CAPE MAY COURT HOUSE, NJ --COVID-19 took its toll on Cape May County tourism as predicted, with the July numbers bringing the calculated tourism losses to 42%. The numbers are based on Occupancy Tax revenue including the latest report by the New Jersey Treasury through July 2020. Occupancy Tax represents 5% of the room rate and is levied on the lodging industry and includes hotels, motels, and Bed and Breakfast. Rentals and Campsites are excluded from charging Occupancy Tax.
July’s numbers came in at $2.6 million collected, which marked a $1.6 million increase in the collection fees over June and more than the total collected from January through June. This significantly bridged the gap in the year-to-date total losses from 60% to 42%. While this number is under the July 2019 collection rate by $760,849, Cape May County fared well statewide due to the high demand in beach and outdoor activities.
The Occupancy Tax data is used as a benchmark to measure overnight stays and reflects visitor spending across all industry sectors. According to the Cape May County Department of Tourism survey data, the average overnight visitor spends $374 per person, per day. The increase and/or decrease in Occupancy Tax similarly impacts Food and Beverage, Retail, Recreation, and Transportation. The NJ Treasury report provides hard numbers and gives us a monthly picture of the health of the overall industry. The July tax revenue more than doubled the collection rate in June and served to close the gap from a 60% loss during the first half of 2020, to a 42% year-to-date loss in July. Full capacity at hotels, motels, and Bed & Breakfast Inns was allowed in the last week of June.
"The COVID-19 shutdown came at a critical time for our tourism industry. After coming off a record 2019, with direct tourism spending at $6.9 billion and indications that the County was well on its way to another record year, the bottom fell out and there was nothing we could do but assist small businesses in applying for State and Federal loans and programs. The tourism industry was showing a substantial increase in January and February with an average of 22% growth, indicating a strong winter with increased overnight visitors”, reported Cape May County Freeholder Director Gerald M. Thornton, liaison to the Department of Tourism.
Data provided by the New Jersey Division of Travel and Tourism, prepared by Tourism Economics, listed Cape May County as second, after Atlantic County, in the State in direct tourism expenditures in 2019. The County outpaced all other counties in Food and Beverage, Retail, Recreation, and Rental income. Rentals generated $2.2 billion in 2019 and $565.4 million in State and Local taxes in Cape May County in 2019.
"The pandemic also closed the US/Canadian Border and prevented Canadian travel to the United States, which added to the overall impact on our tourism industry. On average, Canadian visitors from the Province of Quebec represent 7% of our summer visitor base and is our largest International visitor. Canadian visitors tend to stay longer and fill the mid-week slump. The renewed interest in RVing greatly helped the Campground industry and served to offset the loss in Canadian business. We look toward August and September revenue reports to further close the gap in losses. This will be a difficult year for the tourism industry", explained Diane Wieland, Director of the Department of Tourism.
"The full impact of the pandemic hit in April when tourism was down 99% over the same period in 2019. The loss of tourism during key holiday weekends, such as Easter, Mother's Day, and Memorial Day was devastating to our businesses across the board.
Restaurants are still being impacted with indoor dining restrictions and for many, there is no way they can recoup the losses. I fear we will experience a wave of small businesses closing their doors forever and with that, a huge loss in jobs in the county", Thornton added.
"The Tourism Department made continual marketing adjustments to keep in front of travelers and to let them know we were ready to welcome them when they could travel. Many businesses and tourism organizations stopped marketing efforts amid the uncertainty of the shutdown. We incorporated the County's "Safely Together" message to build our confidence campaign to ensure visitors we were following safety protocols. We started our fall campaign earlier to bring visitors back after the summer season. September and October reservations and rentals are indicating a record fall with more second homeowners staying, increased rentals, and an uptick in home purchases, allowing more people to take advantage of the mild temperatures, and our great assets. With remote working becoming the norm and virtual learning at schools and colleges, business at the beach has become very popular and will help local businesses", said Wieland.