Chapter 7: Economy
Purpose
Understanding our local and regional economy will help assess the community’s current and future needs. The number of local jobs, the sectors in which those jobs are located, as well as access to employment within the wider region will impact our community and affect Ogunquit’s future growth. Specifically, this section aims to:
- Describeemployment trends;
- Describethe local and regional economy; and
- Discusslikely future economic activity in Ogunquit
Understanding our local and regional economy will help assess the community’s current and future needs.
Understanding our local and regional economy will help assess the community’s current and future needs.
Overview and History
During the 18th Century, the economy of Ogunquit, as part of Wells, and the Maine seacoast was tied to fishing, lumbering, shipbuilding and homestead farming. The 19th Century brought the industrial revolution to Ogunquit/Wells. The Webhannet, Josias and Ogunquit Rivers supplied enough waterpower for flour milling and lumber sawing. Coastal shipping allowed export of lumber and wood products, granite and fish in exchange for import of sugar products, groceries and manufactured products.
During the 1880s, summer home development began to supplant farms along the shore in Ogunquit and the summer art colony era began. After the bridge was built over the Ogunquit River at Beach Street in the 1890s, more beach hotels began to cater to summer vacationers mostly from the metropolitan areas to the south. Between 1906 and 1923, the Atlantic Shore Railroad brought summer residents and vacationers directly to their hotels and summer houses in Ogunquit. The art colony flourished
from the 1920s to the 1960s leaving a permanent legacy of museums and summer theatres.
The 1920s began the modern era of automobile vacationing in Ogunquit and started the influx of summer home residents, motel, hotel, inn and B&B vacationers and beachgoers. The 1980s and 90s saw the steady growth of tourist-related restaurants and retail shops. Business’ demands for seasonal employees extends throughout southern York County and relies on temporary workers from other countries, including Canada, the Caribbean, and Eastern Europe.
In the 21st Century, Ogunquit’s economy continues to be dominated by the lengthening tourism season. It is also beginning to provide jobs suitable for retirees as a more year-round community develops and as more summer residents retire to the Town, as evidenced by the 2020 Census. Ogunquit’s economic development is limited, to a degree, by the small land area of less than 4.5 square miles, much of which is in a preserved and undeveloped state.
The 1920s began the modern era of automobile vacationing in Ogunquit and started the influx of summer home residents, motel, hotel, inn and B&B vacationers and beachgoers.
Ogunquit’s abundant natural resources provide significant attractions for tourists.
Ogunquit’s abundant natural resources, as detailed in other chapters of this Plan, provide significant attractions for tourists, and indeed the Ogunquit economy is driven by the seasonal hospitality industries. As most of the tourist attractions tend to be seasonal, economic growth
has been achieved by extending the tourist season through attractions such as the Ogunquit Playhouse, the Ogunquit Museum of American Art, and Chamber of Commerce events like Christmas by the Sea.
While Ogunquit has limited the development of additional large hotels, more homes are being utilized as transient accommodation through short-term rentals. With its limited development space, focus has instead been directed towards preserving the small-town charm and heritage, as noted in the Historical and Archeological Resources chapter, and preserving natural resources, as noted in that chapter.
Ogunquit Beach Photo Credit: David Johnson
Ogunquit’s commerce is concentrated in a few specific areas: the Downtown Village, Perkins Cove, along Route 1, and at the Main Beach. Much of the
Town revenue is generated by municipally owned parking lots throughout the town.
Ogunquit faces some significant economic development challenges in the near future. The beaches, Marginal Way, Perkins Cove, and town parking lots are all at risk due to sea level rise, potentially reducing tourist numbers and town revenue sources while incurring expenses for repair. Perkins Cove will soon need
dredging, significant sea wall repairs, and a new footbridge, posing economic challenges during the tourist season.
The beaches, Marginal Way, Perkins Cove, and town parking lots are all at risk due to sea level rise.
2020 Covid-19 Impacts
Covid-19 had a severe impact on the Ogunquit economy. Pandemic restrictions closed many businesses and effectively stopped the tourist industry for several months. Canadian visitors, who comprise a significant percentage of Ogunquit’s annual revenue, stopped completely. Most of Ogunquit’s restaurants are locally owned and operated, and the
Ogunquit Chamber of Commerce initially feared that as many as 1/3 of the town’s small businesses would close. However, the year was saved by government support and the slow reopening of businesses in time for the summer season. The Town, the Chamber, and area business owners worked together to create safe spaces, dramatically expanding outdoor dining and shopping opportunities. While
Canadian visitors did not arrive, more people from the Northeast discovered Ogunquit and helped offset much of the lost business.
Ogunquit’s 40th anniversary of incorporating as a Town occurred in 2020, but Covid restrictions effectively stopped any planned celebrations. However, Ogunquit finally celebrated its anniversary on June 10, 2022, with BonAire, as detailed in the Historical and Archeological chapter. It was a great success with a large turnout.
Labor Force
Whereas Ogunquit’s year-round population increased by a substantial 76.8% between 2010 and 2020 (892 to 1,577), the town’s labor force increased by only 2%. There are likely several reasons for this occurrence. The first is the aging of the Baby Boomer population. The second reason is that many of the new year-round residents were already retired or became retired. The number of Ogunquit residents not in the labor force increased by 50.4% from 2010 to 2015 and by 2% from 2015 to 2020.
Whereas Ogunquit’s year-round population increased by 76.8%, the Town’s labor force increased only 2%.
Ogunquit’s labor force remained at approximately 5% of the Wells Labor Market Area (LMA) between 2010 and 2020, but the percentage of employed persons within the LMA increased by nearly 7% from 2015 to 2020. As a percentage of York County’s labor force, however, data shows that Ogunquit’s employed share has been relatively stable at approximately 0.4%; the
number of unemployed individuals increased slightly (1.8%) between 2015 and 2020, likely a result of the short recession that occurred during the months of lockdown.
Table 2.1 Ogunquit Year-Round Labor Force, 2010 – 2020.
|
|
2010 |
2015 |
2020 | 2010 – 2015 # Change | 2010 – 2015 % Change | 2015 – 2020 # Change | 2015 – 2020 % Change |
Ogunquit | Labor Force | 438 | 451 | 447 | 13 | 3.00% | -4 | -0.89% |
Employed | 366 | 421 | 408 | 55 | 15.00% | -13 | -3.19% | |
% Unemployed | 16.40% | 6.70% | 8.70% | -9.70% | -59.10% | 2% | 22.99% | |
Not in Labor Force | 589 | 886 | 596 | 297 | 50.40% | -290 | -48.66% | |
Ogunquit (% of Wells LMA*) | Labor Force | 5.50% | 5.30% | 5.15% | -0.20% | -0.20% | -0.15% | -3.00% |
Employed | 5.20% | 5.20% | 4.97% | 0.00% | 0.00% | -0.23% | -4.70% | |
# Unemployed | 7.60% | 7.70% | 8.26% | 0.10% | 0.10% | 0.56% | 6.81% | |
Ogunquit (% of York County) | Labor Force | 0.40% | 0.40% | 0.41% | 0.00% | 0.00% | 0.01% | 1.78% |
Employed | 0.40% | 0.40% | 0.39% | 0.00% | 0.00% | -0.01% | -2.25% | |
# Unemployed | 0.70% | 0.70% | 0.71% | 0.00% | 0.00% | 0.01% | 1.80% |
* Wells Labor Market Area includes the towns of Wells, North Berwick & Ogunquit.
Employment by Industry Group
Between 2010 and 2020, employment of year-round Ogunquit residents remained overwhelmingly in the Accommodation and Food Services sector: 70.9% in 2010, 68.4% in 2020 (See Table 2.2). There are several noteworthy trends in the industry sector employment of Ogunquit’s residents from 2010 to 2020. Despite the effects of the pandemic, employment in the Finance and Insurance sector more than doubled, from 11 to 25 persons (potentially the result of remote workers), while Other Services (except Public Administration), which typically includes repairs, religious activities, grantmaking, advocacy, laundry, personal care, death care, and other personal services per the NAICS definition, more than doubled from 11 to 21 employees.
The Maine Department of Labor (MDOL) covers employment for businesses in Maine. Rather than Census Bureau data, which collects information on the residents, MDOL collects data on businesses in a municipality. MDOL data allows for an analysis of the existing employment base in a community (See Figure 2.2). In 2020, Ogunquit’s employment base was overwhelmingly in two sectors, Accommodation and Food Services at 50% and Retail Trade at 20.3%.
Table 2.2 Average employment of Ogunquit residents compared to Wells LMA, 2010-2020.
There were also several industry sectors that saw decreases in Ogunquit from 2010 to 2020, which was not unexpected given the prevalence of the pandemic in 2020 (See Table 2.2). Transportation and Warehousing dropped from 22 to 12 employees, Real Estate and Rental and Leasing decreased from 34 to 16, and, as mentioned above, Accommodation and Food Services dropped by nearly 200 employees from 1,064 to 834. Retail Trade, while also experiencing a decline, was relatively stable in comparison.
Figure 2.1 Changes in Ogunquit employment across industry sectors between 2010-2020.
The percentage of Ogunquit residents employed in different sectors of the economy follows a pattern similar to the residents of the Wells Labor Market Area (see Figure 2.2). This is likely a reflection of the presence Ogunquit has within the labor market area as a seasonal employment center. Ogunquit allows Home Occupation businesses.
Figure 2.2 Comparison of the percent of Ogunquit and Wells LMA residents employed in two major industry sectors in 2020.
Labor Force
Over the last 30 years, Ogunquit’s economy has become increasingly tourist oriented. In 2022, there were about 1,691 transient rental rooms in hotels, motels, inns and B&Bs, including 161 active short term rental units. This seasonal population, which includes upwards of 20,000 people including day-tripper beachgoers (in contrast to 1,577
year-round), supports many ancillary tourist businesses: restaurants, bakeries, retail shops and
Figure 2.3 Ogunquit industry sectors by percentage (2022).
recreational businesses such as party boat fishing and scenic cruising.
| Table 2.4 Industries in Ogunquit, 2020. | |||||
| # of Businesses | % of total | Number Employed | Total Wages | Average Weekly Wage | |
| Retail Trade | 41 | 20.30% | 114 | $3,141,076 | $531 |
| Transportation and Warehousing | 5 | 2.48% | 12 | $546,613 | $864 |
| Finance and Insurance | 7 | 3.47% | 25 | $1,769,456 | $1,348 |
| Real Estate and Rental and Leasing | 6 | 2.97% | 16 | $850,288 | $1,011 |
| Accommodation and Food Services | 101 | 50.00% | 834 | $29,173,578 | $673 |
| Other Services (except Public Admin.) | 9 | 4.46% | 21 | $828,725 | $750 |
| Total, All Industries | 202 | 100.00% | 1,219 | $48,970,905 | $773 |
The hospitality industry also supports local year-round businesses including sign- makers, lawn care/grounds keepers, building maintenance and cleaning contractors and professional businesses including architects and engineers. The local arts community is also benefited by the tourist industry in terms of museum, art gallery visitors and summer theatre patrons. The Ogunquit Playhouse alone generates $9 million in ticket sales each year.
Table 2.5 Transient Accommodations
| Rooms | % of total |
B&B | 102 | 6% |
Hotel | 533 | 32% |
Motel | 250 | 15% |
Inn | 645 | 38% |
Short-Term Rental* | 238 | 10% |
Total | 1,768 | 100 |
Data source: Town Assessor parcel data (2022) | ||
The large seasonal employment generated by the tourist industry provides seasonal jobs for local high school and college students and other residents of the region and temporary workers from outside the US.
At the beginning of the 21st Century, the trend has been for the tourist shoulder seasons (spring and fall) to gradually expand to accommodate the increasing number of retirees, who are not constrained by the school year and who are more frequently arriving by tour bus. As the baby-boomers begin to retire, this trend may be expected to continue. From the traditional summer season in the 1960s of July — August, to the season of June — October in the 1990s, the 21st Century tourist season is likely to be from April to November, with the December Holiday season added.
Ogunquit has no manufacturing industry, limited by Ordinance to light manufacturing by contract zoning on the Farm District. The Ogunquit Playhouse has a facility used to design and create sets for annual shows.
The Town’s working waterfront is anchored by the fishing and lobstering industry, which includes as many as twenty boats at a given time. Like many working waterfronts in coastal Maine, the industry faces several significant pressures, including the retirement of older fishermen and the disinclination of younger family members to continue the business; pressure from housing, hospitality, and other commercial uses for waterfront spaces; and the movement of fish stocks to points north due to warming waters in the Gulf of Maine. One potential danger facing the lobster industry is the threat of Chinese tariffs.
Ogunquit has adequate three phase power utilities and broadband internet connections are available. The KKWWD supplies water along Route 1 and into adjacent areas. The Ogunquit Sewer District provides services in all business districts.
Ogunquit’s working waterfront is anchored by the fishing and lobstering industry.
Retail Sectors and Hospitality
Ogunquit’s retail sector is unusual in that it is based upon many small pedestrian-oriented units, including hotels and motels, retail stores and businesses, rather than one large automobile-based shopping mall type development containing chain stores, although there have been several recent purchases of local hotels by corporations. The tourist industry on the
coast of Maine is still largely characterized by individually owned hotels and businesses rather than large franchises.
Figure 2.4 demonstrates the large spike in Accommodation and Food Services sector employees that occurs in the third quarter each year, nearly tripling from the second quarter number as the sector staffs up to meet the demands of the high tourist season.
Table 2.6 shows that Ogunquit’s overall consumer sales decreased by 20.1% from 2010 to 2020, the most recent year for which decennial Census population data is available. Total consumer sales in Ogunquit amounted to just
Figure 2.4 Number of Employees by Quarter in the Accommodation and Food Services Sector in 2020.
Source: Maine Department of Revenue
$86,508,728 in 2020, while it was $108,365,296 in 2010. Given the suppressive effect of the COVID-19 pandemic on the Accommodation and Food Services sector in 2020, this reduction is to be expected; however, 2022 consumer sales data reveals that consumer sales that year hit an all-time high of $187,408,880, demonstrating the degree to which latent hospitality demand was suppressed by the pandemic.
As a result of its small population and geographic size compared with other York County towns, Ogunquit is a high generator of consumers sales on a year-round population or square mile basis. In 2020, Ogunquit had $54,865 worth of consumer sales per year-round resident and
$20,695,868 per square mile. With 2022 sales data and estimated population of 1,207, the sales per resident were $155,268 and $44,834,660 per square mile. This reflects the extraordinary amount of seasonal revenue Ogunquit generated by the hospitality industry: hotels, motels, inns, and B&Bs, as well the large secondary sales resulting from tourists. Another indicator of the strong seasonality of the Ogunquit economy is the yearly pattern os sales tax receipts. Ogunquit sales tax rises dramatically during the second and third quarters of the year, which is the prime coastal tourism season. In comparison, while on a statewide basis Maine experiences a similar pattern of sales tax receipts, the second and third quarters do not show rapid growth and the fourth quarter does not decline as much as Ogunquit.
Table 2.6 Consumer Sales in Ogunquit, 2010 & 2020 (in thousands of $)
| Total Consumer Sales | Population | Sales Per Capita | Square Miles | Sales / Square Mile |
2010 | $108,365,296 | 1,099 | $98,603.54 | 4.1 | $26,430,560 / sq. mile |
2020 | $86,508,78 | 1,577 | $54,856.52 | 4.1 | $21,099,689 / sq. mile |
Community Support for Economic Growth
The tourist industry provides benefits to residents, and the Town supports this industry in many ways. The parking revenue helps to fund full-time police and fire departments. The Department of Public Works provides landscaping and trash service for the business centers to maintain a clean and attractive destination for all. Ogunquit adds seasonal police officers to help keep the town safe. Visitor Services runs Town parking lots and provides face-to-face contact to tourists, hiring many summer workers. Ogunquit always hires a large lifeguard force to provide beach safety and first aid. The Ogunquit Parks and Recreation Department organizes child and family events throughout the
summer, including an outdoor concert series. The Marginal Way Committee maintains the famous footpath for the enjoyment of all.
Voters recently approved a new zoning district to allow the Ogunquit Playhouse to modernize and provide improved accessibility for patrons. The Harbormaster provides
services to the fishing industry and tourists at Perkins Cove. The Town and the Chamber work closely to provide town wide events throughout the year, such as BonAire and Christmas by the Sea. The Ogunquit Performing Arts Committee organizes events at the Dunaway Center throughout the year. Tourists love the Town’s unique and locally owned restaurants and shops, and many businesses remain open year-round for the enjoyment of the residents.
The Town does not have TIF districts due to its small size and limited development potential.
The tourist industry provides benefits to residents, and the Town supports this industry in many ways.
Regional Economic Development Plans
Ogunquit lies within the federal Economic Development District (EDD) administered by the Southern Maine Planning and Development Commission (SMPDC). Every five years, SMPDC drafts a Comprehensive Economic Development Strategy (CEDS) setting forth policies and action items intended to help grow the region’s economy and ensure its economic competitiveness. The most recent CEDS, drafted in 2022, includes several actions relevant to Ogunquit’s local economy, including Action 4.1, Support Efforts by Municipalities to Revitalize Downtowns and Commercial Districts, Action 5.3, Improve the Region’s Public Transit and Alternative Transit System, and Action 10.2, Support Local Regulatory Efforts to Address Resilience.
The State Department of Economic and Community Development (DECD) adopted a ten-year economic strategy that includes several relevant strategies, such as Action E3, Expand production of workforce housing in Maine, and Action F4, Control healthcare costs.
Goals, Policies and Strategies
Goal
To support a thriving and expanding town economy and preserve the natural resources and architectural and historical resources that attract people to Ogunquit.
Policies:
- Todesignate Ogunquit’s growth
- Tomake any necessary financial commitments to support desired economic development, including needed public
- Tocoordinate with regional development entities and surrounding towns as necessary to support desired economic
- Toensure that the Ogunquit Zoning Ordinance (OZO) safeguards all local
- Toimprove local ordinance
Strategies:
- Priority: 1-5 with 1 being the highest priority.
| Description | Priority | Responsibility |
| Tighten enforcement of existing ordinances; set fine structure and analyze and report on feasibility of adding enforcement capacity. | 1 | Select Board |
| Enact or amend local ordinances to reflect the desired scale, design, intensity, and location of future economic development. | 2 | Planning Board |
| Assign responsibility and provide financial support for economic development activities to the proper entities. | 3 | Select Board |
| Review Trolley system and consider future options to improve and supplement services. | 4 | Town Manager |
| Analyze and make recommendations to encourage more year-round businesses, including services such as CPAs, plumbers, electricians, etc. Work with other municipalities to review need and supply. | 5 | Select Board |
| Analyze and make recommendations on the feasibility of building a municipal parking garage. | Town Manager | |
| Consider initiating a market analysis of the Town’s tourist industry. | Town Manager | |
| Analyze and make recommendations on positive and negative effects of allowing expanded outdoor sales. | Planning Board | |
| Analyze and make recommendations on viability of workforce housing in town, including public/private development. | Town Manager | |
| Analyze and make recommendations on feasibility of incentivizing additional ride sharing services. | Planning Board | |
| Revise OZO to define chain restaurants more strictly. | Planning Board | |
| Revise OZO to beter define prohibition of chain retail stores. | Planning Board | |
| Revise OZO to prohibit chain transient accommodations. | Planning Board | |
| Analyze and make recommendations on expanding Type 2 (with outdoor seating) restaurants. | Planning Board | |
| Analyze and make recommendations on allowing “Open” flags, especially in the off-season. | Planning Board | |
| Analyze and make recommendations on the viability of a local option tax. | Town Manager | |
| Participate in any regional economic development planning and purchasing efforts. | Select Board | |
| If public investments are to support economic development, identify the mechanisms to be considered to finance them (local tax dollars, creating a tax increment financing district, a Community Development Block Grant or other grants, bonding, impact fees, etc.). | Town Treasurer | |
| Work with the Ogunquit Chamber of Commerce to connect local businesses with small business economic development funding from State DECD and other funders. | Town Manager |