Occupancy Tax Trends Upward in Positive Sign for County Tourism

The early returns on visitation have been trending positively for the Cape May County tourism industry. The latest data from the New Jersey Treasury indicates Occupancy Tax collection was up double digits every month during the first two quarters in 2023 over 2022. This includes a more than 70 percent spike in the first quarter over the same period in 2022. The Cape May County Department of Tourism has made a concerted effort to bolster fall and winter marketing over the past five years and the county is seeing success with continued growth in both fall of 2022 and winter of 2023, according to a county news release. The July 2023 Occupancy Tax collection reached $5.289 million, a 12 percent increase over the July 2022 rate. Cape May County outpaced all other counties in New Jersey in Occupancy Tax Collection for July and is trending to surpass the 2022 total of $19.4 million, the release stated. Cape May County Board of Commissioners Director Leonard Desiderio praised the county’s Tourism Department for its hard work year-round to boost the county’s tourism industry. He said the positive results are reflected “in the numbers.” "Tourism marketing is an ever-evolving challenge, requiring preparation, research-driven strategies, and the flexibility to adapt our marketing efforts to meet the changing environment. Every year brings new challenges to the tourism industry. Growth during these uncertain times doesn’t just happen on its own,” said Desiderio, who is also the mayor of Sea Isle City. Occupancy Tax is collected by the State on all hotel and motel stays and is typically 5 percent of the room rate. While the data doesn’t specifically forecast visitation, it provides a year-over-year benchmark and measures overnight stays.  Increasing Occupancy Tax is correlated with increasing visitation. The average overnight visitor spends $374 per person, per day. The percentage increase in collection from this year versus last year through the first six months was 22.1 percent, which is just slightly off the 25.5 percent increase experienced in 2022 over 2021 during the same period, according to the release. “Cape May County continues to experience significant growth in the fall and winter seasons. The first quarter of this year produced three times as much Occupancy Tax as the same months in 2019, which was the last full year prior to COVID,” said Diane Wieland, director of Tourism for Cape May County. Wieland noted that the numbers are influenced in part due to inflation, but are also impacted by significant growth in shoulder season visitation. Last year’s growth in tax collection was a leading indicator of visitation growth. The county marked a record 11.38 million visitors last year, an 8.8 percent growth over 2022, according to year-end data provided by the New Jersey Division of Travel and Tourism. “Occupancy Tax data suggest positive signs for 2023 and while encouraging, we will get a clearer picture when more data becomes available, Wieland said. “Inflation has impacted core costs for families and in turn has forced many to cancel or shorten their vacation and with that vacation spending has been adjusted. Reports from many businesses are indicating that 2023 will not prove to be as robust as the past two years.”