DIAMOND BEACH – Cape May County is attempting to maintain normal in a changing tourism industry, its tourism director told members of the Cape May County Chamber of Commerce.
“The new normal,” county Tourism Director Diane Wieland said May 15, is a 3% to 5% range of growth.
The rate, Wieland said, is based on occupancy tax collection and traffic counts.
The county, she said, saw 5% growth from 2023 to 2024, which was second only to Hudson County with 6%. Cape May County’s increase over that time frame was $387.9 million.
Wieland’s 2025 tourism outlook presentation began with the economy’s impact on tourism, which she called one of the “most fragile industries in the world.” She said tourism can be impacted by natural disasters, political changes and an uncertain economy, to name a few factors. However, she said Cape May County has shown resilience in the wake of such events as Superstorm Sandy and the Covid-19 shutdowns.
“The flexibility and adaptability of our tourism industry are evident in the survival mentality of the business community, showcasing their gift as they repair, replace, and upgrade their properties in the aftermath to welcome return visitors and attract new customers,” she said, reading from a PowerPoint presentation.
Wieland said 29% of Americans will opt for domestic travel rather than international destinations. There is a trend that is shown in groups from millennials to baby boomers who want to relive the past and rekindle memories.
She said a travel industry survey shows that 80% of Americans are planning vacations in 2025, which is a 7% jump from the previous survey. The survey also found Americans are budgeting more money to spend on a rising number of trips, and that they are now viewing travel as an essential part of life.
Wieland said there are more than 12 million visitors to the Jersey Cape in the summer, supporting more than 4,700 jobs and generating $668.5 million in state and local taxes.
Visitors from Canada, primarily from Quebec, made up 7% to 9% of pre-pandemic guests. Another 1% came from Ontario. Most make the drive to Cape May County.
Wieland said the lodging industry has seen a fair number of cancellations but did not give statistics. She said the reduction is influenced by several factors beyond tariffs and annexation talk.
She said the economic situation in Canada is responsible for a decline in travel to America over the last three years. The U.S.-Canadian border was closed between March 2020 and November 2021, affecting two summers.
Wieland believes the number of Canadian tourists will rise as their economy improves. The Canadian dollar is currently trading at 69 to 70 cents against the U.S. dollar, meaning they lose 30 cents on the dollar when they enter the United States.
New Jersey began releasing economic data in 1994, and since then, the Cape May County tourism industry has grown every year with the exception of 2020, due to Covid-19. The economic impact, Wieland said, grew from $2 billion in 1994 to $8.1 billion in 2024.
The last decrease was in 2020, as tourism spending dropped from $6.9 billion to $5.4 billion. However, by 2021, spending was back to 2019 levels and was at its highest point in 2024 at $8.1 billion.
For the last two years, the average grown rate was 4%. Wieland said between 2021 and 2022 there was an 11% rise in visitor spending, which the county would not likely see again soon. She attributed the double-digit rise to “revenge tourism,” a term used to describe people coming out after forced Covid isolation in 2020.
Wieland said Cape May County would continue to see growth in 2025, despite a decline in Canadian visitors, saying she anticipated a 3.9% growth rate this year. She said part of this will be due to the fact that 72% of Americans plan to take a road trip in 2025.
She said the rising cost of air travel compounded by REAL ID requirements for domestic flights, a decline in disposable income and somewhat lower gasoline prices will account for more people driving to their vacation destination.
Wieland said 42% of visitors to Cape May County have said that the economy has affected their vacation plans. “Many travel planners are also reassessing their budgets due to economic uncertainty and planning and booking closer to their vacation dates,” she said.
She quoted YouGov.com, saying 26% of travelers book their trips within 30 days of departure. She said many of them are looking for lodging costs that fit into their budgets, booking midweek trips or traveling in the shoulder seasons.
She said travel planners are being more price-sensitive, with 42% saying the economy is impacting their spending, 26% are opting for short stays, 42% are reducing costs related to food and beverages, including more casual dining, and 44% are cutting down on retail purchases.
Wieland said the extension of the tourist season into the shoulder seasons has accounted for a 4.9% increase in occupancy tax collection; however, she cited the disparity between taxes collected and a return on the funds, which were supposed to be dedicated to supporting tourism, arts and history.
In 2024, 25.5% of the nearly $194 million in occupancy tax collected went to support those three areas. The law reads that 40% of the occupancy tax should support tourism, arts and history. She said when she raised the question with a state official she was told it was only “a guideline.”
“It says ‘shall’ (be allocated). Haven’t you ever read the Bible?” Wieland said.
Wieland said Cape May County saw a 6% return of occupancy tax money collected, compared to 12.5% for Middlesex County and 14.5% for Morris County.
“The formula is flawed, with no incentive to work harder,” she said.
Contact the reporter, Christopher South, at csouth@cmcherald.com or call 609-886-8600, ext. 128
