TRENTON – Visit New Jersey, the state’s official tourism website, issued its report on the economic impact of tourism in 2021. The key theme of the report was recovery.
From a dismal 2020, state tourism in 2021 recovered almost all the ground it lost to the pandemic. The report’s projections for 2022 are for a record year for visitations and spending.
Within days of the issuance of the state report, Stockton University’s Lloyd D. Levenson’s Institute of Gaming, Hospitality, and Tourism held its 14th annual spring tourism panel discussion, which also predicted a robust summer 2022, but also pointed to wildcards that could impact results.
Cape May County in 2021
The numbers for Cape May County were among the most impressive in the tourism report, with visitors in 2021 equal to the pre-pandemic record year of 2019. Total visitor spending also roared back, coming in at less than one-half of a percentage point below 2019.
Visitors to the county totaled 10.3 million, as compared to 10.2 million in 2019. Visitor spending was $6.6 billion last year, just a hair under the $6.9 billion total in 2019.
The southernmost county in the state, with only 250 square miles of land area, absorbed 11% of all visitors to the state and accounted for $1.7 million a day in state and local taxes in 2021. The county, in 2021, collected 13.5% of the total state tax revenue generated by the tourism sector.
The categories of visitor spending were led by lodging at $2.75 billion, food and beverages at $1.5 billion, retail at $1.3 billion, and recreation and transport at a combined $1.1 billion.
In the Stockton panel discussion, Cape May County Tourism Director Diane Wieland said the county recovered 96% of its 2019 pre-pandemic levels in visitations and spending.
Employment
The report made clear the extent to which the county’s economy is tied to tourism. Total employment in Cape May County linked directly and indirectly to tourism represented a 63% share of all county employment. That statistic dwarfed the employment impact of tourism in all of the state’s other 20 counties. The next highest was Atlantic County, at 41%, followed in third place by Ocean County at 13%.
While tourism is a year-round phenomenon, the major portion of visits and spending in the county comes between June and the end of September. That pattern of visitation combined with the fact that 63% of total employment and 49% of direct employment are tied to the tourism sector, defines the character of the county economy.
The county expands to accommodate 10 million-plus visitors, absorbs over $600 million in direct visitor spending, and grows its employment opportunities appreciably for less than six months of the year, ebbing to a much smaller version of itself, as it waits for the next summer onslaught.
The Visitor
Travel Intelligence produced its own report on the fourth quarter of 2020 through the third quarter of 2021. That report described the average New Jersey visitor as mature, with a mean age of 55 and relatively financially secure with an average household income of $112,000.
Almost 90% of the visitors come from the mid-Atlantic area. The vast majority of the visitors, 96%, arrive by automobile and over 80% of those have a drive of 100 miles or less.
As part of the Stockton panel, Wieland said the county was “dusting off” its 2009 ad campaign, which highlighted the shore as “only a tank of gas away” in order to encourage people to consider the shore as fuel prices make longer trips less desirable. This campaign relies on the fact that most of the county’s visitors come from the mid-Atlantic region.
The Forecast
The state report on 2021 contains a forecast for 2022 that sees a banner year for state tourism, with a total of 108 million visitations to the Garden State. If the percentage of those visitors coming to Cape May County holds at historic levels, the county could be looking at 11.5 million visitors, a new high for county tourism.
In the Stockton panel discussion, Associate Professor of Economics Oliver Cooke predicted that 2022 would be a “very robust, very strong summer shore season.” Cooke and other members of the panel pointed to three concerns that could have variable impacts on the summer season.
The first of those was inflation, which the panel largely felt could have a beneficial impact on shore visitations if, as in the past, inflation discourages travel by air. Wieland cautioned that even if visitors choose the shore as a destination, inflation may impact discretionary spending and alter patterns of spending.
The U.S. Bureau of Labor Statistics reported an inflation rate of 8.3% from April 2021 to April 2022 is the highest in 40 years and panel members noted the impact of rising prices on shore businesses, which may need to, in turn, charge more for goods and services.
The second wildcard identified by the Stockton panel was the tight labor market. Continued increases in visitation to the shore place added pressure on businesses to find and retain seasonal help.
Sharon Franz, sales and marketing director for Steel Pier in Atlantic City, could easily have been speaking for Cape May County amusement parks when she described the difficulties in hiring sufficient staff to handle both service and safety concerns associated with rising numbers of summer visitors.
Across all businesses, the problem of staff is expected to, again, be a major hurdle, with many hoping that the recovery of the J-1 visa program will provide a lift in terms of employment applications. Staffing concerns in 2021 extended to county municipalities, as well as private businesses, and impacted the delivery of municipal services.
The final cloud on the horizon for summer 2022 is Covid. With medical experts saying there could be a resurgence of the virus later in the year, perhaps even in early fall, a surge in cases would be another wildcard in the economic forecast. The panel members said they were confident that the shore communities could withstand another Covid scare.
In the end, the projections from the Stockton panel and the state economic impact report are bullish for 2022.
To contact Vince Conti, email vconti@cmcherald.com.
