Meals and lodging sales post big increases in August

October 13, 2012 in Articles

Author: Whit Richardson
Publication: Bangor Daily News
AUGUSTA — After a worrying July, August’s taxable sales figures in tourism-related sectors beat projections and capped a strong summer tourism season, according to figures released Friday by Maine Revenue Services.
Lodging sales in August were $157 million, up 7.5 percent from the same month last year, while August restaurant sales equaled nearly $270 million, representing a 6.1-percent year-over-year increase. For the three-month period from June to August, lodging sales were up 7.4 percent and restaurant sales were up 5.3 percent compared to the same three-month period in 2011.

“Those are good solid numbers,” Michael Allen, associate commissioner for tax policy at Maine Revenue Services, told the Bangor Daily News.

Greg Dugal, executive director of the Maine Innkeepers Association who had guessed the August lodging sales figures were going to be around 4 percent year-over-year increase, expressed excitement when he heard the real figures.

“That’s great news,” he said. “You made my day.”

The numbers were a bit of a relief because Allen and Dugal both admitted there was some worry going into August that the season was going to flop, mostly because July had been disappointing.

“We took a little bit of a beating in July,” Dugal said, adding that July’s weak performance was blamed on the Fourth of July holiday falling in the middle of the week.

“I think we were all getting a little nervous that August’s numbers would not rebound,” Allen said. “But despite the energy prices they rebounded.”

Vaugh Stinson, CEO of the Maine Tourism Association, was more reserved in his assessment of the summer tourism season.

“I would say the season has been fair,” he said, adding that he doesn’t think visitors are staying as long or spending as much as hoped.

Stinson wants to see Maine’s meals and lodging sales tax revenue for the year up at least 4 percentage points over 2011, but judging by the summertime numbers, Stinson doesn’t believe it will reach that threshold for 2012.

But he’s not dismissing the summer results either. “I’m not complaining about the meal with my mouth full,” he said. “Overall we’ll come out ahead, and I think in this economy, to be ahead is pretty important.”

Maine’s tourism industry, which generates approximately $430 million a year in tax revenue for the state, had a few good things going for it this summer, as well as one factor working against it.

The good factors were the weather and a strong Canadian dollar.

Curtis Picard, executive director of the Maine Merchants Association, heard anecdotes from some of Maine’s retail hotspots — Kittery, South Portland, Freeport, Portland, Bangor and Bar Harbor — that “the Canadians were down in big numbers.”

In August, consumer sales equaled nearly $1.6 billion, a 4 percent increase from August 2011. “That’s a good jump,” Picard said.

Another factor that could have affected the influx of Canadian tourists this summer was a decision in March by the Canadian government to increase the duty-free customs allowances for Canadians bringing goods back into the country, Picard said.

Before this summer, a Canadian tourist who stayed in Maine more than 24 hours would have been able to return with $50 worth of goods duty free, and a tourist spending more than 48 hours would have been able to return with $400 worth of goods duty free. But the changes, which went into effect June 1, mean the Canadian tourist spending more than 24 hours in Maine could return with $200 worth of goods duty free, while the tourist spending more than 48 hours could return with $800 worth of goods duty free, according to Duty Free Canada.

“That ends up benefiting us because they’re able to purchase things here tax free,” said Picard. Which in turn “contributed to the number of Canadians down here shopping.”

The one factor that likely dampened the summer tourism season was gas prices increasing toward $4 a gallon, Stinson said.

The high gas prices weren’t keeping people off the road. The Maine Turnpike Authority reports that in August traffic for passenger cars increased 4.4 percent over the same month last year.

But it’s not just high gas prices relative to a vacation that affects a potential tourist’s decision to drive to Maine or not, Stinson warned. It’s all the energy costs a person deals with at home that affect their spending decisions, whether it’s rising costs of home heating oil or the gas they need to make their daily commute.

“The fact of the matter is they don’t have to have a vacation,” Stinson said. “They do have to pay their bills and do those other things. So when that thought process begins, it makes our job more challenging.”

There’s at least one sign that could mean a good tourism bump in the future.

The Maine Office of Tourism printed 300,000 of its free-upon-request travel guides this year, but ran out and had to print an additional 20,000, Stinson said.

“So the demand for material on Maine as a vacation destination is huge and growing,” he said. “We’re hoping that’s a harbinger of things to come … as people plan their vacations for 2013.”




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