Inflation Expected to be ‘A little worse’ for NJ Shore Shoulder Season
Steel Pier in Atlantic City was bracing for a 25% to 30% drop in revenue in 2022 compared to one year prior.
Unfortunately, their estimates were pretty close — the summer came in 22% under 2021's numbers.
"We saw the volume, we didn't see the spend," said Anthony Catanoso, owner of Steel Pier.
Heading into the busy season, business owners and industry observers were worried that the COVID-induced pent-up demand that erupted in 2021 wouldn't carry over into 2022. At the same time, consumers this year didn't have any coronavirus stimulus money rolling in.
Catanoso was part of a Wednesday morning panel hosted by Stockton University, which took a look back at the latest summer and looked ahead to the shoulder season and 2023.
"What we did see was a tightening of the wallet," Jim Ziereis, vice president of hotel sales for the Atlantic City region of Caesars Entertainment, said during the panel discussion.
Tourists from the Garden State and beyond had to devote a greater share of their earnings to their actual trip. Gas prices in New Jersey hit an average above $5 in the month of June.
"People were filling up their cars with $100 before they even came down," Ziereis said.
And certain items or attractions may have been more out of reach for regular consumers, as businesses were forced to pass on the added costs they were facing from the supply chain.
"The business people that I talked to told me that their costs were rising more than they could pass along to their consumers," said Michael Busler, a professor of finance at Stockton.
To deal with inflation on their end and make up for any lost revenue, Busler said, a number of businesses introduced fees for customers who made purchases with a debit or credit card.
"The inflation problem, I think, was a serious one," Busler said. "I think it's going to get a little worse going forward."
With consumers getting squeezed, Busler said he's concerned about business at the shore during the fall, which typically offers an extra infusion of cash to help hold owners over for the winter.
"People are spending more on necessities; that gives them less discretionary spending," Busler said. "I'm a little nervous about this coming shoulder season and going into next year."
Revenues for businesses at the shore and elsewhere have also been stifled by labor costs. In order to get workers, many owners had to raise wages significantly.
But, according to Emily Paul, president of the Cape May County Chamber of Commerce, businesses at the shore benefited from the state's new teen worker law that expanded working hours for younger employees during the summer months.
Also, Jersey Shore businesses this year were able to more heavily rely on J1 visa students who come to the U.S. as part of a summer work program. The program was severely restricted in 2020 and 2021 due to COVID-19 concerns.