The first half of the 2015 summer is proving to be robust, with the Canadian exchange rate the only concern and possibly a game changer for some businesses. The Cape May County Department of Tourism has prepared their annual mid-summer tourism report and finding occupancy is up with record breaking holidays, strong weekends in June and July and for most businesses, mid-week is on par with last summer. Traffic counts on the Garden State Parkway into Cape May County are up on holiday weekends in the 5% range with increases in traffic on weekends and similar increase along the entire roadway. The Atlantic City Expressway is reporting an increase of 5% in traffic exiting at milepost 7S.
Cape May County had a record breaking year in 2014 with an increase in tourism expenditures of 5.2%; generating $5.79 Billion in revenue. Last year, all five sectors measured showed an increase in visitor spending according to the New Jersey Division of Travel and Tourism research, conducted by Tourism Economics. For the second consecutive year, Cape May County’s Lodging; Food and Beverage; Retail; and, Rental Income expenditures surpassed the $1 billion dollar level. Cape May County also took the lead in the State in generating revenue in both recreation spending at $668.6 million; and rental income at $1.9 Billion.
(2014 Cape May County Tourism Expenditures were $5.79 Billion – Breakdown by Sector: Lodging: $2.29 Billion; Food/Bev: $1.28 Billion; Retail: $1.15 Billion; Recreation: $668.6 Million; Transportation: $389.6 Million. Rental Income, not included in the sectors measured, was $1.94 Billion.)
Freeholder E. Marie Hayes, liaison to the Department of Tourism stated, “Cape May County Tourism expenditures have increased every year since 1994, we are seeing the first half of the 2015 season as a good year with increases in most sectors.” Hayes added, “It is hard to top 2014, but with a good June and July behind us, and a strong August and September predicted, we anticipate tourism growth in 2015 to continue on an upward track”.
The Canadian exchange rate is the lowest it has been since 2004. The dollar was trading at or near par for the past five years, making travel to the U.S. from Canada favorable and affordable. Currently, the loonie is at 76 cents against the U.S. dollar the lowest it has been since March 2009 when it closed at 76.85 cents. Last week the Bank of Canada reduced its interest rate which could increase the decline of the loonie to the 75 cent level of 2004.
As reported in May, by Diane Wieland, Director of the Department of Tourism, the exchange rate will impact visitors to Cape May County from Canada this summer. “For Canadians who spend a week or more vacationing in Cape May County, losing 25 cents on every dollar will force them to make adjustments in their vacation budget. For some it will be a shorter stay, resulting in smaller per person expenditures, for others it will be reduced spending on non-essential purchases and activities, or cutting their vacation to the United States entirely. While the cost of gas in the U.S is somewhat of a trade-off, it will not be enough to make a difference”, Wieland explained
Some motels and campground are reporting that June and early July saw a decrease in new Canadians business in the range of 15-25%. Loyal Canadian customers continue to plan vacations to the area, however, some are cutting their vacations short. Canadians tend to spend 7-10 in Cape May County. “With Canadians making up 11% of the summer visitor base, we watch the Canadian dollar and are aware of the impact the exchange rate makes on our tourism businesses”, Hayes explained.
“During the past few years when the exchange rate was at par, we saw an increase in Canadian visitors earlier in July and continuing through August. However, this year we didn’t see visitors from Canadian in the same numbers in the early summer. Over the past decade, travel patterns have changed and we are seeing the height of the season has shifted toward the last week in July and first three weeks in August. This trend applies to the U.S. and Canadian market. August is the month to watch”, Wieland added.
Reports from the lodging industry indicate that overall occupancy rates for June and July are good with a stronger trend toward long weekends over full week stays. Accommodation managers are reporting their loyal Canadian families have returned this summer, but saw a decline in new Canadian business. According to Freeholder Hayes, “Quebeckers continue to be the bulk of Cape May County’s Canadian customer base, with Ocean City reporting an uptick in vacationers from Ontario. Lodging, including campgrounds, are reporting a strong August and September based on reservations and verifies the shift in the high season in Cape May County.”
To date, Occupancy Tax collection is up over nine percent for the first half of 2015. July appears to show an increase in occupancy, however, those figures are not available. Most businesses are reporting an increase in revenue with recording breaking crowds for Memorial Day and July 4th weekends.
Ocean City is reporting an increase in expenditures with good reports from the restaurant sector. Reservations are strong for August and into September. Retail is holding at the same as 2014, which was a good year. Beach tags sales, parking meter and parking lot revenue is also showing an increase at the half way point of the summer.
Sea Isle City is reporting an increase in beach tags sales of over $30,000, compared to the same time last year. Restaurants are doing well and lodging is at the same as last year, which was a record year.
Contact: Diane Wieland, Director of Tourism and Public Information