PROVINCETOWN — The tourism industry brings about $200 million into Provincetown every year, according to Tony Fuccillo, Provincetown’s director of tourism. It’s an enormous economic engine that touches nearly everyone in town, regardless of occupation, and with most of the 2019 season in the rearview mirror, it’s common to try to assess how well the season went.
The short answer: we don’t know yet.
Because of the way the state handles tax revenue, there will be no information on the most important quarter of the year — the one that includes August, September, and October — until December 30. Aggregate numbers for sales tax, meals tax, and rooms tax receipts capture entire sectors of the economy more accurately than the rising or falling fortunes of an individual enterprise, and these aggregate data is mostly not available yet.
“The state of Massachusetts allows localities to add ‘local-option’ taxes that are separate from the statewide sales tax,” Fuccillo explained. “Provincetown’s local-option meals tax and rooms tax means that the state keeps a separate tally of these two sectors for us, and then rebates that tax money back to the town at the end of each quarter.”
That money goes to a variety of municipal funds, but along the way it offers an accurate snapshot of what was sold in town and when. These numbers consistently show that the August-October quarter is Provincetown’s most profitable. In 2018, that quarter accounted for 44 percent of the entire year’s restaurant sales, and 47 percent of its lodging receipts. The May-July quarter is close behind, with the other six months of the year contributing only 10 percent of lodging revenue and 12 percent of meals receipts.
Restaurant revenue has been going up consistently by about 2 to 7 percent a year for the last six years, according to the data. Lodging revenue has been going up as well, but with more bumpiness — some years have seen big gains, while others have been flat or even negative.
This year got off to a good start, at least. For the six months from February to July, restaurant sales were up about 5 percent over the same period in 2018. Lodging revenue was up as well, but those numbers are harder to compare because of the introduction of the short-term rental tax on July 1.
“The tax on short-term rentals went into effect for the month of July,” said Fuccillo. “That tax money is being rolled in with the existing room tax that the licensed lodgings had already been paying. They’re paying the same tax now, and the state is reporting it to us in one big bundle. We’re gonna ask the Dept of Revenue if they can split out the numbers for us, so we could give you numbers for short-term rentals specifically, but right now we don’t have that.”
In the absence of tax data, there are other measures that can be used to infer how tourism is doing — but for a variety of reasons, most of them aren’t especially reliable this year. Parking revenue is often cited, but according to Provincetown Finance Director Joseé Young, “That’s not going to be a good one to use this year. Both the prices and the rules around parking changed over the winter, and you’re not going to get a valid year-over-year comparison.”
The Cape Cod National Seashore keeps parking and traffic data for Herring Cove and Race Point, but the reconstruction of the Herring Cove parking lot wasn’t completed until July 2019, which threw off all the historical patterns.
“This is going to surprise you, but we don’t actually charge the tour buses anything, which means we don’t actually count them at all,” said Eric Sussman, the town’s emergency manager and transportation coordinator.
Ferry traffic, meanwhile, is exceptionally well documented — Coast Guard manifests and embarkation fees document precise numbers. The total number of passengers arriving by ferry has more than doubled in just three years: in 2016 there were just over 120,000 passengers, according to the Pier Corp.’s annual report, and in 2019 there have been 259,000. This is a staggeringly large increase for such a short period, and the town’s overall tourist economy has gone up by only 5 to 8 percent in the same period, making it somewhat unclear how exactly an increase in ferry ridership translates to the broader economy. (A good year for ferries doesn’t appear to hurt though: 2017 saw a big increase in ferry ridership, and was a great year for lodgings and a solid one for restaurants; 2019 was also a good year for ferries, which could be a good sign for the rest of town.)
Water usage is another indicator that at least has precise numbers behind it. The tourism dept. has water usage broken down by month, including for the August-October quarter of 2019. Water usage doesn’t correlate particularly well to the broader economy, however; 2017 was a good year for lodgings and for restaurants, but water usage went down that year by 2.5 percent. And 2018 was a lousy year for lodgings and a pretty bad one for restaurants, yet water usage went up 4 percent. Water usage in 2019 has been up 2.4 percent so far, but historic data suggest that this figure is an unreliable predictor.
What About Retail?
The third big component of the tourist economy is the retail sector, which at around $40 million a year accounts for about the same revenue as lodgings, and about half the revenue of restaurants. It’s captured reasonably well by normal sales tax receipts, with the caveat that articles of clothing under $175 aren’t subject to sales tax — and Provincetown sells a lot of clothes.
“The problem is the state doesn’t rebate any sales tax money to individual towns,” said Fuccillo, “so as far as the dept. of revenue is concerned, they don’t need to know where it’s collected. It’s not information they’re using. So we kind of have to beg them for it.
“We haven’t gotten sales tax data for Provincetown for 2017 or 2018 yet, much less 2019,” Fuccillo continued. “Retail is also the most volatile sector — it can go up or down by double digits in a single year. I’m trying to get all three years’ worth of sales tax data in December, so we can fill in some of these gaps and get a better picture of how the whole town is doing.”
Until all those tax numbers are released in December, the most one can say with real confidence is that 2019 got off to a strong start.