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New hotels welcome at beaches as visitation grows

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A new Home2Suites Hotel off Route 1 at Five Points opened last year amid a spate of new hotel development near Delaware beaches.

A new Home2Suites Hotel off Route 1 at Five Points opened last year amid a spate of new hotel development near Delaware beaches. | DBT PHOTO BY JACOB OWENS

In the coming years, downtown Rehoboth Beach will boast hundreds more hotel rooms for guests clamoring for an ocean view experience, joining the slew of other accommodations popping up throughout Delaware’s coastal region. But will all of these new and newly renovated lodging options lead to too many empty rooms?

Those who are tracking visitation in the area and proposing the new projects emphatically say no.

“Barring some financial situation with the economy, as long as we’re continuing to grow, they do their feasibility studies and they know what the market can take,” said Carol Everhart, president and CEO of the Rehoboth Beach-Dewey Beach Chamber of Commerce. “We’re continuing to grow with visitation in this area. So is it needed? By all accounts, yes.”

Recent years have seen new southern Delaware hotel projects including the Home2 Suites by Hilton near Lewes, the new Microtel Inn hotel near the Rehoboth outlets and the Fenwick Shores Tapestry Collection by Hilton, among others farther north and west. Projects on deck include the Atlantic Crowne and Belhaven hotel projects in downtown Rehoboth Beach, as well as renovations to the Bethany Beach Ocean Suites Residence Inn by Marriott farther south.

Last summer, weekend hotel occupancy throughout Sussex County hovered at 92%. The lion’s share of hotel rooms are in the Rehoboth area, Southern Delaware Tourism Executive Director Scott Thomas said.

Summer weekday occupancy for the entire county was closer to 77%, which is where Thomas predicted future years may see some impact as the number of rooms continues to grow. 

“It’s the mid-week that will be interesting to see what happens there,” Scott said, noting that travel trends have indicated that accommodations in the luxury market will likely fare well, but those below it may see some pressure when it comes to rates as inventory expands. “From a destination standpoint, having more choices, especially in a desired location, that’s a good thing for the consumer — and more for us to market.”

Thomas said Sussex County’s hotel occupancy numbers from summer 2022 eclipsed those of a pre-pandemic summer of 2019 — a year that saw an estimated 10 million-plus visitors just in the Rehoboth area, according to traffic statistics collected and shared by the Rehoboth Beach-Dewey Beach Chamber of Commerce.

For Alex Papajohn, president of the company overseeing the planned Belhaven Hotel project on Rehoboth Avenue in downtown Rehoboth, those visitation stats indicate that there’s plenty of room for, well, more rooms.

“In my view, downtown Rehoboth Beach is in need of revitalization and the current supply of hotel rooms is quite low compared to the number of visitors every year,” he said. 

The Belhaven would add more than 100 rooms to that supply, albeit no sooner than May 2025.

Gene Lankford, who’s behind the nearby Atlantic Crowne hotel project on Baltimore Avenue, said he’s just working in a different kind of market, one where people are clamoring to see expansion.

“The town, I think, needs to get busy and build some accommodations and give folks some really nice choices for staying in town instead of on the highway and facing all that traffic,” he said. “I think our occupancy has increased over the last few years, indicating more and more people are coming to town. If that continues, we’re certainly going to need more hotel rooms.”

 

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