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Recession Chills Market for Vacationland Rentals

April 22, 2009 - BIDDEFORD -- Jeff McGuire is jumping into the summer rental market at an uncertain time.

McGuire and some family members are the new owners of a three-bedroom 1920s cottage in the Fortunes Rocks area. They are hoping to rent out the house from May to September. They started advertising on the Internet in December and had some luck, booking about five or six weeks.

"Now it's slowed down," said McGuire, an engineer from Milwaukee who was working on improvement projects at the house this week.

Rental agents and property owners in Maine tourist towns are finding the recession has visitors booking later, regulars returning at lower rates and bargain hunters more aggressively seeking discounts. At the same time, more houses are being offered for rent by owners who are unable to sell in a slow real estate market.

Bookings are down about 30 percent at Maine Seaside Rentals, which manages properties on the Biddeford waterfront, said Marysue Emhiser, the agency's owner. The booking season usually is in full swing in January, she said, with the phone ringing constantly. This year January was quiet, and the calls seemed to stop in February.

Emhiser believes economic uncertainty has customers holding off on their plans. She and others are hoping for good news that will change that.

"It's still quiet. Other people I've talked to, I think their sense is as the economic news gets better, people will go on vacation," she said. "I am hoping that."

For 1st Maine Real Estate, rentals on the water in Biddeford are doing well, said Steve Foran, a coastal specialist. It's slower for those off the water, but he's optimistic that activity will pick up as summer gets closer.

"The days are getting longer, the weather's breaking," he said. "Even those behind the eight ball will catch up."

The slow rental market is a concern for the Pool Lobster Co., located inside F.O. Goldthwaite's grocery store in Biddeford Pool. The business is heavily dependent on summer renters because it doesn't have the drive-by traffic of a heavily traveled area, said Ada Goff, one of the three manager-owners.

Goff said they're still working on their strategy for the summer season, but already anticipate that it will be a challenging one.

"We also expect the manager-owners will be pulling longer hours and taking up slack in some of the positions staff would have done in the past," she said.

Visitors account for about half of the business at Gone with the Wind, a nearby kayak rental business, said owner Mike Gerstner. He's worried about the recession, but hopes visitors will opt for experiences that bring them close to Maine nature even as they pull back on spending.

"I'm hoping what people will forgo is the seven-course meal at an expensive restaurant, and not give up kayaking," he said.

The recession is affecting rentals in many Maine vacation spots.

Normally, Peggy Frongillo would have her ocean-view condominium in Old Orchard Beach booked for the entire summer. But this year, she found that many repeat renters weren't able to afford the vacation.

She's now worried about the mortgage payments on a property that once seemed like a good investment.

"If I could sell it right now, I'd sell it in a heartbeat," she said, adding that nearby condos also have not been selling.

Summer renters are important to the tourism industry, said Eleanor Vadenais, executive director of the Wells Chamber of Commerce.

"They're going to the grocery store. They're going to the lobster pound. They're shopping. They're still going to the attractions," she said.

Bargain hunters seem to be out in larger numbers this year and are trying to negotiate discounts earlier, agents said.

At Rivers by the Sea Sales and Rentals, which handles properties in York County and around Portsmouth, N.H., callers previously didn't ask for discounts until about June, said Sue Haskell, a rental manager in York Harbor. This year, those calls have started already.

"The current state of the economy, they're taking advantage of that," she said.

It could help Maine spots if budget-conscious travelers look to rentals as a more affordable vacation option.

Leah Rich, manager of Seashore Property Management in Old Orchard Beach, said she has noticed more renters from Maine this year. And more families seem interested in vacationing together in a place where they can eat in.

"It's a good shot to get a couple of families into one unit. And it's reasonably priced," she said.

On the Water in Maine has more renters this year, but many more properties to fill, said owner Justin Ford. The company managed about 120 properties last year and now has more than 200.

Properties in the Acadia area are doing pretty well, but Down East is not faring well, Ford said, and much of the midcoast is lagging behind the Boothbay area and southern Maine.

"I would say we're nervous," he said. "I would tell our owners it's going to be a nail-biter till the end."

By ANN S. KIM, Staff Writer, Portland Press Herald, April 16, 2009


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