Officials Hope To Reverse Tourism Marketing Trend

OCEAN CITY – With the opening of the Maryland General Assembly session next week, resort business leaders will once again press state officials to restore funding for tourism marketing, but with Maryland slashing department budgets, the money could be hard to come by.

Maryland has slashed its tourism marketing budget by over 50 percent in the last year as part of a larger effort to reduce spending, despite the well-documented return on the investment. On Wednesday, Ocean City Economic Development Committee (EDC) members vowed to make the trek to Annapolis next month to encourage state lawmakers to reconsider slashing the tourism marketing budget, but it appears the resort area might have to go it alone again in 2010.

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Last year, Ocean City increased its marketing budget while Maryland continued to make substantial cuts to its own tourism spending. On Feb. 5, a contingent of resort business leaders will make the trip to Annapolis for Tourism Day, during which they will implore state officials to reverse the trend.

“We need to show up in Annapolis on Feb. 5 to show legislators how important it is to continue to fund tourism marketing,” said Ocean City Hotel-Motel-Restaurant Association Director Susan Jones on Wednesday. “We need to send the message loud and clear that cutting tourism spending is not acceptable.”

While the state is dramatically cutting tourism spending, Ocean City has been able to increase its budget despite the economy. While the jury is still out on 2009, some indicators suggest the plan paid dividends last season when the numbers are compared to other tourist destinations in the region. Ocean City Tourism Director Deb Turk said this week the same could not be said for the state.

“We have a very robust marketing budget that now exceeds the state’s, which is pretty sad,” she said. “The state has cut its budget by 52 percent and they are cutting positions. There will literally be no marketing for tourism done by the state this year.”

Turk said state spending cuts are having a greater impact on other tourist destinations across Maryland, while Ocean City continues to thrive on its own.

“My colleagues around the state are reeling from this,” she said. “We’re in a little better position because of our own marketing budget, but state promotion is still very important to us.”

EDC President Michael James said resort officials should push more for grants for tourism rather than an increased state tourism spending plan, if only to control how the funds are spent.

“I would much rather push for the grant program,” he said. “The idea behind the grant program is to help those who help themselves. If we get grant money, we control how we spend it.”

Tourism spending was just one of the many topics discussed by the EDC on Wednesday. No less important is the perceived subtle turnaround in the real estate market in the resort area. Coastal Association of Realtors President Terry Daly told EDC members on Wednesday the market appears to be on the slow road to recovery.

Daly said the real estate inventory in the area was down in 2009 compared to 2008, which is a good sign, while the number of contracts went up about 30 percent and the number of settlements increased by about 21 percent.

“That’s all good news,” he said “Average sale prices were down slightly, but the number of sales continues to go up. Most of the sales we’re seeing now are in the $200,000 to $500,000 range.”

Daly said one area of concern in the local market continues to be the increased number of foreclosed properties, which he called shadow inventory.

“The impact of that is unknown,” he said. “They are being allowed to slowly trickle back into the market rather than flood in all at once.”

When questioned about the current credit crunch associated with the still struggling economy, Daly told EDC members the same standards for lenders are in place as they were before the credit crunch, but the reins have been tightened somewhat for potential buyers.

“Fannie Mae has always had guidelines and those haven’t changed,” he said. “What has changed is that the process has slowed down. They want to see the documentation rather than just letting the underwriters sign off on the loans.”

In other EDC news, Ocean City Economic Development Committee (OCDC) Director Glenn Irwin said the downtown historic walking tour has now been extended from 3rd Street to 15th Street. The previous tours ran only from the Inlet to 3rd Street.

“It’s been a huge success,” he said. “This has been a great way to highlight some of our historic buildings.”

Irwin also told EDC members the downtown façade program has also increased dramatically with about 75 properties now restored including 20 in the last year alone.

“That’s pretty remarkable,” he said. “When we started this, we were hoping to do about five or six a year.”