(Editor’s Note: The following is the first in a three-part series on the hotel boom that is happening in and around Ocean City. Next week, we’ll explore how the West Ocean City landscape is in the midst of a major change with the addition of several chain hotels along Route 50.)
OCEAN CITY – There will soon be a lot more beds for tourists to lay their heads as Ocean City is currently experiencing its largest hotel boom in years.
“This is the time of hotels,” said Jeff Thaler, Director of Development for Atlantic Planning Development and Design. “Everything has a time and eventually things run out of time. First it was condos, and before that it was big T-shirt shops and bayfront restaurants. This is definitely the largest hotel boom we’ve seen in a long time in Ocean City.”
Up and down Ocean City’s Coastal Highway, and even along West Ocean City’s Route 50 corridor, you can see that the area is in the midst of another growth spurt, or at the very least, a significant makeover.
Thaler says even before the condominium boom in Ocean City that began in the early 2000’s and abruptly ended when the housing bubble burst in 2007, big name brand or flag hotels were interested in coming to Ocean City, but the price of land was much too high.
Now, after a grueling recession, and a slow rebound, land prices have fallen to a much more reasonable price. Thaler says the big brand hotels aren’t just coming to town; many of them are already here.
“This past summer, Hilton hotels alone had 40,000 unfulfilled requests for rooms in Ocean City in a 120-day stretch,” said Thaler. “That means, in their speak, they needed at least three more hotels in Ocean City. And since there are no secrets in the hotel world, if the Hilton knows that, then Marriott knows that, and every other big brand hotel knows it too. They all want to put hotels here.”
Atlantic Planning Development and Design has a hand in projects that account for at least 425 rooms that are either being built or have been recently finished, including 150 rooms at the Residence Inn and Suites by Marriott being built just south of the Route 90 Bridge in the former OC Health and Racquet Club parcel. In addition, the company is working on the five-story, 100-room Home 2 Suites by Hilton on 67th Street between the new Midtown Center and Sunset Island, and another unnamed brand hotel project on 25th Street.
“I think many people would look at the success of the Hilton Oceanfront Suites [32nd Street] as the spark of this little boom or surge, but in my mind, the success of the Hampton Inn, which opened in 2011, was the big indicator to these flag hotels that you could have a hotel on the bayside and do very well in a seasonal economy like Ocean City,” said Thaler.
‘The Old Model Is Gone’
In 2007, Lauren Taylor and her brother, Edmund Conner, were poised to redevelop their family-operated Santa Maria motor motel on 15th Street into condominiums.
But since the condominium market had become so oversaturated, Taylor knew a different approach would likely prove more profitable.
The result was Ocean City’s first Courtyard by Marriott hotel.
She believes this current surge in hotel construction will continue and is aptly timed to help Ocean City appeal to the ever-changing wants and needs of hotel guests.
“The old model is gone,” said Taylor. “We used to staff our office on Jan. 1 because people were literally calling us with cash in hand, ready to put down deposits for a week vacation in July. That lifestyle is just non-existent today. People wait until the last minute, watching the inventory of hotels on the Internet and wait to pounce on the best deals.”
Taylor says the big flag hotels have certainly done enough feasibility studies to know that Ocean City is an good place to invest, despite its tertiary or secondary market designation.
“We aren’t a small town anymore, we have become more like a metropolis,” said Taylor. “We certainly want to offer that feel to people when they come here, but you can’t call the state’s second largest city in the summer months a small town anymore.”
All stages of redevelopment are probably the most noticeable in midtown Ocean City, according to Taylor, who points to the close proximity to amenities like amusement parks, the convention center and even the Boardwalk. Newer hotels, like the 101-room La Quinta on 32nd Street, are probably the most noticeable when trying to find examples of this hotel surge, but if you look around the surrounding blocks from these newer establishments, you’ll see businesses spending money to expand or renovate, and in other cases, new businesses have replaced ones that had struggled for years.
“If you don’t have an economy that is investing and re-investing in itself, you are in serious trouble,” said Taylor. “It’s exciting what is happening right now. If you were to drive through town for the very first time, I think you’d be much more impressed by the town’s aesthetics than maybe you would have been a few years ago. The downtown looks much cleaner and some of the dilapidated buildings are being brought down and redeveloped.”
Is It All Positive Growth?
While the growing number of construction sites might be a sight for sore eyes to some in the region, others may be seeing the raising of each new “flag hotel” as another nail in the coffin for their longstanding mom-and-pop hotel business.
“I think the question we need to be asking about some of the smaller hotels is ‘are they really losing market share?,’” said Thaler. “Many of the smaller mom and pop or ‘bedspread’ hotels did very well this year, but they do have a hard time competing with an Internet customer that wants brand recognition, wants to use their ‘points,’ and wants amenities that the older hotels don’t have, and they want it all at the lowest possible price.”
Thaler and Taylor agree while the hotel renaissance is very much evident in midtown Ocean City and the Route 50 corridor, it is likely to spread to downtown and uptown Ocean City sooner than later.
“It’s already starting to happen,” said Taylor.