Summer spending at Maine’s hotels and restaurants jumped to a record high in 2021 as the state’s service industry continued to recover from losses incurred in the early months of the coronavirus pandemic.
Home and restaurant sales in Maine reached nearly $2.5 billion between June and September, according to Maine Revenue Services. This summer’s spending was about $1 billion more than the same period in 2020 and a 14 percent increase from the record $2.2 billion set in 2019.
Overall, people spent more than $3.7 billion on restaurants and lodging in Maine in the first nine months of the year, nearly 10 percent more than the same period in 2019 and putting the state on track for a record year.
The influx of tourists to Maine last summer fueled the spending boom. But higher prices resulting from a tight labor market and higher energy and material costs are likely to increase spending as well.
“The increase in tourism to Maine is definitely part of that growth,” said Kelsey Goldsmith, director of communications for Maine Revenue Services. Inflation is also likely to contribute to some extent. Economists across the country believe that both increased volume and rising costs are at play across the country. There is no reliable data yet that would allow economists to derive a mixture between the two.”
Summer visitors returned to Maine this year after the state dropped nearly all public health and travel restrictions that kept many away in 2020. About 10 million people traveled to Maine over the summer, surpassing the record set in 2019, according to research conducted for the Office of Maine Tourism.
Given the strong rebound in tourism, Matt Lewis, CEO of the Hospitality Maine business group, believes it was more spending, not higher prices, that drove sales.
“I think it was very wanted in Maine,” Lewis said. “What we’re hearing from many of our members in many parts of the state is that they’re facing much higher-than-normal business in the fall.”
However, the challenging local job market and the restrictions imposed on international workers have left many shifts vacant. Even if these challenges limited hospitality earnings, last summer was still a positive step for an industry still recovering from the blow it took in 2020 despite state and federal bailouts.
“Hotels and restaurants, like other businesses, have been playing catch-up in the past 18 months — and thankfully they have had busy summers and fall,” Lewis said.
For some business owners, record spending obscures what has been a difficult and stressful period.
Said Gary Dominguez, owner of the York Harbor Inn, a 67-room and two restaurants in York.
The hotel had to shut down two nights a week in the main dining room, three nights in its pub, and even stop serving Sunday brunch for the first time in 40 years. Dominguez said higher home sales helped balance the books, but the hotel lost revenue when it had to close some rooms because it didn’t have enough housekeepers.
“It was crowded, but we didn’t have the infrastructure,” said Dominguez, who relies on foreign students for work each year, but those workers were not available in 2021.
“It’s definitely not perfect by any means,” he said. “The situation is not good and looks even bleaker than looking forward.”
For Elma Lopez and Damien Sansonetti, frequent rainy days at the height of the tourist season have dampened sales at their Portland restaurant, Chaval. The restaurant relied on outdoor seating during the summer and only opened for indoor dining a little over a month ago.
“The summer was wetter and there was a little worse weather than the year before – which I just add on top of everything else,” Sansonetti said.
So far, the restaurant is keeping its own and keeping options open for patrons who prefer to eat inside or Fresh Even with nighttime temperatures dropping below freezing. That’s enough to keep up with rising business costs, Sansonti said.
“Employment has gone up across the board, our (product costs) have gone up, insurance, and taxes — there hasn’t been anything in the last year the stock has gone down,” he said. “Everything tends to the top.”
If this year’s experience is any indication, tourism spending will likely continue to rise next year.
likely to continue
Tiffany Ford, owner of On The Water in Maine, said some of the rental homes her agency manages are fully booked for next year. Her business, which rents mainly in the Midcoast area, has been incredibly crowded for over a year.
“We got a lot of criticism this summer — this has been the biggest year for me of my 16 years,” Ford said. “There were no vacancies from the beginning of June until October.”
Vacation rentals rose this year in an effort to offset some of the losses landlords incurred in 2020. But whatever the price, people were willing to pay it, Ford said. The “heavy hitters” from New York, New Jersey and other parts of New England were comfortable falling back on whatever it cost to rent homes for three to four weeks, not the usual week-long vacations.
“People weren’t negotiating at all,” she said. “They were spending as much as they were and staying longer and spending more money as a result.”