(Feb. 15, 2013) The Ocean City Council has approved a request by the town’s Tourism Advisory Board to allocate $57,000 to subsidize two summer 2013 events – one well-known, and the other an initial foray into a market that, while never actively solicited by the city, has apparently benefitted the resort for some time.
TAB chairman Greg Shockley said at this week’s council session that the board has thus far seen 22 new event applications, of which 17 were approved.
“It’s a great vetting process,” Shockley said, “it allows us to see how strong these promoters are before they get too far along in the process, and to weed out the ones that aren’t up to what Donna [city Tourism Director Donna Abbott] desires and what the city desires.”
TAB – made up of a committee of resort business owners and executives – is given $300,000 per year of discretionary spending by the city, to be used as seed money for events that promote tourism growth. All allocations must receive final approval by City Council.
In the latest case, TAB recommended $35,000 to be given to the OC Bikefest, a staple event in the resort since 2011, as well as $22,000 towards further expanding the United States Specialty Sports Association’s Girls World Series softball tournament.
While never officially backed by the city, the latter event has been a presence in the resort for some time. For the past seven years, the tournament has been held at fields in and around Salisbury, owned by Wicomico County. But the size of the event – 4,500 players, plus 75,000 spectators, over a span of three weeks from July 17 to August 3 – considerably exceeds Salisbury’s lodging capacity, meaning that more than a third of the participants stay in Ocean City, according to Wicomico County Parks, Recreation, and Tourism Director Gary Macke.
“We’ve already seen the impact in Ocean City, quite favorably, where these teams are coming in from all over the country and want to stay at the beach while they play softball in Wicomico County,” Abbott said.
The additional funding from Ocean City will allow the event to hold a third opening event this year, now that the tournament has been expanded from two brackets to three.
“These aren’t the same people staying here for the whole three weeks,” Macke said. “We’ll be using Perdue Stadium twice, and now we’re going to have the third one at the beach.”
Total costs for the event are roughly $440,000, according to Macke, including $80,000 of bid money to the USSSA to secure the rights to the event. Even with returns from advertising, sponsorship, and gate fees, Wicomico County still pays $120,000 of its own budget for the tournament.
But Macke also estimated the event’s economic impact to be upwards of $8 million, largely due to the volume of hotel rooms needed. Ocean City’s Hotel, Motel, and Restaurant Association has already agreed to block-sell more than 4,000 room/nights in the resort to tournament participants.
With a number of the city’s special events being lucrative yet burdensome, the town has recently been looking for some lower-commitment options, with youth sports often being cited as providing a reliable return.
“There isn’t that part of the cost involved that doesn’t show when you first start talking about it,” said Mayor Rick Meehan. “It’s very clear what our investment is and what the return will be.”
“This is a first step in what we hope is a regional sports marketing approach,” Abbott said.
According to Macke, the state will be looking to provide “roughly half-a-million dollars” in seed money for sports marketing in this year’s budget, under Maryland Office of Sports Marketing Director Terry Hasseltine.
“Terry will be able to go out and market what we have,” Shockley said. “It also puts us in the driver’s seat as far as some of the timing. As we grow into this market, we’ll be able to dictate when some of the events come.”
The OC Bikefest will be in its third year when it returns to the resort this September, although only recently was a formal memorandum of understanding inked between the festival organizers and the city for future events. In past years, and under the current memorandum, promoter Cliff Sutherland pays the city $110,000 for in-kind services rendered during the event, as well as the rental of the inlet and convention center parking lots.
While it may seem odd that TAB is providing Sutherland with city funds to help pay a fee that the city itself charges, Sutherland said the intent of the town was to maintain its standard rental and service fees across the board.
“We’re paying the rent for the parking lots regardless, and I’m assuming they’re looking at this as a successful event that they want to help to stay,” Sutherland said.
However, Sutherland noted that he has taken a total $183,000 loss over the first two years of the event.
“Like any business, you have to invest money, and you’re not going to make money back right away,” Sutherland said. “We’ve asked TAB to recognize several things. First, we have lost money and we would like to be a for-profit event, if possible. Second, we’d like to maintain the quality of entertainment and management, to keep this a first class event.”
According to Sutherland’s data, the average Bikefest attendee is 52 years old and has an income of $92,000 per year.
“We believe the quality of the entertainment we bring in also brings in a customer base that has a higher disposable income,” Sutherland said.
This year’s headline acts at the inlet will be Jackyl on Thursday, Fog Hat and WAR on Friday, and America and Three Dog Night on Saturday.
Sustainability of funding continues to be a conundrum for TAB and the city. Since its inception, the bulk of the board’s funding has gone towards the summer laser and fireworks shows put on for the city by T.E.A.M. Productions.
While the move has been wildly successful for visitors and businesses, TAB’s continued funding of a program that does not, by its nature, generate a direct return has caused concerns over the future of the board’s ability to seed new events on a set amount of dollars.
“We’re rapidly approaching a point where we need to have a discussion with the city on how that works out,” Shockley said.
“I’d like to have that discussion soon,” said Councilwoman Margaret Pillas. “Everyone who comes to town ties up your funds, and you’ll just have less and less.”