COURT HOUSE – After the first three quarters of 2022, Cape May County saw a more than 18% increase in the amount of occupancy tax collected in the county since the onset of the Covid pandemic.
According to information provided by Diane Wieland, Director of the Cape May County Department of Tourism, the amount of occupancy tax collected leapt by over 100% between the first two months of 2019 and January and February 2022. Through August, which is the last month figures were available from the state, occupancy tax collection was up 18.62% from 2019.
Wieland said the county saw 18 straight months of occupancy tax growth, according to information provided by the New Jersey Treasury.
She said Cape May County accounted for 21% of all the occupancy tax collected in New Jersey, year to date. Cape May County also saw a 96% recovery rate in 2021, while the state was hovering at about 50%.
Occupancy tax is collected in all 21 counties in New Jersey, and according to Wieland is used to measure overnight stays across the state. The numbers do not reflect the total amount of tourism dollars spent.
“Cape May County’s direct tourism expenditures in 2021 were $6.6 billion, an increase of $1.16 billion over 2020. These numbers include lodging, food and beverage, retail, recreation, and transportation sectors. The county reached a record $6.9 billion in 2019 and has fully recovered in the lodging sector,” Wieland said.
Wieland said there was a huge uptick in leisure spending in 2021, particularly in travel, after people were homebound due to Covid. Forecasters suggested there would be a slowdown in tourism in 2022 due to inflation and high fuel costs.
“And inflation put the brakes on travel and vacation spending in 2022,” she said.
Wieland said occupancy tax was only one part of the tourism industry, but with growth in that sector, other areas, such as food and beverage services, retail, and recreation would reasonably follow. This is despite concerns for the 2022 season.
“We started the summer season with serious concerns about a labor shortage and reduced visitor spending due to skyrocketing inflation,” Wieland said.
Wieland said the county was eager to see the year-end report from the Division of Travel and Tourism to see if occupancy tax increases would offset the reduced spending in the other sectors.
“Family budgets were greatly impacted with increased costs in rent, food, utilities, and gas costs that greatly impacted discretionary spending,” Wieland said.
Wieland said inflation drove up room rates, which accounted for the nearly 20% increase in occupancy tax collection. She said there are other factors that are used to measure tourism including traffic counts on the Garden State Parkway, beach tag sales, and parking meter revenue, which all trended down over the summer season.
From January through August, the traffic count on the Garden State Parkway was down 3.19%, and beach tag revenue was down an average of 8%. Traffic data reported by the New Jersey Transportation Authority showed a 3.19% decrease in vehicles or 5,269 fewer vehicles through the Great Egg Harbor toll plaza year-to-date compared to 2021.
The expansion of the traditional summer season to a solid 7 months will influence the final expenditure report and could offset reduced visitors and spending during the traditional summer season.
“The success of the Department of Tourism’s marketing campaign to expand the season beyond the summer is working to bring visitors back after summer and grow spending over a longer season.” County Commission Director Gerald Thornton said. “Cape May County is no longer just a summer destination.”
The first two quarters of 2022 proved to be better than predicted and based on figures from two months of the third quarter reported, Cape May County is on track to exceed 2021 end-of-year totals. The total amount of occupancy tax collected in 2021 was $16,297,892. As of the end of August, year-to-date 2022 occupancy tax collected totaled $15,224,076.68. That was with four months still to go.
Wieland said the reopening of the Canadian border in November 2021 gave a boost to the tourist economy with some hotels and campgrounds reporting about a 75% return of regular Canadian visitors. Wieland said inflation and gas prices were a deterrent for some Canadians, however, the Department of Tourism hopes to reconnect with the Canadian market, bolstered by a Cooperative Marketing grant of $18,000 from the New Jersey Division of Travel and Tourism for 2023.
This is in addition to an increase of $250,000 allocated to the Department of Tourism by the Cape May County Board of Commissioners in September 2020. The additional funds were spread over two years.
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