Tourism economy

Ever since Sept. 11, 2001, it’s been assumed that the economy is in recession, and that local businesses are suffering.

But a closer look at the 2003 summer season suggests a far more complex story, with lots of good news but also some bad news in most sectors of the local economy.

Ferry ridership during July 2003 was virtually the same as last year. (Figures for August will be available during the second week of September, according to Washington State Ferries Planning Director Ray Deardorf.) The numbers have been a pleasant surprise to ferry officials who expected a decline in ridership after fares went up again this year, Deardorf said.

Kenmore Air reports “very positive” numbers for the summer. The float plane service which flies between Seattle and the San Juans is up 15 to 20 percent, said Director of Marketing Craig Sternagel, who admitted that the warm, sunny weather certainly helped.

And the county’s unemployment rate, unlike that for much of the rest of Washington State, is actually down from a year ago. The Washington State Employment Security Department reports that 220 people, or 2.7 percent of the working population, were unemployed in San Juan County during July 2003. That compares to 240 people, or 3.1 percent, for the same month of 2002. The county’s total labor force this year is 8,030, compared to 7,860 a year ago.

Occupancy at vacation rentals and local lodges has been booming during August. Rosario Resort reported “very positive” numbers this month, and new General Manager Steve Rose said the resort is “guardedly optimistic” about occupancy during September and October. But Rose also noted that group and corporate business, the traditional mainstays of the off-season economy, “seems to be soft.” This is not merely Rosario’s problem. Every resort is being hurt because, whenever there is a soft economy, corporations cut employee travel and retreats, Rose said.

The Outlook Inn also reported improved numbers this summer, but owner Adam Farish is finding that the clientele has changed. “There is more family business, but fewer singles and couples,” Adam Farish said. And while that’s good news for the restaurant, the bar business is down.

Nevertheless, Farish isn’t entirely sorry to see fewer people in the bar. “It’s OK by me,” he said.

Another who reports increased occupancy is Karen Speck, whose business is vacation rentals. “We’re up 8 to 12 percent (from last year),” said Speck, a broker with Cherie L. Lindholm Real Estate. Speck, who agrees with Farish that most tourists now coming to the islands are families with children, believes price is what attracts them to vacation rentals. She said the average price for the 50 vacation homes managed by her real estate firm is $1000 a week. But since some of the homes can hold as many as 12 people, the price per family can be very affordable, she said.

But Speck also noted that tourists are cutting their vacations shorter than in past years, when many stayed for two or three weeks. Nowadays, most are limiting their stays to one week, she said.

Another who believes tht tourists have become increasingly price conscious is Orcas Chamber of Commerce President Michael Rivkin. Rivkin speaks both from his own personal experience at the pottery shop, and from discussions with fellow merchants. “What I hear and experience is a lot more price sensitivity,” he said. “We’re selling more lower ticket items,” continued Michael Rivkin. But Rivkin feels that this summer’s reports about tourism need to be put in a historic context. Last year was Crow Valley Pottery’s best year ever, he said. “We felt it couldn’t last,” he said, “but this year is not horrible.”

Nobody has felt the pressure to lower prices more than Raymond Schwartz, owner of Eastsound Sporting Goods. “More people are on the island,” he said, “but everybody wants a discount.” He described the scene as “like a big garage sale and a third world country, with everybody bargaining on the beach.”

Business is up at Bilbo’s Festivo, and co-owner Julie Fraser believes that price has a lot to do with it. Lunches have done especially well -- they’re up 17 percent from a year ago. “Our average ticket is $10,” Fraser said, for an entree, chips and a beverage.

Belinda Landon, of Vern’s Bayside Restaurant & Lounge, agrees that tourists are increasingly price conscious. “They read the menu before they come in the door,” she said. And what’s selling the most? “Burgers and fish and chips,” Landon added.

San Juan County sales tax figures for the summer, one of the best indicators of the strength of the tourism economy, won’t be available until around October, county Auditor Si Stephens said. But Stephens, a Certified Public Accountant, said he has been told by his customers that, after a slow spring and a so-so June and July, August has been booming.

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