Last Wednesday’s “Jersey Shoreview” panel at Stockton University in Atlantic City provided a mixed review of the crucial summer season of 2022.
“The volume was definitely there,” said Jim Ziereis, vice president of hotel sales for Caesars Entertainment’s three casinos in Atlantic City. “We were absolutely packed. What we did see, however, was the tightening of the wallet. … Inflation was real. The gas prices were real. So the spend was not as much as we anticipated.”
Anthony Catanoso, who owns the Steel Pier family attraction on the fabled Boardwalk, echoed those comments.
“We saw the volume — we didn’t see the spend,” Catanoso said. “The interesting part was our more expensive, higher-end attractions, like the helicopter rides, were up. And we had a record Fourth of July. So it was very sporadic, but overall, down a little bit. But we weren’t disappointed.”
The price wasn’t always right
Michael Busler, a Stockton professor of business studies and finance, reported what he heard from local business owners.
“Fortunately, the weather this past summer was excellent,” Busler said. “We had great weekends with plenty of sunshine and high temperatures, which drives everybody to the shore. The small business people that I’ve talked to tell me that their revenue is about 5 percent to 10 percent higher in 2022 than it was in 2019.
“Now that’s good — except that prices were at least 10 percent higher in 2022 than back in 2019. So, in real terms, adjusting for inflation, their numbers were not quite as good as they appeared.”
Ziereis said the Caesars properties exceeded pre-pandemic numbers, thanks in part to the NAACP convention held in the city in mid-July.
“That event took over the city and had a really positive impact,” he reported.
Catanoso said Steel Pier revenue also exceeded pre-pandemic levels, adding, “We had to do a price increase, because the cost of goods has gone up.”
Busler, the professor, said: “The business people I talked to told me that their costs were rising a lot more than they could pass along to consumers. Some even started charging a fee for using a credit card, 3 percent or 4 percent, looking for ways to try to get their revenue to cover their cost increases. Consumers were not too resistant to that.
“Many people told me that they, too, had trouble getting materials. The restaurants told me they had to take some items off the menu because they simply couldn’t get the food that they needed. So the inflation problem, I think, was a serious one.”
Jobs available exceeded supply of workers
There was a shortage of about 600 housekeepers in the entire city collectively, Ziereis said, “and that prevents you from selling out 100 percent every night. And you’re doing a lot of overtime at that point, too. So you know, it’s very tough on the workforce.”
Busler said: “Most of the small business people I talked to told me they never got up to the full capacity in terms of staffing. They were paying much more than they expected to pay, and they were hiring younger people.
“I think this labor problem is going to continue into next year, even if the economy slows down, and if it goes into recession, I still think the labor issue is going to be a problem going forward.”
Catanoso said that even if he could find workers, “housing is a big issue. Before, we didn’t have to worry about it. Now we do. There’s a big shortage in Atlantic City. We had to get into the business of finding housing for them, which is very difficult.”
“I’m a little nervous about the ‘shoulder season’ this year,” Busler said. “Typically, the shoulder seasons have been expanding, and they’ve been doing very well. But consumers are getting squeezed. Inflation is 8-9 percent, and unfortunately, it’s going to get a little worse going into the fall. People are spending more on necessities. That gives them less discretionary income.”
Busler added that research showed that the number of cars going through the Atlantic City Expressway toll plaza was down in July and August.
“So that leads you to believe that some of these higher gas prices may have had some of an impact on travel, especially with day trippers,” he said.
Forward-thinking thoughts
Ziereis, who said he is “a big Phish fan,” was pleased that the band visited for three summer nights.
“But Friday and Saturday in July, we are maxed,” Ziereis said. “Everybody is. If those beach concerts could be midweek, this city would thrive. It would make such a difference, because you’re going to have a great Friday, Saturday in July, anyhow.”
A $100 million water park at the shuttered Showboat casino property is scheduled to open in spring 2023. Catanoso sees it more as an opportunity than a competitive threat to his Steel Pier.
“The development that’s happening at Showboat, specifically the water park, is critical for Atlantic City because it creates a more critical mass of family entertainment that I think, complements the whole casino experience,” Catanoso said.
“The city needs more of it. I think it increases the market. I think the pie grows. I don’t think we are dicing it up. I think it grows with every new attraction that comes in.”
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