06/27/2007

Is ‘condo-mania’ threatening OC businesses?
By Bob Lassahn

At the most recent Worcester County Commissioners meeting, squeezed between the relatively routine matters before the panel was an interesting tidbit presented by representatives of the Ocean City (OC) Hotel-Motel-Restaurant Association (HMRA). HMRA Executive Director Susan Jones introduced a series of heavy hitters from familiar OC hotels and eateries such as Greg Shockley (Shenanigan's), Jon Trelmellen (Princess Royale/Princess Bayside), Susan Cropper (Empress Motel), Michael James (Carousel) and Dr. Leonard Berger (Clarion) to deliver a "State of the Industry" report as other HMRA members filled several rows of seats.

The information set forth during the presentation painted a picture of where our local jewel by the ocean stands with regard to attracting tourists, the lifeblood of Worcester County economics. They were there to convince the commissioners that the advertising dollars allocated to attracting visitors to the county are woefully short of where they should currently be and that other areas competing for OC tourists are spending three to four times the local budget of approximately $1.7 million.

With regard to visitors annually coming to OC the HRMA cites a figure of eight million, a number which, according to them, has remained relatively constant for the last decade. They also cite changes in visitor trends that have impacted the bottom line for OC hotels in particular.

They note the "season" attracting these eight million visitors has spread from what was once about 12 weeks between Memorial Day and Labor Day into the "shoulder seasons" and beyond. Many visitors have discovered that the weather and the ocean water can be just as attractive outside these once hard and fast points of demarcation and the room rates often tend to be a bit lower to boot. The HMRA credits OC with providing events such as Springfest and Sunfest to extend the season, but they also point out that off-season rates tend to be less lucrative and in some cases can actually result in losses.

The presenters repeatedly referenced diminishing earnings while increased costs, not the least being their tax assessments, were eroding their bottom line. To the credit of HRMA the session did not simply evolve into an open hand for more county dollars, but a request to work together with the commissioners in developing a plan to address the shortfalls they perceive.

What really grabbed attention was a dissertation on how the condo craze in OC is impacting the bottom line for businesses. Many of the visitors who came to OC for a vacation decided it was such a great place they should own a piece of it. When they bought their condo they were not only lost to the hospitality industry as a customer, but worse still, since many of them rent their condos when they are not using them, they became competition.

Even before I moved to the area and was simply one of the tourists I was somewhat appalled at the rate of "condo-mania" going on in OC. Far too many of the things that have made this resort attractive to families (including mine) are falling to the wrecking ball as land owners and developers rush to cash in. I am sure it is more appealing and lucrative to build the condo, collect the money and move on then to stick around and run a business on a daily basis, but does that condo sale contribute significantly to the continued well being of the local economy?

While it is recognized that every condo unit sold in OC represents tax dollars in the town's coffers, it appears there is a diminishing return if too much of the resort's limited real estate winds up converted to the purpose. The beautiful beaches of OC will always remain the biggest tourist draw, but the need remains for restaurants providing everything from basic burgers to upscale dining, places to enjoy an adult beverage, recreational attractions such as miniature golf, arcades and amusement parks and of course shops that provide an eclectic array of goods. After a day at the beach and perhaps a bit too much sun the visitor would expect such diversions close at hand. Some of the ambiance that has served as a draw for OC tourists is disappearing.

It might be perceived as a bit radical to suggest that during deliberations in search of a solution for the OC hospitality industry the thought of limiting the number of condo units might enter the equation. Almost certainly someone is cringing that I even stoop to mention the possibility, but if condos are not the solution, why build more?

And while in the problem solving mode perhaps some attention should be focused on a helping hand for the dedicated business entrepreneur who opens the doors of an establishment each day, provides continuing employment opportunities and contributes in an ongoing manner to the county's prosperity. Government can be extremely innovative in restricting, prohibiting and taxing, why not redirect some of that talent into developing incentives for people to remain in business?