A gallon of gasoline costs almost a dollar less than it did last Memorial Day weekend, which has some people predicting a boom summer in the tourist business at the shore.
The reasoning is simple — lower gas prices mean more people can afford to drive here to have fun and spend money.
Then again, when the price at the pump goes up, other observers say, that’s actually better news for merchants on the coast. The rationale may be less obvious, but it’s quite logical: South Jersey’s beaches are less than a tankful of gas away from about one third of the national population, or 100 million-plus Americans. And when the cost of that tankful increases, people tend to decrease the distance they want to drive to their vacation destination, so they stay closer to home.
Discerning readers of this newspaper are likely familiar with both theories, from past stories such as these:
“Falling gas prices likely mean rise in tourists,” The Press said in a story published last February. That came a few years after this headline, from April 2012: “High gas cost expected to boost shore tourism.”
But with another summer tourist season revving up, Israel Posner, director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism, says he’s researched both theories — and they’re both wrong.
“I looked at it for 15 years, and I couldn’t find any correlation at all,” he said during a tourism forum this month at the Levenson Institute, based in Stockton’s Carnegie Center in Atlantic City.
“It wasn’t real complicated work,” he explained in a later interview. “I correlated visitations to Atlantic City” — using statistics from the Atlantic City Expressway’s Pleasantville toll plaza, a pass-through point of about 60 percent of the city’s visitors — “with gas prices over the summer. And basically ... there was no reliable relationship between the two,” he added.
That statement has its limits, the veteran Stockton professor said — specifically recalling the summer of 2008, when gas prices shot up to $4 a gallon and beyond. “But within the quote ‘normal’ range (for gas prices), there’s no significant effect.”
In other words, the numbers on the pump go up and down — as they’ve done again this year, when gas was cheaper than $1.80 a gallon at some local stations, only to climb close to $2.50 as the summer driving and vacationing season arrived. And the count of visitors varies, too, but that changes in response to factors other than the price of the drive to the shore.
“To a large extent, it’s weather,” Posner said. “Or it’s event-driven.”
7:25 p.m. Concert goers were out on the Boardwalk in Atlantic City Friday night as they wait…
Still, even with that as his starting line, he doesn’t completely dismiss energy prices as an important factor in the tourism economy.
Neither does Diane Wieland, the tourism director for Cape May County — although she agrees with Posner’s basic point about the price of gas.
“If I want to go on vacation, that’s just going to be part of the cost,” she said.
But as she sees it, “it’s not the price of gas when you’re filling the tank to go on vacation, it’s how much that affects your discretionary income,” said Wieland, who quotes an estimate, reported earlier this year by Time magazine, that lower gas prices will translate into $1,000 in extra income for the average American driver this year.
“If they’re saving an average of a thousand dollars, that’s extra money people have in their pockets to spend on other things,” she said — and for many, that means vacation upgrades.
Posner does buy that basic bit of microeconomics — although he puts it in slightly more colorful terms.
A low gas price “leaves more discretionary or disposable income in the hands of the visitor,” he said. “So there’s more opportunity to grab a piece of that wallet.”