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MHLA predicts new opportunities, but also legislative clog, for state tourism

(Jan. 11, 2013) With the new year and a new General Assembly convening on Wednesday, local prognosticators say that the local tourism industry will have to lobby actively for state support and to prepare for the possible benefits that Hurricane Sandy damage to beach resorts north might bring to Ocean City and its environs.

January’s breakfast meeting for the Governor’s Economic Development Committee of Ocean City was held this week at the Clarion, and featured a briefing from Maryland Hotel and Lodging Association President David Reel.

Most important, Reel told the room, was for concerned parties to make their voices heard in Annapolis regarding the state’s shrinking tourism budget.

“I know there’s a lot of cynicism out there that politicians don’t listen,” Reel said. “But from someone who’s been there, let me tell you, grassroots lobbying is a powerful thing. It makes a difference when people show up.”

To that end, the MHLA is a part-sponsor of this year’s “Tourism Day in Annapolis.” On Friday, Feb. 8, those interested will convene at the state’s capital to lobby the State Senate and House of Delegates for the needs of the tourism industry. Reel invited any interested parties in Ocean City to sign up for the sessions.

“Now is the opportunity to get our tourism budget increased and to get some favorable legislation,” agreed the event’s host, Clarion owner Dr. Lenny Berger.

To the industry’s advantage, Reel said, this year’s 90-day regular legislative session in Annapolis will likely be less mired down with some of the familiar quandaries.

“The budget issue will not dominate like it did last year,” he predicted. For the most part, Reel said, much of last year’s fighting was the result of the capital’s Republican minority combating its Democratic majority by taking issues to referendum. But with the relative success of Democrat-backed policies at the polls this past November, such a laborious tactic may no longer be prudent.

“Voters approved a number of things, such as same-sex marriage, in-state tuition for illegal immigrants, and the casinos,” Reel said. “The governor and the General Assembly now know that controversial bills passed will be held up by the general public. The referendum was seen as a real hurdle, but frankly it isn’t.”

However, much of this attention may be deflected to what Reel saw as the two hot-button issues for the coming year – gun control, in wake of the Sandy Hook, Conn. school shooting, and the possible move by the O’Malley administration to abolish the death penalty in Maryland.

Also much talked-about was the possibility that destruction of resort areas in New Jersey by Hurricane Sandy could drive more visitors south to Ocean City.

“There is a lot of anecdotal evidence that those people will be coming down,” Reel said.

However, he cautioned, the most heavily storm-damaged areas of northern New Jersey had never had a strong hotel lodging element, being more grounded in residential property. Thus, Reel said, the turnover of additional traffic coming from the north may not be as rich as some believe.

“We have a lot more hotels, but not that many more people,” Berger said. Many resort property owners have expressed a similar sentiment that the resort’s glut of housing from its pre-2008 success is now dragging it down.

“We have vacant hotels, and that’s a problem. We need to bring people in when our rates are high,” Berger said.

Reel also said he was anxious to see how the state’s addition of a casino in Prince George’s county would pan out. While local racetrack and gaming venue Ocean Downs is the state’s lowest-grossing, with just under $50 million in revenue for 2012, its position is relatively secure due to its geographic isolation. Meanwhile, the Perryville casino, which grosses $98.6 million, has said that its business is being usurped by Baltimore’s Maryland Live!, which raked in almost $230 million for the year.

However, the owners of Maryland Live! were actively involved in lobbying against the state’s sixth casino, saying that site would do to them exactly what they were doing to Perryville.

“Maryland Live! is definitely putting a red light on Perryville, so it’ll be interesting to see, when they open up in Prince George’s, if it has a ripple effect,” Reel said.

Worcester County Economic Development Director Bill Badger said he is working to have the county receive more money from the state’s Small, Minority, and Women-Owned Business Program, which is largely funded through casino taxes. In 2012, gaming contributed more than $5.6 million to the fund, which Badger said has a current pool of about $7.5 million.

Worcester receives little of that money, although Ocean Downs contributed almost $750,000 of taxes to it this year.

Regardless, Badger said, Worcester remains extremely capable in garnering new business investment.

“Our county is still number one in the state for the attraction of wealth,” he said.

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