REHOBOTH BEACH — After two years of blockbuster success, Delaware’s tourism-based businesses at the beach are starting to see demand wane.
For some, like Grotto Pizza President Jeff Gosnear, slower may not be such a bad thing.
“It’s all relative to what we’ve experienced in the past and maybe this is back to normal instead of upheaval,” he told the Delaware Business Times. “Hiring has gotten better and, every year, it gets better than the last since the pandemic started.”
When the COVID-19 pandemic started, many Delawareans and out-of-state visitors flocked to the state’s beaches for an easy to drive-to location with plenty of outdoor entertainment options. Delaware is within a two-hour drive of thousands of residents who live in Philadelphia, Baltimore and Washington, D.C. But that attraction may be waning now that people are now settled into a so-called post-COVID world as cruises and airplanes re-open more destination options.
The Rehoboth Beach-Dewey Beach Chamber of Commerce tracks occupancy rates of member hotels and reports that the four-day Fourth of July weekend saw 3,408 rooms booked this year. That’s slightly under the hotel booking for the holiday weekend in 2021 which saw 3,534 booked hotel rooms.
Rehoboth Beach-Dewey Beach Chamber of Commerce President and CEO Carol Everhart said that July this year was slightly down and the wet spring months did not help with the lead up. But she’s encouraged by the strong mid-week bookings outperforming.
“It could mean that we’re seeing more people renting out houses here and hitting the grocery stores. The economy plays into how people choose to spend the vacation. They could be weighing their options. Hotel room prices can be high because the cost of doing business now is high,” Everhart said. “You may also see people wait out until September or October to see prices drop, but time will tell.”
Midscale and upscale hotels, like those managed by Real Hospitality Group, are seeing the Delaware summer trend still flat compared to 2023. The third-party hotel management company has 160 hotels since it merged with Stonebridge Companies, including the SpringHill Suites by Marriott in Frederica and others in Rehoboth, Lewes, Fenwick Island and Ocean City, Md.
But that may mean that while the beach and the boardwalk may not be enough, other markets may be seeing success return.
“People are more open to traveling beyond the region, now that there’s options,” Real Hospitality Group Regional Director of Sales Judy Wilbur said. “Each market is very different, and we’re seeing fantastic growth in our urban markets and corporate and group travel has bounced back. But it’s been known that when the economy is not that great, people tend to rethink their travel.”
While the summer continues on, some businesses are still looking for workers. Grotto Pizza is still at 90% staffed, though Gosnear said the restaurant group relied more on J-1 visa students this year than the last, as well as asking employees from northern locations to pick up a few shifts.
Others like TKo Hospitality, which manages six hotels in Delaware and most at the beach, took a different strategy. The company opted not to bring on J-1 visa workers, citing struggles with finding housing.
“We’ve had no problems. The strategy that’s worked for us is to be an employer of choice and offer a competitive package and treat your staff well,” President Vince DiFonzo said. “We’ve had 50 staff members retained year after year.”
In his 10 years at the beach, DiFonzo said that Fourth of July was the busiest he’s seen and he believed it was because of the sheer number of people who have moved within 20 miles of the beach.
“Hotel-wise, it’s a hard economy and occupancy is flat. When it’s hard times, those who make the 10% percent of the earners, it’s not a problem, but for the bottom 60%, gas prices and groceries make it harder to sell,” he added. “We’re not getting that premium rates.”
One thing’s for sure: the shoulder season of September and October that Rehoboth and Dewey Beach have worked to develop for about a decade could still make up for the rainy days, scorching heat and high inflation.
Grotto Pizza, for example, opened a new Dewey Beach restaurant last year and it closed once September hit. This year, Gosnear said that the plan is to keep it open four days a week through October and taper off until the winter.
“Before this, we would have thought of just buttoning it up, but now the plan is to stay open until January,” he said. “There’s just been a great effect with the shoulder season.”
