Outlook during a tough economy: Is it summer yet?
Dante Chinni
Posted: 02.13.2009 / 8:31 AM PST
Lincoln City, Ore. – Winters are never easy in this coastal community and vacation destination. The summer tourism season and the dollars it brings are still months away, and the steady diet of rainy days can be tough. But 2009 is extra tough.
The business herd always undergoes some thinning as the weakest local shops find they can’t make it through the cold, gray doldrums. But this year is different, people here say. The names disappearing are surprising: Two popular restaurants have closed for good, along with a larger-than-usual group of others.
“January seemed really slow,” says Allyson Longueira, editor of The News Guard, a weekly Lincoln City paper. “There were hotels with only one car in the lot. And the impact trickles down. When hotels [don’t need people to work as many hours, the workers] don’t spend money around town.”
And that is a lot of people in Lincoln City, which has 3,300 hotel rooms.
The town represents Patchwork Nation’s “Service Worker Centers.” Since we began watching the country last year, “Service Worker Centers” have been taking the biggest economic hits. Our latest Economic Hardship Index showed that yet again.
Hard times close up
The tourism cycle in Lincoln City has a few parts. There is the big summer season, which was slower than usual last year. Then there is the fall season, which was hit when the stock market plunged and people stopped spending money. (But most people here will tell you that September and October are the best months to visit.) And then there is the Christmas season, which was hammered when Oregon was hit by a snowstorm that closed roads to the coast.
Add all that up, and you get Lincoln City in February 2009 – a town that is a bit panicky, Ms. Longueira says. But a good summer could make a big difference and at least get some marginal businesses righted. A bad one, however, might mean serious trouble.
The service economy here is showing other signs of stress. Last year, revenues collected from city taxes on visitors staying in hotel rooms dipped slightly, says Mayor Lori Hollingsworth. While that was about a 3 percent drop, tax revenues from new construction fell off a cliff – dropping by about 25 percent.
Meanwhile, more and more foreclosure properties are popping up in the newspaper classifieds here. And some people who bought second homes on the coast can no longer make their mortgage payments. Both developments mean a drop in property-tax revenue as well.
That’s not all. In this community, few have health insurance. But recently, there was an announcement that the free health clinic would scale back service to only one day a week – and take no new patients, says Colleen Hickey of Samaritan North Lincoln Hospital. Last year at this time, the clinic operated five days a week.
The emergency room at Samaritan is now bracing for a rush in the coming weeks.
The bigger picture
None of this is to say that Lincoln City is on its last legs. Some residents here are quite hopeful that just getting through the winter will lead to a better summer season, as people cut back on big trips to far-flung destinations and opt for smaller, closer staycations.
It’s also not to say that “as goes Lincoln City, so goes the United States.” For one thing, not every town leaves hand-blown glass balls for people to find on the beach, as they do here. On the other hand, this community shares a lot of common traits with other small towns, particularly resort communities.
Indeed, the troubles that Lincoln City is experiencing – rising unemployment, falling city revenues, a healthcare crisis – are probably being experienced in other towns like it. We will be watching Lincoln City closely in the coming weeks and months to see what it can tell us.
