Rosario Palmieri has been cutting pizza pies into slices every summer since he can remember at Pisa Pizza on the Ocean City Boardwalk. The 21-year-old now manages the family-owned restaurant and thinks he knows the seasonal business relatively well.

But this year has already surprised him.

Going into the spring, Palmieri saw signs that the recession was over and expected brisk business immediately. That hasn't happened - so far.

"I thought the economy, we were getting out of the hole we were in and people would spend more than last year, even with the weather," Rosario said. "The parking lots are full, but people aren't spending. It's really too early to tell."

Despite the slow start and rising gas prices, most proprietors, including Palmieri, expect the local tourism industry to rebound slightly this summer, a confidence they have not displayed since the economy took a downturn a few years ago.

By today, they will know whether that optimism was justified, as Memorial Day weekend nearly always sets the tone for the entire summer.

Local proprietors believe weather matters more than anything else, a long-held notion challenged by a recent economic study at Richard Stockton College in Galloway Township. Palmieri, of the Seaville section of Upper Township, and other local business owners blame the poor early start on what they say is an unusually cold, rainy spring.

Economist Oliver Cooke disagrees. He examined rainfall, consumer confidence, state unemployment and gas prices during the past 35 years and compared those numbers to the annual change in revenue reported by proprietors in Cape May County.

Cooke, an associate professor at Stockton, isolated the five best annual performance gains and five worst losses, and found that rainfall and unemployment were higher on average during the five best years.

"Clearly, what this shows is that weather, in a general big-picture sense, has an effect," Cooke said. "Having said that, take a family that books a week's vacation in Cape May months ahead of time. That family has no idea about the weather."

Rain might force families off the beach - a low-cost, if not free, activity - to go shopping, dine out and participate in other activities that cost more money, Cooke said.

"If it rains, if anything, you might actually see the reverse," he said.

Consumer confidence - 22 percent higher during the five best years - proved to be a more telling statistic than weather.

"Consumer sentiment is important because it's an indicator of the overall economy and includes a bit of retail gas, because as retail gas prices float up and people pay more at the pump, they become more bummed out about the economy," Cooke said.

Paul Knierim was not surprised to hear that.

Knierim, 33, manages Carmenucci and Sons Pizzeria in Ship Bottom on Long Beach Island. Born and raised in the Manahawkin section of Stafford Township, he has worked in the local hospitality and tourism industry along the narrow, 18-mile stretch of coastline since he was a teenager.

"People always get scared," Knierim said. "But (the tourists) always show up anyway."

Palmieri also noticed just as many people visiting the resort during the recession, but he said they spent less.

 

"The parking lots have been filled on the weekends," Palmieri said. "Everything's going up, but their pay's not, so people could only spend so much on food. Maybe they used to eat out every single night, and now, they still come, but just go out three nights and cook on the rest."

Gas prices also play a major role - they were 40 percent lower during the top five years - although their effect is less predictable, Cooke said. He said high gas prices can encourage more people to vacation at the shore because a local trip is less expensive than a vacation that involves flying.

"That works in favor of shore communities," Cooke said. "But there's also the income effect, which is important. When people show up at the shore, they've spent more money getting there due to high gas prices, so they have less disposable income."

Palmieri said he believes post-recession spending urges will win out over any penny-pinching provoked by rising gas prices this year.

Regional differences

Cooke did not examine revenue on Long Beach Island, but he said the four factors he focused on - gas prices, unemployment, consumer confidence and rain - likely have a similar but less dramatic relationship to revenue there as in Cape May County because Ocean County has a less-seasonal economy.

Atlantic County differs from those areas because of its casinos. Even though the Atlantic City gaming industry has been dismal the past several years, local businesses are far less dependent on seasonal tourism.

"In Atlantic City, you have a much more diversified economy. That's not to say the summer season isn't big there. It is. It's just you have a much more consistent flow of visitors," Cooke said.

Cape May hoteliers offer excursion packages to Atlantic City - an especially popular option during inclement weather, Cape May County Chamber of Commerce President Vicki Clark said.

"It's so vital that Atlantic City be vital," said Michele Gillian, executive director of the Ocean City Chamber of Commerce. "It affects everything: the price of our houses, the price of our rentals. We're one region, and we definitely (market) to different visitors, but the young families and other visitors we host for weeks at a time come to Atlantic City."

The Greater Atlantic City Chamber tracks retail and restaurant meal volumes, in addition to other factors that indicate how consumers spend locally, chamber advocacy committee Chairman George Lynn said.

"Gaming revenue, as that declines ... it creates a gloomy picture of our region," said Lynn, former president and CEO of the AtlantiCare Regional Medical Centers. "Between 2005 and now, Atlantic City has kept its base in terms of the numbers of people who come here, around 30 million. Although it's true they're not spending the way they once were."

False positives

Tourism officials and business owners throughout southern New Jersey agreed with Lynn. So although beach-tag sales and summer-rental reservations were up at the end of April compared to the same time last year throughout the region, that does not guarantee a better economic performance this summer, Gillian and local Realtors said.

Advanced bookings are up between 5 percent and 30 percent, Clark, Gillian and local Realtors said.

Argus Real Estate, which handles nearly 100 properties on Absecon Island, has 15 percent to 20 percent more units filled, agent Diana King said.

But King, as well as others interviewed, said the recession never dramatically hurt rentals. Parking-lot revenue also continued to rise during the down years, as did beach-tag sales, Gillian said.

"We know they were still with us, but they weren't spending like they used to," she said.

Currently, consumer confidence - Cooke's pick for the most consistent predictor - is at 69 versus an average 79 for the five worst years since 1976, based on his research.

"That does not bode well for the summer season," Cooke said. "None of it looks very good. Four-dollar gas and 9 percent unemployment? That doesn't look like a banner 2011 to me. I still think it's likely we will see some modest gains, modest growth, with the caveat that it's a function of how bad the past four summers were."

Contact Emily Previti:

609-272-7221

 

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