Even with no beach concerts in Atlantic City this year and New York casinos looming on the horizon, the general outlook for businesses at the Jersey Shore heading into the summer is “pretty robust,” but there are some concerns.
That was the overall sentiment from a panel of local experts who spoke at the 16th annual Jersey Shorecast on Wednesday, sponsored by the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at the Stockton University School of Business.
The discussion was held at the Stockton University Atlantic City John F. Scarpa Academic Center.
“I’m cautiously optimistic for the summer,” Oliver Cooke, associate professor of economics at Stockton and editor of the South Jersey Economic Review, said. “Job growth right now has kind of picked up over the first quarter for Atlantic City proper, relative to where we were in late 2023. Unemployment remains very, very low. My sense is that we’re in a pretty decent place with all the headline metrics.”
Before the discussion, LIGHT Faculty Director Jane Bokunewicz presented statistics that highlighted some of the successes of 2023, especially at Atlantic City casinos. Total gross gaming revenue ($1.4 billion) was up 11% from 2022, primarily due to growth in internet gaming and sports betting; in-person gross gaming revenue ($811 million) was up 1% from 2022; and nongaming net revenue was 45% of the total net revenue, compared with 39% in previous years.
But not all of the numbers were positive, as overnight stays were up 8% but were shorter than in previous years. Casino employment was up in general, but labor shortages were still a factor. Also, several panelists from the fall Jersey Shoreview reported that weather was a negative factor in the summer of 2023, Bokunewicz said.
Mark Callazzo, managing partner, RMS Capital, said 2023 wasn’t great for his businesses, and he attributed some of that to a belief that many people finally felt comfortable taking big trips — three years after the COVID-19 pandemic.
“Yeah (last year) was not, not good,” he said. “Our customer count was down. Our average check was down. … I think that a lot of the tourism was lost to people taking the trips that they had put off for three years.”
How did the local tourism industry perform in 2023?
Gary Musich, vice president of sales and destination services for Visit Atlantic City, said he was very bullish with what he sees in trends: “What we booked in 2023 was the best we’ve ever done. It’s the rebound of the event business. … We see the volume coming and growing, and we see the interest in Atlantic City growing in the short term.”
“Sports is one of the largest growing markets, except maybe behind cannabis,” Daniel Gallagher, director of sports sales for the Atlantic City Sports Commission, said. “We came off a banner year. We did about 75,000 room nights in sports alone, which was 250,000 people and $1 million in economic impact. And there’s no question that’s here to stay. The question is, how do we diversify our portfolio to get these sports athletes, these spectators, this affluent demographic, to raise that check price?”
As for how the panelists would describe the region’s current economic circumstances, they are concerned about the overall economy, but are still optimistic for a good summer.
Musich said part of the discussion has to be how to market Atlantic City: “I think that’s a big part of what we’re all talking about, consolidation and message and branding. We’re changing some gears in how we deploy and focus and talk about how we sell this city. We’ve stopped talking about what makes our community unique.”
What about labor shortages, which were still a concern in 2023, and whether or not labor will have an impact on 2024 summer tourism?
“I’m not seeing it near as much as it was,” Callazzo said. “I think there are plenty of people looking for jobs, but I think the wage inflation is not going away. Pre-pandemic, I think pizza makers made $15 to $20 an hour, and, now, they make $25 to $30 an hour. And it’s not going to go back, because wage inflation is sticky. So, we’re just stuck with those higher wages. But I think there’s plenty of people that are looking and willing to work now.”
Looking to the future, and when asked if there was anything else that might impact performance anticipated, panelists said it’s a big wild card, because no one has a crystal ball and weather will play a big role.
“It’s also always a question to what extent does inflation differentially impact certain segments and demographic groups? Because you can make a case that continuing high inflation, especially like eat-out-of-home inflation, which I think everyone who goes to dinner these days is like, ‘Wow, yeah, that bill is a lot bigger than it used to be.’ That also feeds into maybe staying as opposed to flying somewhere else. Now you get, like, ‘OK, we’re going to tighten up and we’re going to be closer to home,'” Cooke said.
With the absence of beach concerts and the presence of new events like the North to Shore Festival, the panelists were asked what they thought the effect would be.
Musich said that, if there will be beach concerts again, he believes they need to be subsidized. And he also said he doesn’t have an answer as to how to do that.
“But Bader Field’s an option, or subsidizing things back into Boardwalk Hall is an option. We’ll see how it impacts the summer. 70,000 people on the beach on a weekend in the summer, I’m not convinced overall that creates an impact. It creates, I think, product for the city and people talking about the city,” he said.
Looking into the future, the panelists gave their insights into what new challenges/new opportunities should be considered in 2024. Responses were varied from the growth of women’s sports to improving marketing efforts to diversifying the city beyond just leisure and hospitality to changing Atlantic City itself.
“I think the overlooked piece here is the city needs to fix itself. Bringing people to the city is really what we need to change. People come here. They work here. They get in their car. They drive offshore to where their house is. The city’s not going to change until we have more of a population that lives here. Adding people also helps the clean and safe perception,” Callazzo said.
