OCEAN CITY – As the sting from the ongoing economic crisis starts to hit locally, some Ocean City area businesses are forging ahead, while others are merely holding on.
From real estate to the retail industries, many local businesses are preparing for what one proprietor called a “guesstimated 12-24-month downward spiral”, and it seems they are just as concerned with the rough economic times ahead as consumers.
The retail sector appears especially hard-hit so far locally, as some of the big names, like K-Coast Surf Shop, are already reporting concerns. According to owner Mark Pugh, the sudden drop off is sounding some alarms.
“We had a very strong summer, and equally strong September,” said Pugh, “but in the last two weeks, things have just dropped off, even on the weekends, which worries me a great deal.”
Everywhere you look around town, retailers appear to be combating the troubling news concerning the economy with discounts and sales for their customers to encourage them to continue shopping.
Making customers feel as if they are getting more for their buck is “crucial”, according to many area retailers, including Pugh, who said that merchants are going to have to look at lowering their product prices to survive in the months ahead.
“People have less, so you certainly can’t price yourself out of the equation right now. No one is going to go out and buy a $60 pair of boardshorts, when they can get another pair for $20,” Pugh said. “Most people are going to be buying and selling more Chevy’s than Cadillacs if you know what I mean.”
Another small business owner in the area, Darin Engh, of Beach Music has already felt the sting of what’s happening nationally
“I’m in a holding pattern as a business right now as far as growth goes. Right now, I’m just trying to hunker down and ride this thing out,” said Engh.
With the Christmas season upcoming, many retailers are walking a fine line between spending on inventory and then potentially being left with a lot of overhead that may or may not sell.
“You don’t want to overplay it, because you really can’t afford to at this point,” said Engh. “Nobody wants to be doom and gloom at this point, but we don’t really know what’s going to happen.”
The hotel and motel industry is seemingly strategizing to continue to draw visitors to the area, and the rational way to do that seems to be in bargains and discounts. Park Place Hotel in downtown Ocean City just added three discount packages this week including a two-night stay for two adults for $195 based on what’s happening on the economic front. Yet, Park Place Hotel Operations Director Caryl Cardenas hasn’t seen a “drastic drop” in business thus far, although she did note that the hotel was down 3 percent as a whole.
“It’s hard to say if the drop-off in business is linked to the economy and current events, or if it is simply because it’s the end of the season here,” she said.
On the other hand, the real estate industry, which is seemingly always under public scrutiny, seems to be mixed in its strategies for dealing with what could be ahead for this area’s economy. Some real estate companies are making drastic cuts and changes in staff and policies, while others like Prudential Carruthers continue to be optimistic and “keep moving forward.”
“We just want to keep all of our agents motivated and get through what may be ahead,” Ocean Pines office branch sales manager Claire McLaughlin said. “I’ve been through slow markets and trends in the past, and you can’t look at the glass as half empty. The market is always going to fluctuate up and down.”
McLaughlin mentioned this time of year is always slow for real estate, and as a whole this area hasn’t felt the “huge impacts that other markets have”.
Though no one is sure how bad things are going to get, most people tend to be preaching the conservative approach to their money and their lifestyle for the near future.
Jim Prete, a Realtor at Prudential Carruthers is enjoying his best year, but is going to be “protecting his nest egg for a little while” after seeing a drastic drop off in business in the last two weeks.
“The phone calls just stopped coming and people are postponing their trips to come down here to look at property, but honestly, I think this stagnant market will result in a healthy cleansing of the local real estate industry and in the end make people better business people as you have to literally watch every dollar,” he said. “On the upside, interest raters are good and prices continue to come down for buyers.”
Some local restaurants are also enjoying record years but are preparing for the worst.
The Bull on the Beach on 94th Street recorded its best summer ever, according to kitchen manager Matt Saloney, and though it has not seen a change in numbers either way in the recent weeks, Saloney said management is prepared for the pinch.
“Everyone is concerned and we are going to roll with the punches. You can still get a meal here for under $10 so I think that definitely helps our bottom line and the customers that come here,” Saloney said. “We remain on pace from last year, but we may have to reevaluate in the next few months.”
The overwhelming cry from the local businesses seems to be that times are going to get tough, and they need to reward their customers for their continued business as most owners realize that consumers are going to be holding on to their bucks a little tighter. Said Travis Wright, owner of the Shark Restaurant in West Ocean City, “you really have to over-deliver to what the customer feels that they are getting for their money, and you have to really have forward thinking as far as marketing yourself so you are on the top of everyone’s mind when they do get out of the house to spend some money.
In the months ahead, retailers like Mark Pugh at K-Coast encourage local businesses to look at the Christmas shopping season for a quick glimpse into how next summer may be.
“The Christmas season is like a crystal ball for this area, especially retail, as Ocean City just had our Christmas season with the summer,” said Pugh. “If the rest of the country has a strong Christmas shopping season, we can probably remain equally optimistic for next summer.”