Winterfest Price Hike Looks Doomed

OCEAN CITY — The Recreation and Parks Committee appears to be okay with the red ink associated with the Winterfest of Lights and will remove its recommendation to raise the fee to $5.

Despite the fact that Winterfest of Lights has taken an overall loss for each of the last three years, Recreation and Parks Director Tom Shuster said will recant his prior recommendation to raise the price of admission to the annual Christmas light extravaganza from $4 to $5, while raising the age of free admission from 9-and-under to 12-and-under, due to lack of support at the committee level.

Councilman Jim Hall, who also serves as committee chair, said the council will ohave the final say if that cost stays static or increases by a dollar for next year.

“For now, that is what is being recommended at this level, but the entire council may have different feelings based on this report,” said Hall. "They need to determine whether or not they are okay with the red ink."

The report that Hall referred to was a three-year comparison of costs, revenues and economic impact presented by Shuster at Tuesday’s monthly meeting and showed not only how much it costs the town to hold the festival of lights in each of the last three years, but also showed how much money has been brought in and showed a telling trend of the money associated with Winterfest.

“The most telling total on this list is the total operational and labor costs at Northside Park associated with putting on the event,” said Shuster. “In 2009, it was $491,000 but this past year, we reduced it down to a little more than $445,000.”

Though Winterfest’s revenue dropped approximately $9,000 last year, based mostly on a December snowstorm that forced the festival to shut down on a Saturday night, and the fact that the town reported a net loss of almost $115,000, Shuster felt it would be better to continue to monitor the costs and revenues for at least one more year before opting for a price increase.

“The town sees Winterfest as an important tourism attraction and an economic impact to the business community,” said Shuster. “It makes sense from an economic standpoint for the town to support it. However, the town is willing to take some sort of a ‘loss’ on the event in exchange for the amount of economic impact in the community. Internally though, we are trying to mitigate or reduce the amount of subsidy.”

Shuster’s report says that the projected economic impact on the local economy during Winterfest was more than $2.3 million in the last three years ($740,120 this year), so the town’s incremental losses when put up against that impact seems to be worth the loss at least currently.

In 2008, the town reported a loss of $89,460 for Winterfest, $152,037 in 2009 and $114,981 this past year. City Manager Dennis Dare sat quietly during most of the conversation, but did note that although he was fine with the recommendation, he sees the Winterfest of Lights as a bargain.

“I think it’s undervalued,” said Dare. “I think that it is worth far more than what we charge.”

Special Events Director John Sullivan said approximately 55,000 people went through Winterfest last year, and if the price of admission were to be increased by $1, the town would in fact be able to cut its losses almost in half.

“So, if we get that extra dollar, we would essentially be giving ourselves another $55,000 and cutting our loss by almost 50 percent?,” queried Hall.

Shuster said that hypothetically speaking, Hall’s query could be accurate, but noted that revenue for Winterfest is “much more volatile than the costs” due to the non-controllable factors of weather.

“The Saturday that we lost in December usually accounts for about $20,000 worth of revenue,” said Shuster.

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