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Beach hotel market bounces back with high demand for ‘vax-cations’

Katie Tabeling

REHOBOTH BEACH — Back when the uncertainty of the coronavirus pandemic hovered over Delaware’s beach towns, the hope was that the summer of 2021 would see a crush of tourists return.

When it comes to the hotel and home rental market, that prediction came true.

“It’s absolutely true. The Bellmoor closed its best April in history and we just closed our best May in history in terms of occupancy. It’s about 20% more than the same time span last year,” said Ben Gray, the Bellmoor general manager and overseer of EOS Delaware properties. “We’re seeing people from all over the Mid-Atlantic region ready to take their vax-cations.”

As of Memorial Day weekend 2021, Rehoboth Beach and Dewey Beach hotel bookings are on tack with what was seen pre-COVID-19. Time will tell if this summer continues to be the biggest one yet. | DBT CHART BY E. THOMAS SIMPSON

Inspired by eased mask requirements and easy access to vaccines, there were 3,147 hotel rooms booked in Rehoboth Beach and Dewey Beach hotels on the rainy Memorial Day weekend, according to recent accommodation data collected by the Rehoboth Beach-Dewey Beach Chamber of Commerce.

By the numbers, it’s slightly down from Memorial Day weekend in 2019, which counted 3,265 rooms booked. That same holiday weekend in 2020, when Delaware had yet to enter Phase 1 reopening, had 248 rooms booked, even on a perfect sunny weekend.

Trends for the 2020 summer season started to pick up when the state started gradually reopening, but hotel bookings trailed behind 2019’s record numbers due to the cancellation of firework shows and festivals, and surrounding states putting Delaware on travel advisory lists.

The Bellmoor Spa and Inn at Rehoboth Beach is down roughly 30% of its staff, while facing a boom in room bookings for people looking to get out and enjoy a post-pandemic vacation. | DBT PHOTO BY MARIA DEFORREST

Momentum for Delaware beaches’ potentially biggest summer yet may have been building come early fall. Vince DiFonzo, president and chief operating officer of TKO Hospitality that manages the Hyatt in Dewey Beach and the Surf Club Oceanfront Hotel, said the leisure market started to pick up in 2020.

“Nationally, we were seeing families go to these drive-to destinations so they could work and have their kids remote learn in a different place. Once they were done, they could go out and enjoy the scenery and find things to do,” said DiFonzo, who serves on the Hyatt’s Brand Advisory Board. “That laid the groundwork for the busiest summer I’ve ever seen, especially since people are still a little leery about international travel.”

While the data on Rehoboth Beach and Dewey Beach hotel accommodations don’t show 2020 off-season booking trending any higher than 2019, it may be because visitors opted to stay in home rentals. Jack Lingo’s Rehoboth and Dewey Beach had 465 rentals between October 2020 and April 2021 — a 60% jump from October 2019 to April 2020.

“Our rentals range from efficiency apartments to 12-bedroom homes, it can go from $700 to $1,800 per week,” said Kristina Lingo, rental manager at Jack Lingo’s Rehoboth Beach office. “People are staying longer; we’re seeing people stay two to three weeks if they can. People were a little hesitant before, but we started to see bookings come in October.”

As Delaware and the nation propels out of the economic shutdown, the First State’s resorts may find ample opportunity to market itself for “flexcations,” or where people rent space for a week to work but enjoy what the Delaware beaches have to offer.

Throughout last year, Southern Delaware Tourism had been focusing on the drive-to markets within a three-hour drive with campaigns enticing people to “change their point of view.” Advertisements online featured a beach view from a hotel room, and Southern Delaware Tourism Executive Director Scott Thomas credits them with being able to hold the line in terms of occupancy rates.

“A lot of the forces behind the extended season were long at work before COVID-19, like festivals and the Sussex County Heritage Tours,” Thomas said. “But we saw a lot more appeal in the outdoors for our first-time visitors, and that may be what brings them back a second time.”

Thomas said the unprecedented demand in Delaware’s beaches may continue until Thanksgiving at this rate, and messaging may start to return to larger markets like in Ohio and New England.

“Before, marketing had different messages for early spring and the summer and fall to early winter,” he added. “Maybe it’s time to start thinking of this through the lens of four seasons.”

The 112-room Bethany Beach Ocean Suites was built about five years ago, and stands out as one of the few hotels in Bethany Beach. It was bought by EOS Investors for $32 million. | DBT PHOTO COURTESY OF BLUEWATER DEVELOPMENT CORPORATION

Ahead of what could be the busiest summer since right after 9/11, Delaware’s beach businesses will still have to contend with finding enough staff to handle high demand. Gray said that the Bellmoor, Bethany Beach Ocean Suites, and the Holiday Inn Express Bethany Beach are all operating at 30% less staff. In one week, Gray had 11 people scheduled for interviews not show up. 

DiFonzo said TKo Hospitality hotels in Delaware and Ocean City, Md., are 20% understaffed. In response, TKo has started working with third-party vendors to staff up while offering referral and signing bonuses and raising wages. 

In the past two years, DiFonzo said wages at TKo Hospitality have gone from $11 an hour to $15 an hour.

“I don’t think this is going to change until September, when the state and federal unemployment drop off. It’s going to be a hard summer,” DiFonzo said. “You have to take care of your team, reward them, and constantly remind them not to burn them out.”

Despite a rosy outlook when it comes to demand, it’s still unclear if it will generate enough revenue to make up for hotels’ shortfalls in 2020.

“It’s a pretty aggressive prediction, but we’ll work to achieve it,” said Gray, who chairs Southern Delaware Tourism. “The hotel market, particularly the Sussex County one, is resilient and we are ready to see the results.”

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