gehrig’s recent comments on measuring the health of the Ocean City tourism economy, as reported by The Dispatch (“Officials Realistic Despite May Crowd Record,” June 5), were right on target. It is truly encouraging to see a stakeholder of our town’s only industry speak so pointedly about the mistake of portraying population estimates as being viable indicators of economic health.
The Demoflush formula used by Ocean City measures wastewater output on weekends, when tourist influx is at its peak, in order to estimate the number of visitors to our town within a given period of time. This approach is certainly sufficient for estimating weekend population figures, as the correlation between gallons of wastewater output and the number of people in town is undoubtedly high. However, its predictive power regarding the number of visitors during non-weekend periods is clearly lacking, due to the formula’s inability to control for the “length of stay” variable: we simply have no way of knowing how long the folks who contribute to wastewater production on weekends have been in town. So if one were to use such weekend estimates to make generalizations about the success of the tourism economy during a given period, it must be done under the assumption that the disparity between weekday and weekend crowds is not significant. But this is not an assumption that can easily be made.
Case in point: during the peak season of 2008, many local businesspeople offered the qualitative assessment that visitors were tending to stay in Ocean City for shorter periods. Such a trend becomes troubling because aside from the obvious decrease in room tax revenue collected from such tourists, short-stay visitors simply do not match the overall economic impact of those who stay longer. Furthermore, the obvious disparity between the numbers of people visiting Ocean City on the weekends over the past two months versus the numbers of people here on the weekdays suggests that it would be fundamentally and statistically inaccurate to project weekend population estimates as being representative of what economic conditions are like on weekdays. As a friend and fellow worker in our tourism economy recently suggested to me, we simply don’t have enough weekends left to make up for the sort of weekdays that we are currently suffering through.
But where population estimates really fail as barometers of economic health lies in their inherent potential to lure people into formulating inaccurate conclusions. The achievement of high population figures is indeed a prerequisite for strong economic performance in a tourism economy, but it does not in itself guarantee success across the board. Just because vast numbers of people are visiting our town does not necessarily mean that they are eating in our restaurants, shopping at our stores, and enjoying our amusement and entertainment venues. Significant returns on our marketing investments will only be realized when all sectors of our tourism economy are performing well. As we monitor the health of our tourism economy, counting the number of “heads in beds” is no more important than paying attention to the numbers of shopping bags in hands, kids on carousels, and pizza slices in stomachs.
Mr. Gehrig endorses examining the nuts and bolts of our tourism economy, so let’s take a look at the figures for room tax revenue, which historically has represented roughly 20 to 25 percent of the town’s total tax revenue. In FY2008, room tax revenue increased over the previous year by roughly 3.6% (from $10,345,545 to $10,719,678), which at surface level appears to be good news. However, this increase can be entirely attributed to the one half percentage point increase in the room tax that was implemented on Jan. 1, 2008, thereby affecting the second half of FY2008. A closer examination of the monthly room tax data reveals that had the room tax rate increase not been enacted, room tax revenue would have actually declined, with an approximate yield of $10,273,170. Hence, the strategy proposed by HMRA in 2007 and endorsed by City Council to request that Worcester County increase the room tax has proved to be prescient: what would otherwise have amounted to a decrease in room tax revenue of approximately $72,000 became instead an increase of roughly $375,000, a swing of nearly $450,000. The rate increase sidestepped what otherwise would have amounted to the first ever sizeable year-to-year drop in collected room tax revenue.
There is simply no place any longer for the sort of “eternal optimism” approach that only serves to obfuscate underlying economic malaise, and relying on weekend population estimates as a bellwether for economic health certainly will not suffice. We need to be able to take a long, hard look at what is really going on within the undercurrents of our tourism economy, for effectively managing this economy requires us to have the courage to admit when conditions are not altogether well so that we can promptly formulate a strategy for response and reaction. Such a candid approach is owed to each and every one of the individuals — at every level — whose personal welfares and those of their families are dependent upon the health of the Ocean City tourism economy. For at the end of the day, it is indeed our collective economic livelihood that matters most.
Joseph L. Kroart III
(The writer is the vice president of Ocean Gallery Fine Art Centers, Inc.)
Bridge Concerns Aired
(The following was addressed to State Highway Administration Administrator Neil J. Pedersen.)
I am a resident of Ocean City and I have some concerns and questions regarding the Route 50 bridge, also known as the Harry W. Kelley Memorial Bridge.
As recently as this year, the SHA ahs done some repair work on the Route 50 bridge, and at present they are putting the finishing touches on this project by way of repairing the north sidewalk, which brings me to my issue(s).
Is there any way to make the bridge more user friendly for walkers and bicycle riders? I wonder if one side of the bridge could be used by the fishing enthusiasts, leaving the opposite side free for walkers and bicyclists. Currently, walkers, bicyclists and the fishing public must share a very narrow walkway, simultaneously in both directions, which makes for dangerous conditions.
Mine you I do not begrudge the fishing folks, it’s just that they erect chairs, coolers, multiple fishing lines and poles and they are less than eager to move aside to let others pass. It’s all just too much. I am a regular bicyclist, having logged over 8,000 miles on my bike in eight years. I enjoy riding my bike and also find it a necessary means of commuting, especially in the summer when traffic swells.
I would appreciate any thoughts you might lend on the matter and look forward to working with the SHA to find a solution that can work for everyone. Thank you for your assistance.
Government Priorities Off
Now let me help you get this straight. The U.S. government has bailed out General Motors to the tune of more than $50 billion in order to stave off bankruptcy, yet G.M. has filed for bankruptcy protection this week. The Speaker of the House has use of any of three different large jets that were paid for by the U.S. taxpayers. She gets to take one back and forth to California whenever she wants.
According to Snopes, the cost to fly the largest one available to her has been estimated to cost on average more than $120,000 per trip but in order to save money in this time of terrible economic recession and outrageous energy costs the U.S. government is canceling the COLAs (cost of living raises) for the approximately 40 million Social Security pensioners.
Gee, that doesn’t make any sense to me. What do you think about it? Have you shared your view with your elected representatives in Washington?
Paul F. Phillips
On this historical day that commemorates the Invasion of Omaha Beach in Normandy, my yard was invaded by vandals late at night on June 5 and discovered early Saturday morning, as I put my flag out as usual and picked up the morning newspapers on the sidewalk. I found that my cement Jockey with a lighted lamp had been uprooted and laying on the ground. Not too far away was a large planter encircled by stones was dumped over, plants and all.
I immediately reported the incident to the Berlin Police Department, which took the information and would pass it on to the oncoming shift. Afterwards I took some pictures and decided to just let the strewn items lay there for all passersby to take notice of the vandalism to my front yard which everyone knows how hard I work to make it a pleasant sight for the many resident walkers and strolling tourists through our beautiful town’s historical district.
This is not the first incident of this kind and it appears to have been done by the same person or persons on several other occasions in the past year or so. Three years ago, I had an expensive Santa sleigh stolen, lights and all, which your paper may remember and appeared in The Dispatch.
An entry of mischievous deeds in your popular weekly paper may spark some leads concerning vandals that strike in the darkness of night. Could be that they are future Congressional nominees?