Staying Above Water

Tough Economy Hits Ocean City Tourism Industry, Prompting Discounts, Lower Rates To Lure Vacationers

April 21, 2009|By Scott Calvert | Scott Calvert,

OCEAN CITY - For the first time in its 50-year history, the Castle in the Sand Hotel in Ocean City is rolling back its rates. This summer, rooms will cost the same as in 2006, saving guests about $20 a night.

"We just recognize that it's a tough time for everybody," general manager Carol Dickel said in an interview at the hotel with its trademark crenelated tower.

Dickel says she has never been more "apprehensive" in her 14 years on the staff. Bookings for the summer have been decent but are softer than last year, and 2008 was hardly a banner season for the hotel - or for the town's vital hospitality sector.

As Ocean City readies for its first summer since the deepening of the 17-month-old recession, value seems as elemental as the sand and salt water. Merchants hope to lure tourists with bargains, knowing that the economy has darkened since beach blankets last got a good shake.

Next month, the town will launch a $3 million ad campaign in which "Rodney the Lifeguard" rescues people from the stress of daily life and pulls them to the safety of the beach - a beach that officials note is free and hosts a free bonfire, movie, concert or other event nearly every night of the week.

To make getaways more affordable, some hotels plan to piggyback on the ad campaign by offering lower "Rodney rates."

On the one hand, tourism officials say, Ocean City should benefit from its proximity to Baltimore, Washington and Philadelphia by reeling in visitors who in better times might fly to Disney World or head to North Carolina. Lower gas prices should provide a boost.

On the other hand, they acknowledge that job woes and stretched credit might deter some families. "People we might have had in years past might not come at all because they simply can't take a vacation," said Melanie Pursel, executive director of the Ocean City Chamber of Commerce.

"I'm sure we will be impacted. But we can also be a day trip, or maybe just one night," she said. "We try to remind people that no matter how difficult times get, you need to take time away."

T-shirt seller David Lougasi is worried enough that he ordered half the stock he usually buys for his Boardwalk shop, Cool Topics. He also opened a few weeks before the normal Easter debut.

With an annual rent of $80,000 for his 800 square feet, he needs to move a bevy of T-shirts, jewelry and hookahs. Summer sales represent 95 percent of his shop's haul.

His son, Nick, who manages the shop, said he is "very nervous" about this summer. "You can tell people don't have money; they come in and just look," he said glumly, sitting on the Boardwalk on a recent afternoon.

Because he suspects fewer people will be able to enjoy a whole week at the beach, the younger Lougasi foresees grim weekday sales.

Hooded sweat shirts that normally sell for $15 have been discounted to $5. Even so, he said, "everyone is trying to save to make the car payment or pay the mortgage."

Add it all up and some observers predict a so-so summer. "I don't expect the season to be a bust, but I don't expect it to be a boom, either: They're going to attract the value-conscious individuals within driving distance," said Memo Diriker, executive director of the Business, Economic and Community Outreach Network at Salisbury University.

"The silver lining in all of this is Ocean City has become much more pro-active in its marketing than it used to be historically," Diriker added. Gone is the complacent attitude of "We're here, you come."

Ocean City lives and dies by its summer crowds. On average, 4 million of its 8 million yearly visitors come between Memorial Day and Labor Day. Last year's tally fell short, causing some anxiety, said Donna Abbott, Ocean City's public relations director.

Yet she thinks the combination of location, free events and deals will make 2009 a "very good summer," assuming the weather cooperates.

"We feel we offer enough choice that people should be able to have somewhat of a vacation if they can't have a full vacation," she said. "They can at least partake of some family time in Ocean City, and it won't break the budget."

Bill Gibbs, who owns the 37-room Breakers Hotel and eight condominium units, said bookings for each are up despite the economy. He also owns five Dough Roller restaurants and has just reopened the location that burned down in March 2008 at the southern tip of the Boardwalk. Fire insurance covered only half the $2 million construction cost. But Gibbs was so determined to rebuild that, when no bank lent him the $1 million he needed, he turned to friends.

His recipe - "reasonably priced good food served quickly" - is faring well in the downturn, he said. He's also keeping prices flat, even though some Dough Roller competitors are going further.

For example, the Embers restaurant has lowered the price of its seafood buffet to $19.99, a level last seen in the 1990s.

Meanwhile, at the Castle in the Sand Hotel, would-be guests are invoking the recession with a plea that Dickel said goes like this: "In these economic times, can't you give me a better deal?"

Her reply: "We already have - we've rolled our rates back."

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