New Inventory, Short-Term Rentals Ramp Up Hotel Competition

OCEAN CITY — While Ocean City and Worcester County continue to grapple with the short-term rental conundrum, it appears a glut of new hotel rooms in the resort has ramped up the competition.

During Monday’s Tourism Commission meeting, members discussed the section of the tourism strategic plan related to increasing hotel and motel occupancy during the season and throughout the year. Inevitably, the discussion came around again to the impact of growing short-term rental platforms such was Airbnb and VRBO, for example, on traditional hotel and motel vacation bookings.

For over a year, Ocean City officials have been monitoring the proliferation of short-term vacation rentals in the resort brokered by on-line platforms and its impact on traditional hotel and motel occupancy. Perhaps a larger issue is the spike in hotel room inventory in Ocean City with several significant lodging establishments opening this year and others moving closer to completion.

Mid-week dates continue to present challenges, especially with a glut of new hotel rooms coming on line along with the growing short-term rental market. Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones said this week the result is an increase in competition among the resort’s hotels.

“There are some rate wars going on now because of all of the new inventory,” she said. “I think it’s also the short-term rentals. That has increased drastically. Sure, there are a thousand new hotel rooms, but there is a shift in what visitors are looking for.”

Greater Ocean City Chamber of Commerce Executive Director and CEO Melanie Pursel agreed the short-term rental market is gaining much more attention. All one has to do is flip around the television channels to see a plethora of national ads pushing short-term rentals, she said.

“There’s a national ad blitz going on,” she said. “You see it all over the place. Now, sites like and Expedia are advertising them.”

In Ocean City, the concern has largely been on two fronts including the apparent lack of room tax collection on the one hand, and the sanctity of the neighborhoods in which short-term vacation rentals are located.   Airbnb, VRBO and similar Internet sites enable property owners to rent homes, apartments and even single rooms to visitors searching for accommodations by bypassing the traditional rental companies. Just as Uber has transformed the public transportation industry, Airbnb, VRBO and similar companies have rocked the traditional rental industry with millions of available vacation accommodations in thousands of cities across the U.S. including Ocean City.

Resort officials for months have been exploring ways to monitor and regulate the short-term vacation rental market locally with more scrutiny on room tax collection and business license acquisition, for example. Just last week, the Worcester County Commissioners debated tighter short-term rental policies to address the growing issues in West Ocean City for example. Jones said resort tourism officials need to remain vigilant.

“We’re going to make sure our voices continue to be heard,” she said. “We want to make sure we have a level playing field.”

There was also some discussion about the level and quality of service a traditional hotel or motel provides to guests as opposed to the private short-term rentals. Pursel said traditional hotels need to market that aspect.

“Promote that hotels provide a higher level of service,” she said. “That’s what the lodging associations have to market in order to remain competitive.”

About The Author: Shawn Soper

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Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.