Myrtle Beach leaders often say the city feels a recession less and recovers faster than others.
"Normally we fare pretty well in slowdowns," City Manager Tom Leath said. "But I'm not sure we're going to fare as well this time, because of the depth of the recession."
The 5 percent dips in accommodations-tax revenue and retail sales were not unexpected. A 60 percent reduction in business-license revenue is going to hurt.
"The crisis on Wall Street has spread to Main Street, and we are clearly feeling it throughout our local economy, both in tourism and seemingly everywhere else," Myrtle Beach Area Chamber of Commerce President and CEO Brad Dean said. "2009 is shaping up to be a very challenging year, in part because of the uncertainty in financial and employment markets."
The housing slump is also going to present a problem, because no one is buying. Myrtle Beach has an abundance of property for sale. Leath predicts this is going to present a lagging economy even after the nation begins to get back on its feet, because there probably won't be much new housing built here until what's already for sale gets snapped up.
The big pinch, though, could be yet to come.
"I definitely believe the real estate downturn and a general decline in the economy will impact revenues to the city in this calendar year, but will be felt in the 2009-2010 fiscal year, which begins in June," Myrtle Beach City Council member and local restaurateur Wayne Gray said.
He predicted a 3 percent decline in accommodations tax revenue because of fewer visitors, and said the restaurant and retail sectors this coming year will feel some of what the real estate market has already been experiencing.
Though Leath said the city is in for "a rough year," Gray said its modest pricing will still make it a desirable destination for many people.
The city has started looking at what projects can be put on hold, including some sewer and sidewalk improvements, and it has decided not to issue bonds to pay for the proposed milelong boardwalk between First and 14th avenues North until the bond market is in better shape.
"We need to focus on the highest-priority projects and make sure we don't add costs for the residents or businesses," Gray said.
Leath said there is little a city can do in the way of direct stimulus, but conservative budgeting will allow the city to maintain the level of services it aims for, and it is working with Dean and the chamber on marketing.
"We have shifted the focus of our advertising to reinforce the value and affordability of the destination, and we are aggressively seeking all free publicity we can garner due to state budget cuts that have limited our paid promotion," Dean said. "To assist local businesses, we are holding the line on prices for services and products, and adding educational seminars that center around skills needed to survive tough economic times."
Dean said the chamber is cutting back where it can, but, like the city, being first in service is still critical.
As for when people think the economic forecast will grow less gloomy, everyone has a different opinion.
"If anyone tells me they know when the economy will turn around, I can't help but think of 'Pinocchio' and wonder when their nose will begin to grow," Dean joked.
Gray said he's hopeful things will loosen up later this year, but he doesn't expect the city to return to a "normal business mindset" until 2010.
"The real question is: 'have we hit bottom yet?'" Leath said. "Every day brings some bit of bad news you hadn't thought of the day before."
He predicts the city's economy will be flat or down through fiscal year 2010, and 12 to 18 months before the city can start really coming out of the slump. Dean differs, saying he thinks the region has seen the bottom of the real estate and construction cycle, but when the market will pick up remains to be seen.
The chamber is anticipating funding cuts from the state, which Leath said the city might be able to help with, because it's important to draw as many people as possible this year. Dean said he feels hopeful, though.
"We won't drop below pre-9/11 levels," he said. "Once unemployment begins to fall, consumer confidence begins to rise and the credit markets are revived, we'll begin to rebound and we believe the Grand Strand is well positioned to come out of this stronger than before."