Tourism Climbs in NJ, with Increased Number of Visitors Around the Garden State

Meir Rinde | March 7, 2016 | More Issues
Despite decline in Atlantic City revenues, variety of attractions boosts overall earnings by 3.3%

Click to expand/close
The state’s tourism economy continued to grow last year despite a marked drop-off in revenue and jobs in Atlantic City, with overall spending hitting a high of $43.4 billion last year, newly released figures show.

Among the state’s 21 counties, Atlantic County remained the biggest generator of tourism dollars at $6.7 billion, the state Division of Travel and Tourism said in a report.

But while tourism earnings increased 3.3 percent in New Jersey as a whole, they fell 5.2 percent in Atlantic County, making it the only county to see a decline. Casino gambling revenues, or “win,” fell 6.5 percent.

Statewide, “spending growth was not as robust as might be expected,” the report said. “Spending was constrained due to the continued decline of casino ‘win’ in New Jersey.”

The crisis in the gaming industry, which saw four casinos close in 2014, was also evident in employment. Tourism jobs in Atlantic County plummeted 8.9 percent last year to 47,620 workers. The statewide job number was 318,330, an increase of slightly less than 1 percent.

Despite Atlantic City’s struggles, the overall growth in business was welcomed by Lt. Gov. Kim Guadagno, who oversees the tourism division.

“The good news is that we are doing better,” she said at a NJ Tourism Industry Association conference in Atlantic City last Thursday. “We’ve bounced back in part because of the glorious weather we had last summer. The glorious weather brought a lot of tourists to the Jersey Shore.”

Two of the Shore counties did particularly well. Tourism spending climbed 5.3 percent in Monmouth and 5.1 percent in Ocean. Hotel bed taxes in all of the Shore counties together jumped 8 percent last year, suggesting more visitors stayed overnight during their trips there.

But Guadagno also noted growth in tourism away from the Shore, a trend the administration has sought to promote.

“We don’t want to ignore all of the really great stuff up north,” she said. “The sports and exhibition locales throughout the state, MetLife stadium in East Rutherford, landmarks such as NJPAC up in Newark, all of our racetracks, our county fairs, and the thousands of historical sites that draw visitors from all over the world.”

Fifty-two percent of tourism spending now happens away from the Shore, Guadagno said.

Hotels and vacation homes

Passaic County saw the greatest percentage growth, with its relatively small tourism economy expanding almost 10 percent in one year to $569 million. Cumberland County was in second with an 8.8 percent increase, to $348 million, followed by Hudson, growing 8.6 percent to a little over $2 billion.

Visits and spending have been increasing in Hudson for several years thanks to the proximity of New York City and several other factors, said Bill La Rosa, the county director of cultural affairs and tourism. Travelers embarking on cruises in Bayonne often spend extra nights in the area before or after their trips, for example, and the county’s FIRE industries — finance, insurance, and real estate — make people aware of Hudson as a base from which to visit various attractions.

“That brings people in for meetings and conferences, and they come back,” he said. “They discover they’re in a great location, and they can ‘hub and spoke’ to anywhere, not just in New York but in New Jersey.”

La Rosa noted that Hudson’s hotel inventory is growing, not just in Jersey City and Hoboken but also places to the west like Harrison. He also said his colleagues in South Jersey tell him that many of their young people, the vaunted “millennials,” move to Jersey City for its cultural amenities and ethnic diversity — for example, in the restaurants of India Square.

“We’re very happy about it,” he said of the tourism growth. “It means a lot for people working not just in hotels, but in restaurants and retail. It helps build the image of the county and makes it known that we’re in a good location.”

In Passaic County, the expansion of the tourism sector was reflected in a 14.6 percent jump in spending on second homes and a 12 percent surge in hotel room revenue, as well as strong increases in restaurant, retail and recreation business.

The county’s strengths including a market of luxury and vacation homes amid lakes, hills and scenic vistas, often within driving distance of office parks in Bergen, Morris, and Essex counties. Home prices in the region have remained relatively low since the recession but the number of transactions reportedly climbed sharply in the last year.

County spokesman Keith Furlong noted that Passaic’s attractions include urban destinations like museums and Paterson Great Falls National Historical Park; hiking and boating spots in the county’s western section; and numerous historical sites, like Dey Mansion in Wayne, that local officials have worked to promote. A section of the national park reopened last year after undergoing extensive renovations.

“Passaic County is unique because it’s a mix of urban, in Paterson, Passaic and Clifton, and rural, in West Milford, Wanaque and Ringwood, and suburban, in Wayne,” Furlong said.

In Cumberland County, factors that may have contributed to the growth of tourism included an expanded promotional campaign by the Southern Shore destination marketing organization, said Diane Wieland, the organization’s chairperson. The new campaign, called Explore Beyond the Shore, used print, radio and digital advertising to highlight attractions and events in Cumberland, she said.

The county’s tourism department helped expand the campaign and better target customers, based on trends and visitor demographics, and a tourism advisory group worked to create a diverse inventory of attractions, Wieland said.

“Wheaton Arts Center, AJ Meerwald, NJ Motorsports and their ecotourism activities all fit well into emerging travel trends and are compelling reasons for people to visit for extended stays,” she said.

Cashing in on event travel

After Atlantic County, the area with the biggest tourism economy is Cape May County, which saw an increase of 4.3 percent, or $246 million, to $6.04 billion. Vicki Clark, president of the Cape May Chamber of Commerce and the new president of the state tourism association, said her region benefited from good summer weather that lasted into the fall last year as well as the large number of second homes that draw their owners back to the Shore through Christmas.

The area has also seen more visitors as it continues to recover from misconceptions that Atlantic City and destinations to its south were damaged by Hurricane Sandy, she said.

“We’ve been seeing a steady tick upwards since 2013. We’re not surprised. We were expecting the numbers to increase,” she said.

New Jersey tourism generally has benefited from an improving national economy and certain travel trends, Clark said. They include youth sports tourism, in which trips for traveling sports teams turn into mini-vacations for the whole family, and the growth of food- and drink-related tourism.

“There’s increased interest in anything that has to do with food. New Jersey as the Garden State is perfectly positioned to really be a leader in agricultural tourism. Farm-to-table is huge and of course seafood is always huge along the Shore,” she said.

This year more growth could come from increasing numbers of short trips for special events, such as balloon festivals, oyster festivals, youth sporting events, and destination weddings, she said. She was also bullish on Atlantic City, while acknowledging that the number of casinos is in a “readjustment period.”

“There have been some challenges with gaming in particular, but every other aspect of Atlantic City tourism is on the rise. Dining, retail, entertainment — that’s all growing. Even this time of the year, there are special events on the weekends, and you can’t get a hotel room,” Clark said.

Guadagno pointed out that the Miss America pageant has agreed to remain in Atlantic City for another three years, and a live performance from the city will be featured in Dick Clark Productions’ annual Times Square ball drop program next Dec. 31. The deal will reportedly cost the Casino Reinvestment Development Authority $12 million. A NJTIA official said the CRDA also expects to soon announce about six summer beach concerts by big-name acts.

Good signs for 2016

The state tourism report, which was prepared by the firm Tourism Economics, predicts that strong U.S. employment growth, wage growth, and low gas prices will further buoy the state’s tourism economy. Weather, however, remains a “wild card.”

“As we have seen in the past couple of years, an ill-timed hurricane or winter storm that either impacts travel or forces evacuations of certain communities can have a significant impact on visitation,” the report says.

Clark and other officials said they were also concerned about proposed legislation that they say could raise business costs and reduce the state’s competitiveness, including proposals to raise the minimum wage and require employers to provide paid sick leave.

The report did not address the hotly contested plan for a referendum to authorize new casinos in North Jersey, which could hurt Atlantic City but potentially boost the state’s total gaming revenues by taking business away from New York casinos. Nor did it touch on the troubles of Atlantic City’s government, which is nearing bankruptcy and a possible state takeover.

Among other findings, the report says New Jersey saw a 2.4 percent increase in the number of visitor trips, up from 92.8 million in 2014 to 95 million last year. Most visitors came from within the U.S., while 0.3 percent were from Canada and 7.2 percent came from overseas.

Including direct and indirect impacts, the tourism sector accounted for 9.9 percent of total employment in the state. It directly generated $17.8 billion of the state’s gross domestic product. The figure was $37.3 billion when indirect impacts are included, representing 6.6 percent of the state economy.

Tourism generated $10.2 billion in government revenues, including $4.7 billion in state and local tax revenues.

The report says spending was lower than expected not only because of gaming declines, but because of lower gas prices, which reduced gas station revenues. However, lower fuel spending freed up money that visitors could spend on other things, like restaurants, retail, and recreation. Those three subsectors accounted for a larger proportion of overall tourism last year, while other areas shrank.

In particular, the percentage of all tourism spending in the lodging category, which includes gambling, has fallen from nearly 34 percent in 2009 to 27 percent last year.