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Labor and housing shortages cast shadow over Ocean City’s season

What is shaping up as a comeback season for Ocean City may be undermined by labor and housing shortages, officials say. (The Daily Record/File Photo)

What is shaping up as a comeback season for Ocean City may be undermined by labor and housing shortages, officials say. (The Daily Record/File Photo)

It’s shaping up to be a record-setting year for Ocean City, Maryland, as many newly vaccinated beachgoers celebrate their first chance to travel since the start of the pandemic.

“The phrase I’ve been quoted saying is, everybody’s got cabin fever on steroids,” said Sal Fasano, owner of La Quinta Inn & Suites on 32nd Street and a veteran hotelier.

But some businesses aren’t ready for a massive wave of visitors. The city’s restaurants, hotels and attractions, which accommodate 8 million out-of-towners each year, are suffering from a worker shortage that is forcing them to limit their hours and capacities.

While worker shortages in low-wage positions have been reported nationwide, mostly attributed to unsatisfactory pay, suboptimal working conditions and ongoing pandemic unemployment benefits, most of Ocean City’s problems lie in what, most summers, is one of its greatest assets: international students.

For years, Ocean City has invited international students to work in its restaurants and hotels through the J-1 visa seasonal work and travel program. But this year, a shortage of temporary summer housing, as well as delays processing students’ visas, have limited the number of workers coming into the popular tourist destination.

In a typical year, more than 4,000 international students come to work in Ocean City, according to Lachelle Scarlato, executive director of the Greater Ocean City Chamber of Commerce, and many work more than one job. They’ve become a vital part of the economy of Ocean City, which has a population of only around 7,000 residents but requires 12,000 seasonal employees to accommodate tourists in the summer.

But last year, that labor source was disrupted by the pandemic and a subsequent freeze on new work visas. Only students who had already gotten their visas before the freeze started in March could come into the country. Only 11 students working with United Work and Travel, an Owings Mills-based company that usually places around 1,100 J-1 workers into Ocean City in a given year, got their visas in time to work in the summer of 2020.

“In 2020, there was essentially no program,” said Kasey Simon, the organization’s president.

Though the freeze has since ended, its effects are still ricocheting this summer.

United Work and Travel usually helps J-1 students find housing through its housing partners, landlords who rent dormitory-style spaces to international workers for several months at a time. But during the freeze on visas, many of those property owners chose to sell or convert these buildings, leading to a shortage of temporary housing for J-1 students and other seasonal workers.

“(They) made conversions to AirBnB and VRBO in relatively large numbers, because they had bills and obligations,” Scarlato said. “At that juncture, we were struggling with hotels, at times, being closed, so that market increased significantly … and now, to convert those back is not likely.”

That was on top of a shortage of temporary housing that had existed in Ocean City for years, she said.

For United Work and Travel, the largest of about 10 organizations that place J-1 workers in Ocean City, the number of housing providers they work with has decreased from 31 in 2019 to roughly half that number in 2021 (though the average number of rooms per dormitory is higher now). The organization will bring just over 800 students, or about 73% as many as they ordinarily do, into Ocean City this year.

According to Scarlato, Ocean City’s labor shortage can’t be attributed to low wages — most establishments in the city pay summer workers between $15 and $20 per hour. Nevertheless, many businesses are choosing to increase employees’ pay or offer additional incentives in hopes of attracting more workers.

“People are fighting over workers. It’s gotten a little mercenarial, offering different incentives, whether its signing bonuses, year-end bonuses,” said Fasano.

At the peak of the season, Fasano typically has a staff of around 50 at his hotel, a quarter of whom are J-1 students. This year, he’s tried to attract as many local workers as possible, but it’s been a challenge. His listing for housekeepers on “Indeed,” a popular job hunting platform, was posted in February; since then, hundreds of applications have rolled in and he’s contacted over 300 people for interviews.

Of that number, only eight have actually accepted the job, about a half a dozen short of the number of housekeepers La Quinta needs to have on staff.

Hotels that can’t fill positions will be forced to reduce the number of rooms they have available, Fasano said, which will subsequently increase the cost of a stay, especially as demand stays high. Restaurants may limit the size of their dining room, and some will close for part of the week, hoping to avoid burning out the few employees they do have.

“We haven’t even hit season yet and we’ve already seen people doing that,” Fasano said.

Currently, it’s uncertain how many J-1 visa holders total will be working in Ocean City this summer; the students usually come in waves over the course of the summer, based on when their country’s school year starts and stops. Currently, Scarlato estimates there are well under 500 international students currently working in the town.

But the Chamber of Commerce is already looking forward towards solutions for next year; there are plans for at least one new dorm building to be constructed by next May — the first of what will hopefully be several new housing facilities.

Simon sees it as a win-win situation for businesses, landlords, employees and tourists alike.

“Everybody stands to benefit. The businesses, their labor needs are through the roof. And our program is not going anywhere,” he said. “We have the ability to fill these dormitories, and it adds to the town of Ocean City when we’re able to provide housing.”

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