Spend long enough in finance, and sunscreen and beach towel purchases aren’t just cash register transactions; Jersey Shore views aren’t just for postcards.
These start to look like a snapshot of the economy.
Christopher Maher, CEO of OceanFirst Bank, happens to be one of those longtime finance leaders. He thinks there’s good reason to pay attention to how tourism at the Jersey Shore is faring. For him, it’s a gauge of how his sector’s clients are feeling about opening their wallets.
And, right now, they’re feeling pretty good about it.
“People are still continuing to visit places like the Shore this summer in high numbers,” he said. “It is a little quieter than it would’ve been a year ago, however. That might’ve been a blessing in disguise, as we were starting to hit some capacity issues starting in 2022.”
Maher expects folks might’ve penned in even more lavish travel, such as European vacations, for 2024.
Looking ahead, he’s anticipating the local tourism economy to continue to benefit from the pandemic’s lasting changes.
“While more people are spending time back in the office, they continue to have flexibility with schedules now that they didn’t have before COVID,” he said. “More often, today, they can take a three- or four-day weekend. That has enhanced the value of experiences at the Shore.”
For the many businesses, restaurants, hotels and rental properties in the Shore’s economy — those that emerged on the other end of a pandemic that dampened tourism business — that’s a positive.
Maher noted that vacationers are also experiencing extended Shore seasons today due to generally milder fall and winter conditions. Attributing it to climate change, Maher said people are showing up to the Shore before June and well after August — sometimes, as late as Halloween.
That’s all contributing to optimism for local financial sector clients involved in that space. But, there’s also a collective recognition that the intense rebound of business immediately following the worst of the pandemic’s impact wasn’t going to be long-lasting.
“That’s why, from my perspective, Shore tourism is unlikely to grow a lot from where it is now,” he said. “We saw strong growth last year and the one before, and that’s leveled off. The market is still healthy, but I think we’re going to return to a more sustainable pace.”
Maher expects tourism growth will still be available in other areas.
“That will be driven by events,” he said. “We have an exciting couple of years in New Jersey, between the World Cup (and) the country’s 250th anniversary, which will be a big deal in this market.”
Making something of his own plug, as a member of the board of trustees for Monmouth University, Maher said he’s excited about the new 30,000-square-foot home of the Bruce Springsteen Archives and Center for American Music on Monmouth’s campus.
“We believe when that facility is launched (in 2026), it will be an international destination for music tourism,” he said. “It’s just one more of the significant projects for the region we’re excited about.”
Functioning day-to-day
As a follow-up to a year of cascading industry catastrophes, 2024 has been a welcome calm in the banking sector for the industry’s leaders.
Michael “Mike” Affuso, a leading voice of the state’s banking sectors as CEO and president of the New Jersey Bankers Association, said that, after last year’s isolated bank failures, the local banking space has avoided any fallout.
It’s also, he said, performing as well as can be expected in what he considers to be a challenging environment.
“The fact that rates have settled at an elevated level means we do see a dampening of loan demand,” he said. “We’re not going to see refinancing of loans when there’s still time on it because of the place interest rates are at. Supply is low for housing, so, folks really have to think about whether they need to enter the market.”
In somewhat uncertain times, he’s confident as one can be about the continued strength of the local banking space.
“Of course, we’re in a federal election year, and, as we all know, politics is unbelievably tumultuous,” Affuso said. “We’ll just have to watch and wait to see what happens there.”
Christopher Maher of OceanFirst Bank said one important indicator when it comes to the position of local banks is how willing and able customers are to pay back lenders.
“And, when it comes to credit performance — people paying back their loans — we’re in one of the strongest environments we’ve ever seen,” he said. “We just had banks’ earning seasons, and, what we saw among banks of all sizes is that they’re doing really well with their credit portfolio. Loan delinquencies and nonperforming loans are low. That points to strength in the industry.”
Banks are in a better spot than they were a year ago, Maher said, and renewed investor interest in the sector has been channeled into a stock rebound. The sector’s trajectory has been in line with the economy overall, he added, which is performing better in 2024 than anticipated.
“So, there’s certainly a sense of optimism from our clients, which we hope is only amplified as we reach the end of the year and the election season and head into 2025,” he said.
