Tourism promises cash benefits for Ocean City’s muni network

Business models in the muni space have been trending toward revenue commitments for service providers, often in the form of anchor tenancies. But Ocean City, N.J., is turning the tables with an RFP that promises significant return, but makes no guarantees, for the provider. Think no one will bid? Think again.Business models in the muni space have been trending toward revenue commitments for service providers, often in the form of anchor tenancies. But Ocean City, N.J., is turning the tables with an RFP that promises significant return, but makes no guarantees, for the provider. Think no one will bid? Think again.

Ten companies have registered to bid on Ocean City’s RFP and the city expects to receive five to six strong bids out of that number. Bids are due July 26. A contract is expected to be awarded in September and the network is expected to go live next May.

What do potential bidders find so compelling? The unique demographics of the seaside resort. Ocean City has only about 6000 permanent residents but, when the sun is warm and the sand is inviting, that number swells to multiples of itself. It is not unusual to find tourists outnumbering residents 10 or 20 to one.

MRI, the coinsultants working with the city, are very cognizant of data from an AT&T study that shows two-thirds of travelers are likely to use the Internet while on vacation.

Ocean City, situated on the New Jersey shore between New York and Philadelphia, attracts vacationers who spend three or more days there per visit and are as likely to pack a laptop as they are sun screen.

“We are very conscious of the fact that the business proposition has to make sense for all parties involved,” Jonathan Baltruch, president of MRI, the city’s told me. And, of course, no one business model fits all cities. It’s not likely the Ocean City model can be cloned but cities can learn from others’ experiences.

Ocean city is looking to own the network and outsource its operation to the provider that handles the deployment. MRI estimates the city could receive more than $22 million in fees from the network over five years. Jonathan tells me the financial model used for the projection is even rather conservative, estimating that 10 percent of visitors to the city will use the system, paying a daily fee of $5.95.

Click here for information on Ocean City’s RFP.

Click here for a video on the project.