Maine’s tourism industry on life-support as visitors trickle back

There are signs that conditions for Maine’s mammoth tourism industry improved over the past month, but many businesses remain on life support coming into the second half of the critical summer season.

Out-of-state traffic on the Maine Turnpike has jumped and hotel occupancy has grown substantially over the past month.

“Business has definitely picked up, there are more people here, it’s steadily increased since July 4 weekend,” said Alf Anderson, executive director of the Bar Harbor Chamber of Commerce.

But testing and quarantine requirements for many visitors, including those from Massachusetts, are still keeping tourist traffic down, and the overall suppressed demand means business in Maine’s tourism epicenters is anything but normal.

Anderson is more optimistic than he was in the early days of the COVID-19 pandemic, when it wasn’t clear whether there would even be a tourist season. His concern now is that local hotels, restaurants, shops and tour operators earn enough this summer to make it through to next year.

“The whole season is going to be a significant drop-off compared to where they need to be,” he said. “Everyone is hanging in there and looking ahead to better days.”

Maine reopened its tourism economy almost two months ago, but a requirement that most out-of-state visitors quarantine for 14 days or provide proof of a negative COVID-19 test within 72 hours before arriving, intended to protect the health and safety of guests and residents, have made it difficult to attract tourists.

Shoppers peruse items on the sidewalk in York in June. Normally bustling summer Maine communities feel empty this year. Brianna Soukup/Staff Photographer

Bookings at lodging businesses appear to have rebounded somewhat after the government allowed people from New York, New Jersey and Connecticut to visit without testing or quarantine in early July.

In mid-June, Maine hotels were at about 28 percent capacity, according to STR, a hospitality benchmarking data company. Since the beginning of July, occupancy has grown weekly, to about 45 percent in the third week of the month.

The national average is 47 percent, and Maine lags behind New Hampshire and Rhode Island, which have occupancy rates around 50 percent.

While more overnight visitors are coming compared to a month ago, Maine hotels are still almost 50 percent below last year’s occupancy rate, and nearly two-thirds less on revenue per room, according to STR.

Tax revenues from the hospitality industry are sharply down as well, according to a report by the Legislature’s Revenue Forecasting Committee released Wednesday.

Between April and June, lodging sales tax receipts were down 70 percent compared to 2019. Prepared food, or restaurant, sales tax receipts were down 43 percent for the same period.

Other tourism-dependent businesses are struggling, too.

“We’re surviving so far, it is unlike any other summer we’ve experienced,” said Brian Powell, owner of Dock Square Clothiers, a clothing store with locations in Kennebunkport and Ogunquit.

Normally-bustling summer communities feel empty, but Powell feels better about the future now than he did when he had to shut down this spring for several weeks. What happens next is uncertain, however. Cruise ship and bus tour passengers, which are critical customers in autumn, won’t be around this year, he said.

“This is an uphill battle for millions of people,” Powell said. “What choice do we have now, we are in the game and we have to go for it.”

Many tourism businesses are in the same position, said Dan Innis, a hospitality professor at the University of New Hampshire and former dean of the business school at the University of Maine. With a raging pandemic, people are still wary of traveling, going out to eat and participating in other tourist activities.

“I think it is going to be a really slow, slow season,” Innis said. “There is still an awful lot of uncertainty.”

Maine has the benefit of lots of open space and offers outdoor activities that are attractive to people who want to avoid crowds and heavily populated areas, he added. But testing and quarantine requirements also make it seem unwelcoming, Innis said.

Maine has so far managed to keep COVID-19 in check, and other states including New York and New Jersey have also adopted quarantine requirements for many out-of-state visitors.

Maine Republicans this week released a tourism plan that would exempt visitors from Massachusetts and Rhode Island from testing or quarantine mandates, and add states with positive COVID-19 test rates under 5 percent to the exempt list. They also recommended increasing limits on indoor and outdoor gatherings from 50 to 150 people.

Mark Sipple stands behind a glass divider as he checks in a guest at the front desk at Cliff House Maine in Cape Neddick in June. With a raging pandemic, people are still wary of traveling, going out to eat and participating in other tourist activities. Brianna Soukup/Staff Photographer

The Republican proposal was immediately denounced by Gov. Janet Mills, who called it a “Donald Trump-style assault on the very public health measures that have successfully protected Maine people.”

However, the Maine Department of Economic and Community Development announced Wednesday that caps on large outdoor gatherings will be increased to 100 people starting Saturday, although the 50-person limit for indoor events will remain in place.

The Maine Office of Tourism last week unveiled a $2.4 million marketing plan that emphasizes Maine’s outdoor amenities and safety. The plan boosts advertising in states exempt from travel restrictions.

Out-of-state visitors are clearly coming to Maine, quarantine or not. Through July 28, almost 822,000 EZ Pass transactions from Massachusetts vehicles were logged by the Maine Turnpike Authority. That was roughly 259,000 more transactions than in June, but about 23 percent below last year. Transactions include commercial and passenger vehicles.

Tourists may be coming, but may not be staying in hotels and inns, or spending too much time eating in restaurants and shopping in scenic downtowns.

Tiffany Ford, who owns On the Water in Maine vacation rentals, said her properties filled up quickly after restrictions were lifted on some states in July. The 125 properties, most in midcoast Maine, that her company manages are nearly booked solid through August.

But most of those guests seem to be staying in place when they come, Ford said. There is more trash and recycling at the properties than she ever remembers and towns such as Camden have empty downtowns compared to a normal year.

“They don’t care about having to quarantine in a nice vacation rental, they are on a beach or the shore,” she said. “They bring all their food and drinks for the week and are fine quarantining at the house.”