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Sep 5, 2017 6:04 PMPublication: The Southampton Press

Mixed Reviews For Value Of This Summer's Business On The South Fork

Shoppers on Hampton Road in Southampton on Labor Day. CHRIS PERAINO
Sep 5, 2017 6:04 PM

Many East End business owners heralded the summer of 2017 as a particularly fruitful season, but also one of adjustment, as the advent of two subsets of the so-called “gig economy”—ride-sharing services, like Uber and Lyft, and overnight rentals through Airbnb—forced some to tinker with their business models.

“I think people are more conscious where they’re spending their money, so for sure,” said Jayma Cardoso, owner of the Surf Lodge in Montauk. “We had to tweak our model to stay busy throughout June, during the week and the beginning of July.”

While many local hotels increased weekday rates in an attempt to capitalize on Montauk’s trendiness, the Surf Lodge went against the grain, lowering its weekday rates from last year. “Maybe there is more choice for people now, with Airbnb, so there are fewer people who may want to pay premium at a hotel—so what do we do to stay competitive?” Ms. Cardoso said.

Mark Smith, co-owner of four East End restaurants—Nick and Toni’s in East Hampton, Rowdy Hall in East Hampton, Townline BBQ in Sagaponack, and La Fondita in Amagansett—said he believes Airbnb may contribute to a morphing clientele. No longer do consumers have to own a house or have a seasonal summer rental. Now, overnight and single-day trips are accessible to a broader audience.

“I think, economically, it might be a different consumer,” Mr. Smith said. “That consumer is probably little bit more cost-conscious.”

While Mr. Smith said all of his restaurants benefited from gross percentage increases, the La Fondita restaurant yielded the most gains, he said. As his “least expensive” restaurant, La Fondita may have been better suited to cater to what he theorizes may be a different type of consumer on the South Fork in summer. “Not 100 percent sure of that correlation, but that might be the reason why,” he said. “It might be a little bit of a shifting dynamic.”

Uber and Lyft earned some praise.

“I think it limits the gypsy cabs,” Ms. Cardoso said of Uber. “The local cabs are great. But the ones from out of town were always haggling. It has limited their ability to rip people off, because people can get a flat fee from Uber or Lyft.”

“I love it,” said Theresa Fontana, owner of three retail clothing stores in Quogue: Mr. Q, Little Q and the Lily Pad. “It brings people in and out with ease.”

It was reported to be a particularly profitable year for businesses on Main Street in Quogue, in large part due to the reopening of the Quogue Market. For stores that thrive on foot traffic and sauntering consumers, the return of a mainstay eatery propelled income: Come for the food, stay for the chic local clothing.

“We noticed a big difference,” Ms. Fontana said of foot traffic after the market reopened. While she said that all three of her stores performed “better than ever” because of her comparatively long hours and name recognition, Little Q, which is situated across the street from the Quogue Deli, was her store with the greatest profit increase from previous summers.

While Quogue benefited from its renewal, Sag Harbor coped without its cinema, which was ravaged by a fire last December. Despite its absence, and the subsequent loss of potential foot traffic, businesses carried on and in some cases even fared better. Owners attribute this to Sag Harbor’s greater name recognition: A bustling downtown more than made up for the loss.

“I think people hear about Sag Harbor now,” said Charlene Katz, co-owner of Kites of the Harbor, a store that sells kites and specialty toys. “It just was different people. At the end, it was a lot of day-trippers.”

Gwen Waddington, co-owner of The Wharf Shop, a toy store in Sag Harbor, noticed an uptick in evening and weekend traffic from last year. “We had a very busy summer, but I attribute some of that to so many inclement Saturdays. And if you can’t go to the beach, you take your kids to a toy store,” she said, adding that staying open until 9:30 p.m. was a boon for business and caught consumers leaving the restaurants.

Kites of the Harbor sold an increased amount of smaller items relative to previous years. Spinners, squishies and floats were its top sellers Ms. Katz attributes this to the Airbnb crowd that needs day-trip accommodation, as opposed to more long-term purchases.

“I think with Airbnb, there’s so many more people renting just for a weekend,” she said. “There’s a bigger turnover.”

Ms. Waddington said that her clientele were largely the same as in previous years second-home owners. But one thing did strike her.

“Sometimes in August, some of our customers tend to be a little harried, and subsequently, they might not be so patient. But this August, I felt we didn’t have that,” she said, adding that she wasn’t sure why that was the case.

Back in Montauk, whose tourism business seems to have skyrocketed in the past half-decade, some saw something of a plateau in growth. Regulations that limit noise levels and institute music curfews in an attempt to quell the raucous crowds of past years seem to have nurtured a more laid-back, community-friendly crowd.

“It doesn’t make sense to fight a losing battle,” Ms. Cardoso said, adding that next year, the Surf Lodge will most likely only play live music on Sundays and will dial back on the marquee musicians, like Lauryn Hill and Ben Harper, that it hosted in the past. The Surf Lodge tends to front-load bigger-name concerts in June in order to compensate for lower turnout.

“I’m always thinking how to we become busy and successful,” said Ms. Cardoso. “You have to tweak.”

John’s Drive-In, a longtime food hot spot in Montauk, actually had a better summer this year than in 2016. So much so that co-owner David Rutkowski said on Tuesday that he and fellow local business owners were able to notice an actual change in demographics within the summer months.

“In July, there were a lot more young single people coming around, and in August, we saw a lot more families in the area,” Mr. Rutkowski said. “Younger people usually come out on the beach during the day and go out to party later at night.”

Not all East End communities claimed a bountiful summer season this year.

Steve Ringel, executive director of the East Hampton Chamber of Commerce, said that he received many calls from businesses in the Village of East Hampton saying that the summer had not been particularly fruitful for them. He said on Tuesday that local merchants told him that their profits were down 20 to 30 percent this year.

“It was not a good season,” he said. “There’s also people in the village who are part of the Amazon generation that do their shopping online, so that could also be a contributing factor.”

Mr. Ringel said he noticed Sag Harbor and Montauk merchants having successful summers this year and added that he wants to increase public awareness of what East Hampton Village has to offer—in particular by offering weekly events to attract visitors.

“The problem is what’s not going on,” he said of East Hampton Village. “We don’t have evening concerts, and we don’t have a town square, we have Herrick Park. When you go to watch a movie at night, there’s nothing to do in the village when you get out, because everything’s closed later in the night,” Mr. Ringel said.

“I got so many calls during the holidays from people asking if the stores were open. A lot of people from Manhattan and other parts of the city didn’t know if the hotels or stores were even open during the holiday season. One lady was serious when she called and asked me, ‘Should I get gas before coming here?’”

Mr. Ringel said he and the chamber plan to bring the surrounding East End communities back into the village through more local events, including a potential fall festival and a music festival later in the year. A crucial element to bringing business back to the village, according to Mr. Ringel, is bringing the local vendors together instead of competing with each other.

“We can’t just rest and wait for the people to come because we’re East Hampton,” he said. “We have to actually breathe life into the village through marketing, and we have to be all together on this. It takes teamwork to make the dream work.”

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Sag Harbor, Music Festival, Tickets, Nancy Atlas, American Music