Summer tourists return to Ocean City, bringing business confidence with them

OCEAN CITY

An overcast morning in this Maryland beach town bodes well for local merchants, and last Monday was no exception. Lunch-hour traffic in Bill Dreibelbis’s Quiet Storm Surf Shop was heavier than normal for the time of day as sun-soaked tourists perused racks of swimsuits, flip flops and skateboards.

His store is something of an anomaly on the Ocean City boardwalk. At 32,000 square feet, its footprint is abnormally large and its tall, glass-paneled storefront is hard to miss. The shop is also one of the few offering name-brand apparel, rather than novelty tees sold alongside shot glasses and spray-on tattoos.

Dreibelbis opened this store in the summer of 2010, a risky time to begin a new business venture. The national economy was only beginning to recover and families were still prioritizing necessities over vacations.

“My business is going up, but we’re only three [summers] old,” said Dreibelbis, who has operated another location since 1983. “Most people tell me it’s pretty stagnant ... My one friend has one of the larger restaurants in town, and he said, ‘Flat is the new up’.”

Ocean City did not endure the tumbleweeds-through-town-square kind of downturn experienced in some other vacation destinations. The vast majority of its visitors travel by car and can find modestly priced lodging, making it a more affordable option than, say, a cruise through the Caribbean or a flight to Florida.

Even still, the downturn was palpable. Fewer people were making the summer pilgrimage than in year’s past, and those who did were staying for shorter lengths of time and spending fewer dollars at restaurants and retailers.

The most recent prognosis is more optimistic, if cautiously so. An estimate of city visitors, based on sewer system usage, shows that an average of 250,146 people were in town each weekend of June. That’s up 1 percent compared with the same month last year, and up 8.3 percent compared with June 2010.

As a result, there is greater confidence among the business community here that the beach economy can once again support the creation of new small businesses, and the expansion and renovation of those already in place.

“The people are here now,” said Melanie Pursel, executive director of the Greater Ocean City Chamber of Commerce. “I think they’re still pinching their wallet a little bit. They’re still being cautious about spending. But they’re coming and that’s good.”

‘The new economy’

There are miles of low-rise shopping centers along Coastal Highway, the main artery that divides Ocean City into properties that line the Atlantic Ocean to the east, and Assawoman Bay and the Isle of Wight Bay to the west.

The stores at the highway’s intersection with 45th Street would blend in among them if not for the bright orange storefront of the 45th Street Taphouse Bar & Grille that opened in March. OC Steamers, a seafood restaurant next door, opened three months later.

The eateries share more than owners. They also feature an outdoor bar and seating area that offers picturesque views of the bay’s choppy waters and the evening sunset. For Executive Chef and General Manager Jeff Burton, that makes all the difference.

“If I was opening a restaurant not on the water like this is, I’d really be tentative to do it,” Burton said. “We had the luxury of having the beautiful waterfront already owned by our ownership, and that’s really what propelled us to do what we’re doing.”

Burton has lived in Ocean City for 13 years, working in that time as both a real estate agent and restaurant manager. The beach is a competitive place for restaurants, even those that provide 36 beers on tap, and as of this week, all-you-can-eat crabs, he said.

But the economy’s improvement, in part, motivated the property owner to renovate the building and decide the time is ripe to make a go of the restaurant business.

“I truly think this has been one of the better years I’ve seen in the last three or four years in Ocean City by far,” Burton said. “We’re new, so we’re catching the beginning of the new economy.”

Worcester County collects a one-half percent tax on food and beverage sold in Ocean City. Data show the tax generated $173,916.81 in June 2011 and $269,197.37 in July 2011, a 10 percent and 11 percent increase, respectively, compared with the year before.

(The figure dipped 12.8 percent in August 2011 compared with the prior year, though that number is skewed by the city’s evacuation during the last weekend of the month for Hurricane Irene.)

Donna Abbott, Ocean City’s director of tourism and marketing, said those statistics play out anecdotally through the city as establishments such as the 45th Street Taphouse open and other businesses, some generations old, make plans to grow.

“We have a lot of family-owned-and-operated businesses in this town, and a fair number of businesses that have been owned for generations. They’re here year after year,” Abbott said. “I’m not just seeing new businesses coming in now, but also existing businesses that are renovating, updating, expanding, and I think that is another good sign.”

Time for expansion

About 20 blocks north of the Taphouse, Tammy Patrick-Cebula has been rolling with the economy, for better and worse, since 2006 when she and her husband opened the doors to Galaxy 66 Bar & Grille.

The Cebulas thought three years ago that they could make better use of the restaurant’s rooftop, which at the time included a 10-seat bar and tables for about 40 more. The construction began last winter and was completed in May.

The 5,000-square-foot area now boasts a rectangular bar that fits 45 people. There’s a 10-seat raw bar featuring New England and Eastern Shore shellfish, a full-service kitchen and seating for 150 more. During a recent Sunday Happy Hour, customers sipped cocktails and swayed to live music from a band called Pasadena.

“Every entrepreneur has a wonderful idea. It’s just a matter of whether the people will like it or not,” Patrick-Cebula said. “You can’t sit and wait for things to happen.”

Greg Shockley has also seen the economy ebb and flow in the more than 20 years he has owned and operated Shenanigan’s Irish Pub & Grille and the 45-room Shoreham Hotel that sits above it. The recent downturn brought business to the slowest point in his career.

“When times are good and you’re making money, you’ll let little things slide to the side,” he said. “Now the microscope is on everything. Every decision you make has an implication cost-wise, service-wise, you just have to balance it out.”

Hiring has been one of the more vexing decisions in recent years as more and more visitors waited until the last minute to book rooms, leaving Shockley and other hotel operators uncertain how many workers to have on hand.

“It’s that fine line you walk of making sure you’re saving costs and still providing the customers good food and good service,” said Shockley, who also heads the Maryland Board of Tourism.

Ocean City collects a 2 percent tax on hotel room bookings. Like the food tax, the numbers are trending upward. Data show the city collected $2.26 million in June 2011 and $3.52 million in July 2011, a 3.6 and 4.5 percent increase, respectively, compared with the prior year. (Tax revenue fell 5.6 percent in August, again in part because of the hurricane.)

“There was uncertainty as to how the season was going to go because vacationers were booking really close to that departure time and it made people nervous that bookings weren’t coming in in advance,” Abbott said.

This year advanced booking has seen a return with some vacationers committing to rooms as early as February and March.

“That boosts everyone’s confidence when they know those bookings are there for the later part of the summer season,” Abbott said.

Though this summer appears off to a strong start, there are still many weeks left to go. The prime tourism season kicked off with last week’s July Fourth holiday and will stretch until Labor Day weekend.

“All the pieces need to work together now,” Shockley said. “We need the front of the season to work, we need July and August to work, and we need the end to work. So far this year, the front end has been very good.”

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
Comments
Show Comments
Most Read Local