Santa Cruz beaches are popular, but not necessarily packed; neither are a lot of businesses in town. That's why just about everyone is hoping, Memorial Day weekend will mean a turn-around.
"This Memorial Day, unfortunately we're about only 50 percent occupied," said Chris Ferrante from the Terrace Court Motel.
Normally the Terrace Court Motel is 75 percent full right now. Management is counting on walk-ins heading to Santa Cruz, which may happen. According to AAA, this year most vacationers will drive just 50 miles away from home and they're looking for deals.
"We need people to come," said Vice Mayor Ryan Coonerty.
For the first time, Santa Cruz is really investing in luring regional tourists to the area. An e-mail went out to travel agents in Northern California and a TV commercial specifically aired specifically in the Sacramento Valley.
"It's tough times and everybody's competing for people's attention and so we're doing our best to compete as well," said Coonerty.
Santa Cruz has a $4 million budget defect and the city's store, restaurants, and hotels are also hurting. On average, business is down 20 percent.
"Right now they're advertising more than they ever have before," said Dave Barnes from the Stagnaro Brothers Restaurant.
Stagnaro Brothers Restaurant needs this holiday weekend to be a strong one. Owners are dropping prices and offering a happy hour for the first time.
"We are here at happy hour so we know its budget time," said Lisa McMillan, a Santa Cruz County resident.
Online hotel and restaurant deals drove tourist Emily Smith to Santa Cruz from Southern California.
"It's less expensive to go than popular places over Memorial Day weekend," said Smith.
Locals are also attracted by some deals, but not all.
"We'd rather just stay at home, the price is much better, you're not having to pay for the hotel bills," said Mike McMillan, from Santa Cruz County.
Hotels are one of the city's largest revenue sources and they could be the hardest hit this year.