Making the News

Press of Atlantic City

Originally Published:Friday, May 29, 2009
http://www.pressofatlanticcity.com/business/article_cb333318-fb10-5a3c-9e75-bcd5871ed291.html

Panel finds some bright spots amid mostly hazy 'Shorecast'

By Kevin Post
Press of Atlantic City

 

GALLOWAY TOWNSHIP - There were some hopeful signs within the bleak-as-expected outlook for the tourism season Thursday at the "Jersey Shorecast" of the William J. Hughes Center for Public Policy.

But whether the casino industry, the region's main economic engine, returns to robust growth will depend on the state and Atlantic City making it possible.

Oliver Cooke, an economist with the hosting Richard Stockton College of New Jersey, said one saving grace for the summer will be the shore's favorable cost comparison with other vacation options.

"To the extent that families, regional families in particular, substitute more local destinations like South Jersey for more distant ones - plane trips and such - this may serve to mitigate what otherwise would be a very tough summer," Cooke said.

Otherwise, he said, the indicators are not good, particularly for employment.

Job losses in Atlantic County - already at 5.3 percent annually and outpacing the state's 3.3 percent loss rate - are accelerating.

"So I think that while the economy in southern New Jersey might stabilize sometime later this year, the job market is likely to lag for two or three quarters," Cooke said.

Another panelist, Norris Clark, a consultant who oversees sales and marketing for Wildwood amusement powerhouse Morey's Piers, said the corporation's discounted preseason ticket sales were up 7 percent in winter and 10 percent in spring.

"I believe there are significant pockets of people in Philadelphia and northern New Jersey whose constitution states that they have an inalienable right to come back to the Jersey Shore and they will not be denied that," Clark said, so they adjusted for the bad economy by getting their tickets at a discount.

But then Sunday sales on Memorial Day weekend fell 10 percent from last year, showing there is less disposable income this year, especially among young people, he said.

Cooke later added that spending cuts by tourists will be felt mainly by retailers at all levels.

Joe Weinert, with Spectrum Gaming Group in Linwood, bluntly assessed what's ahead for the casino industry and what can be done to improve that diminished future.

Due to competition in surrounding states taking a significant portion of Atlantic City's convenience gaming market, he said, what was a $5.2 billion industry in 2006 is now probably a $3.8 billion industry.

"$1.4 billion in gaming revenue is gone, evaporated. Most of that is not coming back," Weinert said.

Growth instead will depend on continuing the trend toward destination-worthy facilities such as the Borgata Hotel Casino & Spa, the Harrah's Resort expansion and the new Revel casino hotel - unfortunately delayed by the credit crunch and recession. "Revel is what this city desperately needs," he said.

"The key for Atlantic City and therefore the whole region is to build a product that will cause people to drive past Philadelphia - and pay those ridiculous tolls and parking fees - to come here and stay in Atlantic City," he said.

Mary Herman, a real estate agent with Keller Williams Realty in Northfield, presented an even gloomier assessment of her industry.

"It's very, very challenging to be a Realtor. A lot of my friends have left the real estate business," Herman said.

The only thing working right now in housing, she said, is the $8,000 credit for first-time homebuyers.

Finally, anyone who thought that surely the beer industry would be immune from the downturn discovered that's not quite the case from Mark Kramer, president of Kramer Beverage Co. in Hammonton.

He said taxes have increased the price of beer - generally the most affordable alcoholic drink and therefore preferred by lower-income people suffering most from the economy.

He also said beer drinkers have traded down, buying less expensive beers, but this year looks a little better.

"We have a saying at Kramer Beverage: Flat is the new up," Kramer said. "So far, year-to-date, we are flat."

E-mail Kevin Post:

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