Ocean City taking steps to combat high gas prices, slumping economy

Daily Record, The (Baltimore), May 23, 2008 by Liz Farmer

Even with a slumping economy and gas prices expected to crest $4 a gallon this summer, Ocean City officials and businesses say they expect the drive-to tourism town -- which drew more than 4 million people last summer -- to fare well.

But they are not just crossing their fingers and hoping for the best. To combat the predicted shorter stays and lower spending, they are offering more incentives this year.

"Ocean City is not like going to a resort where you're stuck with one price choice and then there are hidden costs," said Donna Abbott, the city's public relations director. "Here, the beach is always free ... and we have such a wide range of establishments and new promotional offers that any family -- no matter their budget -- can find some way to enjoy their time on the beach."

Business owners aren't sitting back and waiting for the beach

season rush -- they are taking a more proactive role with marketing strategies like e-mail blasts, adjusting vacation packages and offering more restaurant coupons and even gas vouchers.

At the Tidelands Caribbean Hotel on the boardwalk, Manager Michael Dean said he has cut back on the minimum number of nights required for a room from three or four in years past to two this summer.

He added that the hotel's spring revenue was down 5 percent to 6 percent from a year before, but that the cooler weather had also been a factor and he was hoping to make up the difference this summer.

"But the gas price is definitely scarier [than the weather] because it's more fixed," Dean said. "If people have [room] reservations, they'll still come in the rain."

Many hotels in the area are getting more aggressive with their marketing, said Comfort Inn manager Darin Wooten. So far, he said, his results have been positive -- in the seven-day period after the last e-mail promotion was sent, reservations went up 40 percent compared to the prior week, he said.

"If a guest last year had $600 and this year he has $400, that's one less night, one less T-shirt, one less dinner out," Wooten said. "So this year we're doing more than we've ever had to before to get people to come out here and stay just as long."

That includes a gas voucher that varies from $25 to $75 depending on the length of stay and participation in Ocean City's new "1-Week Wonder" program. Developed by the Hotel-Motel-Restaurant Association (HMRA) and the Ocean City Chamber of Commerce, the travel promotion includes lower weekly rates at 19 hotels and between $100 and $175 in "fun bucks," which can be redeemed at about 50 participating attractions, gas stations, restaurants and shops.

"We're trying to create things that give people more bang for their buck," said Susan Jones, executive director of HMRA, who added that Ocean City also has free, family-oriented events like movie nights and concerts six nights a week during the summer.

"We're not worried about them not coming at all, but we do think they'll be more budget conscious once they're here," she said.

But even managers at the higher-end properties, like the Clarion Hotel, which charges between $209 and $399 a night for a room at full cost, don't think they'll feel much of an effect from this summer's higher gas prices. The Clarion is also a 1-Week Wonder participant.

Renee M. Seiden, director of sales and marketing, predicted that the Clarion this year would absorb the customers who had foregone the plane trip to Florida for a summer vacation and opted instead for a cheaper drive to the beach.

"Yes, I think the economy's going to affect people, but I think everyone's going to move down a notch," she said. "I think the guy that's really going to feel the squeeze is the one who was staying [on the] bayside for a weekend vacation. That money's going into his tank of gas and groceries."

Seiden did note that the Marigot Beach Condominium Suites, a property owned by the Clarion's owner, shortened its rental period to three or four nights for one- and two-bedroom rentals in response to the market. The three-bedroom rentals, which presumably have their costs shared by more people, are still selling well, Seiden said.

Linthicum resident Bill Atkinson, 45, said he has "no hesitation at all" about driving out to his family condo in Ocean City every weekend even with the higher cost of gas.

"I figure even if I didn't have a place down here I'd do it -- you can save so much money by not eating at the restaurants every night, and even the price for gas is [about 15 cents per gallon] cheaper down here," Atkinson said.

The restaurant association's Jones said there was a concern from some restaurants that numbers would be down this year, but hoped that the 1-Week Wonder vouchers would help mitigate that effect.

"People can save money by shopping around for the best deal and still have money left over for some of the nicer things," she said. "You can get your full vacation experience here and still be on a budget."

Some hotels have reported a lower reservation rate this year than the last, but say other factors, like the weather and last-minute bookings via the Internet, could be contributing causes along with the cost of gas. They say without the early reservations, it is more difficult to predict how the summer season will go.