In Tourist Town, Memorial Day Travel Kicks Off Test of Summer Economy

BY Carolyn O'Hara  June 1, 2010 at 4:33 PM EST

Memorial Day, the unofficial kickoff of summer, means something more than just warmer temperatures and the coming end of the school year in some places. It is about turning five months of red ink to black.

For vacation towns based around boardwalks, beaches and marinas, Memorial Day weekend is often considered a preview of — or at least a head start on — summer, when the tourists arrive to fill the restaurants and curio shops and spend the money that makes it possible to stay in business.

A lot of those places fall into Patchwork Nation‘s Service Worker Center category, small, largely rural commerce centers. And many of them, a day’s drive from big metro areas, take the first hit from the belt-tightening that happens in those big cities.

We saw this distinctly in Lincoln City, Ore., a Service Worker tourism hub on the Pacific Coast that sensed big economic problems in 2008 when the first few nice weekends that year didn’t bring as many of the usual Portland and Salem crowd as they expected.

This Memorial Day in Lincoln City offered at least some good news. While there won’t be any hard, fast tally for weeks, people there reported a slightly better three-day weekend in 2010 than in 2009 — though trouble signs remain.

Define ‘A Good Weekend’

Kip Ward, who runs the Historic Anchor Inn, says his inn actually had a nice busy weekend.

“We are doing much better than last year, but remember for us there are different factors at play,” he writes in an e-mail. “When you have very poor business it is relatively easy to post big percentage gains from year to year. Plus, we are in the process of ‘being discovered’ lots of word of mouth etc.”

On the whole he says the hotel managers and staffers he talks to around town report a mixed bag – some up a bit, some down a bit. Still, again, this would seem to be an improvement this year.

Lincoln City Mayor Lori Hollingsworth says the weekend seemed “very busy.” And Allyson Longueira, editor of the local weekly newspaper the News Guard, said the local outlet mall was very crowded. “It has been relatively recession-proof, and the rainy weekend would certainly help with traffic flow to the mall,” she writes in an e-mail.

The relatively upbeat news from the Oregon Coast matched what was forecast nationally. Before the weekend, AAA had estimated some 32 million Americans would travel for the holiday – up 5 percent from 2009. Lower gas prices were cited as a reason.

And if you are looking for harbingers of a growing economic recovery, that’s not a bad sign to point to. Memorial Day trips to places like Lincoln City can be seen as a kind of canary in the coal mine of the American economy. It means people are feeling a little freer with their disposable income.

A Bigger Change

But the other side to that good news story is the larger change that is accompanying it: AAA also forecast that people seem to be spending less.

Ward says he’s been seeing signs of that more frugal attitude around Lincoln City. “Generally around town I saw plenty of vacancy signs on Friday and even some on Saturday. This is troubling. In years past there would never be a vacancy on those days,” he writes. “What I see as clear as can be is that there is a lot of downward pressure upon prices. Now like gas stations, many of the hotels have their prices posted to the street.”

For Ward and his Anchor Inn, which specialize in low rates with lots of extras, that’s not a terrible thing, but for some of the bigger inns, it means trouble.

Ward noted that the Sea Gypsy, just up the road from him on Highway 101, was “folding up tent.” “This is (was) a very large oceanfront facility that has operated successfully for the last 40 years or so. But their formula no longer works.”

Repeated calls to the Sea Gypsy went unanswered and the “reservations” and “weekly/monthly specials” links on the property’s site do not work.

No one expects the economy to suddenly turn around, of course. And the effects of the economic downturn were bound to persist somewhat. But the real question for Lincoln City and places like it is are they in a temporary moment when things are bouncing back or are they experiencing a new normal.

The receipts from this 2010 summer season will ultimately tell some of that story, but for the moment, Lincoln City will take more foot traffic over the last three days as a hopeful sign at least.