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Candy Collins-Boden, executive director of the Provincetown Chamber of Commerce. |
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The sky is not falling
By Pru Sowers
Banner Staff
PROVINCETOWN — If you look at the specifics, the tourism industry here — which fuels just about everything, from the majority of jobs to the tax rate to the price of real estate — appears to be in serious trouble.
The young gay tourist who previously powered the local vacation season has abandoned Provincetown, taking advantage of a more tolerant political climate that has created alternative gay vacation destinations. The conversion of guesthouses and motels to condominiums has made it so expensive to stay here that families have fled, turning into “day-trippers,” who reportedly do not spend much time or money in town.
Commercial rents are so high they’re discouraging start-up businesses from opening here. The national economy is falling while gas prices are soaring. And foreign workers, the enabling backbone of the summer season, won’t be allowed to return this summer.
Based on all this, Provincetown business owners should be holding their heads in their hands, afraid to put out their “open” signs and invest in inventory that, by all accounts, will stay in the storeroom collecting dust.
So why did the town have a terrific summer season last year as well as a strong fall “shoulder season,” and why are early indications for this summer even more promising? Why are so many experienced business owners and managers willing to invest in Provincetown right now? And why are room tax revenues up about 10 percent so far in fiscal year 2008, a sure sign there were more visitors staying in town than the same period the year before?
In other words, if the sky isn’t falling on the local economy, to misquote Chicken Little, what is going on?
An evolution
Based on extensive interviews with local business owners and tourism officials, it appears a quiet evolution has been taking place in the Provincetown business community over the past few years. While young gay tourists have indeed left, they have been replaced by an older gay visitor with more disposable income who is willing to spend it on lodging, food, art and high-end retail stores. The number of second homeowners who purchased those converted condominiums has risen to over 50 percent of the local property owners. But, again, they appear to be relatively affluent people willing to spend money locally on the things they need, such as high-end home furnishings. And while families may have been turned into day-trippers, they’re pushing expensive strollers and buying $4 cups of coffee.
Business owners noticed the shift in visitors before any of the demographic studies confirmed this transformation. Rather than wait for the survey research, owners took steps to meet the changing nature of Provincetown’s visitor base. And according to several accounts, the shift is working well for those who recognized it and spent time researching the services and products the new visitor base wants.
“The trend has been towards businesses becoming more high end — sophisticated coffee shops, high-end furniture and home decoration stuff. T-shirt shops and novelty stores aren’t as plentiful as they used to be,” said Lynne Davies, a Provincetown selectman and co-owner of Provincetown Soap Works, a local company producing soap, bath and body products.
“We used to have 20 T-shirt shops and six or seven cotton candy stores. It’s a different, more sophisticated group that comes here now,” said Candy Collins-Boden, executive director of the Provincetown Chamber of Commerce.
“Look at how many spas there are. Ten years ago they weren’t here. There are opportunities. You’ve got to adapt your business to the changes,” said Steve Tait, president of the Provincetown Business Guild.
2008 looks positive
While Provincetown and all of Cape Cod’s resort towns are still largely dependent on the mercurial weather for a successful summer season, early indications for 2008 are extremely positive. Robert O’Malley, owner of Beachfront Realty, which manages several rental properties, said his summer vacation bookings are currently 25-30 percent higher than they were at this time last year. Gary Delius, co-owner of Coral Gables guesthouse, said his 2008 advance bookings are also significantly ahead of last year.
Looking beyond this summer, long-term investment in Provincetown appears robust and also aimed at capturing an affluent clientele. The owners of Crowne Pointe, an elegant, high-end inn and spa, recently purchased the equally elegant and high-end Brass Key Guesthouse across the street. A new tapas bar is replacing the former Beach Grill. The owners of the Lotus Guest House are completely gutting their inn to upgrade the rooms with gas fireplaces, flat screen TVs and upscale baths (see related story page 10). And Newburyport developer Chuck Lagasse seems on target to buy Fisherman’s Wharf, reportedly planning to expand the recreational marina by 350 boat slips.
“I think the businesses have adapted. Retail has upgraded so much in the last 10 to 15 years,” Collins-Boden said. “We have restaurants, all different kinds of food here. Entertainment has changed a lot. We used to have 15 drag shows. Now we have theater, music. I think the businesses have been aware and smart.”
Not all is rosy
To be sure, there are challenges, some particularly difficult. The anticipated labor shortage this summer (see related story page 11) is real. High commercial rents are keeping entry-level entrepreneurs away (see related story page 11). A weak national economy could discourage vacationers. And tight municipal finances are keeping the town from doing tourist-friendly things like repaving Commercial Street, paying for extra trash pick-up in the busy summer months and replanting flowers and trees.
Then there is the issue of competition. With affluent homeowners and vacationers bringing wealth into Provincetown, non-local businesses are sniffing around, looking to grab a piece of the new money. In addition, wealthy homeowners either building or renovating their second homes in Provincetown are willing to bring in off-Cape builders they have worked with before.
“The trend I started noticing about a year ago was big money coming into Provincetown,” said Peter Page, owner of East Harbor Construction in Provincetown. “And they’re bringing in outside general contractors. They don’t want to hire local carpenters. They have their own.”
To combat the impression that local builders can’t provide the same level of quality and service as larger contractors, Page has banded together with two other local service providers, Carlos Silva, a local electrician, and Provincetown Woodworks, to present a more polished and professional image. The trio is working together to present themselves as a full service, one-stop construction shop, Page said.
This trend towards capturing the attention and dollars of a more prosperous visitor and homeowner base was statistically confirmed last year. An extensive economic study of the overall conditions and trends in the town’s economy released last May found that as a whole, the town economy appeared stable and the tourism industry was shifting towards an older and wealthier demographic, according to Peter Kwass, principal of Mt. Auburn Associates, the research firm that did the study.
“The tourism industry is transitioning and there are a lot of changes in Provincetown. Some businesses get hurt and some do better. The people who do better don’t talk about it as much as the people getting hurt,” Kwass said. “We just didn’t see any real evidence of overall economic distress in the community.”
psowers@provincetownbanner.com
This is the first in a multi-part series examining myths and truths surrounding the current business climate in Provincetown, leading up to the March 18 business summit. For related stories on foreign workers, commercial rents and what one inn is doing to adapt, see the March 6 Provincetown Banner. Next week, the Banner profile several business owners making significant investments in town.
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Mar 6th, 2008