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Jersey spending looms over OC as resort numbers questionable

(July 5, 2013) Despite high hopes at the outset of the season that the aftermath of Hurricane Sandy would drive some long-time Jersey Shore patrons to Delmarva, a massive marketing campaign by the Garden State, as well as what some see as flagging tourism numbers in Ocean City, seems to have cast an air of consternation over the resort.

Andy Malis, President of the city’s advertising contract firm, MGH, said recently that the resort is “up against the highest competitive spend in history” from post-Sandy New Jersey.

Earlier this year, Gov. Chris Christie authorized $22 million in tourism advertising for the state, on top of already sizable municipal budgets of some Jersey coast resorts. Atlantic City’s own marketing coffers add another $20 to $25 million alone, Malis said.

“We haven’t, in the past, been up against that much advertising from New Jersey, because the sate pumped in so much money this year,” Malis said. “I wouldn’t say it’s drowning out our message, but it’s there and it’s not usually.”

The Town of Ocean City has a roughly $5 million marketing budget, of which roughly $4 million is spent on outside advertising under the purview of Malis’ firm.

Much of that advertising centers on the character of Rodney, a jovial lifeguard who “rescues” the downtrodden and whisks them away to Ocean City’s beaches, which are nearly as well groomed as he is. Jersey’s marketing campaign is much less dynamic.

“It can only be described as sort of a reassurance message,” Malis said. “Most of it is not so much about attracting new visitors as it is about ‘defending their turf,’ so to speak.”

But what Jersey’s advertising does have is volume and cohesiveness. State-organized campaigns are even marketing to specific events on the Jersey Shore, timed throughout the summer.

“The Jersey Shore hasn’t spent much money before and was not at all organized,” Malis said. “But they’re now in our markets very heavily. I live in Baltimore and it’s inescapable. They’re on the radios, the television…it’s very aggressive.”

What is unknown, however, is how much that marketing is having an effect on Ocean City’s core tourism, where economic indicators have been down so far this summer.

Even with the boost provided by the Dew Tour, the town’s demoflush population estimates – created by measuring the volume of wastewater flow in the city versus a per-person average usage – were down 9.8 percent for the past weekend over the same time in 2012.

The last available returns of the state-authorized room and food taxes, of which the town receives a large cut, were also down 8.36 and 8.89 percent, respectively, for April. This may be attributable to wet weather, as some have said. However, the room tax drop still leaves a $2,779,155 revenue gap to close in May and June for the city to hit its income projection of $12 million for the 2013 fiscal year.

The Smith Travel Report, which aggregates data from hotels and motels in its network, mostly franchises and chains, also indicates a reduction in occupancy from 47.8 percent of available rooms in April 2012 to 41.6 percent in April 2013.

This reduction appears to be hitting hardest, relative to the resort’s baseline, through the week. While revenue per available room on weekends was up 2.2 percent over last April, revenue on weekdays was down 21.8 percent.

But flagging numbers in Ocean City do not mean that Jersey is more competitive.

“One of the risks I think they have is that their advertising is sending the message that ‘we beat this thing [Sandy],’” Malis said. “But when a lot of people go to visit some of their favorite things, they’re still not going to be there. They’re not at 100 percent, and we know that for a fact.”

“It would be shocking to me if [Jersey’s marketing] was enormously successful,” he said. “But having said that, I think they did the right thing.”

Ocean City’s advertising, Malis said, is unlikely to be affected by the current season’s outcome.

“I don’t think there’s a compelling reason to walk away from Rodney for next year, but it’s too early to tell,” Malis said. “We’ll have to wait until the weather warms up and see how New Jersey actually does. There’s nothing particular about our campaign to blame or give credit regarding what happens this summer. The forces are much too large.”

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