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Shore will see record tourism season, by Michael Busler

Shore will see record tourism season, by Michael Busler

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After a year when most of the seasonal businesses where operating at far less than full capacity, Jersey Shore businesses are gearing up for what looks to be a record setting summer season. Total spending for the 2021 season will be way above last year’s depressed numbers. In fact spending will probably be 8% to 10% higher than 2019.

There are a couple of assumptions. The first is that the businesses can reopen fully by Memorial Day or shortly thereafter. With a third of the U.S. population fully vaccinated and about half receiving at least one vaccine dose, we are approaching herd immunity. So opening fully may be possible before June1.

The second assumption is the weather. If we assume an average season when at least 10 of 13 weekends are sunny and inviting, the crowds will flock to the beaches.

Americans are loaded with cash. For a family of four earning less than $150,000 annually, the government gave them more than $11,000 of free money whether they were negatively impacted financially by the virus or not. Much of that money has been saved, so consumers are ready to spend.

Consumers are also ready to be outdoors and mingle with other people. The beach is always an inviting place to do that, which will attract these large crowds. Most small, seasonal businesses will be amazed at how many people are patronizing their establishments.

Many small business people will say things like, “Where did all of these people come from?” Or “I have never seen anything like this in all of the years I have been open. We can’t keep up with all of the business we have.”

Of all of the problems to have in business, the most desirable problem is “too much business.”

There will be other problems however. Shortages of supplies may be an issue. That could limit the increase in sales for a company.

Finding an adequate labor supply will be tough. Many previously employed workers are finding that with the combination of unemployment compensation and additional federal government assistance, they are earning as much or more than they would earn if they worked. So many are not returning to work.

Legally, of course, if they are called back they must return or lose their benefits. Really though, many find ways to remain unemployed and still keep their benefits. The hope is that enough seasonal workers, mostly college students, will be available to meet the labor demand, but that is not known.

One thing that won’t be an issue is the minimum wage. It was raised to $12 per hour this year. That usually means fewer jobs available. But with the huge increase in business activity, and the shortage of workers, market wages are rising. Since many businesses are offering up to $15 per hour, the higher minimum wage is meaningless.

Somewhat surprising is the number of businesses that were able to survive last year. Mostly due to the ingenious solutions that entrepreneurs came up, most businesses survived. Restaurants, for instance, geared up delivery service and also put diners out on the sidewalk since the number allowed indoors was restricted.

Businesses also found surprising strength in the shoulder season. Typically after Labor Day business falls off dramatically, forcing many establishments to close until spring of the following year. But the trend toward year-round people purchasing homes resulted in a fall season that was much stronger than usual.

Fortunately the year-round population will continue to increase as many former city dwellers are now able to work remotely. Couple that with the soaring crime rates in cities like New York and Philadelphia, and many people are making the Jersey Shore their permanent residence.

This huge increase in demand has pushed home prices up significantly. All along the Jersey Shore double digit percentage price increases are common. This is likely to continue for some time before prices stabilize.

After a disastrous year for local businesses, this season will be a boom for them. Volume will be way up, although their costs will increase significantly and they will be facing labor shortages and supply shortages.

But as long as the sun is shining, the business community will be very happy.

Michael Busler, of Ventnor, is a professor of finance at Stockton University.

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