Hotels rising again in Ocean City
For nearly eight years, Ocean City went without so much as a new hotel being built or one of its many existing hotels being expanded.
Boy, are those days over.
Since last year, two new hotels have opened for business, and six more projects that look to raise new buildings or construct major additions to existing hotels are in the works, said Blaine Smith, the town's assistant planning director. The mini-boom follows a lull in hotel construction dating back to the 2006 opening of the 225-room Hilton on the ocean between 32nd and 33rd streets.
"Apparently, they see from a needs assessment there is a market out there," Smith said.
The latest came before the Town Council on Monday night: an expansion of the Quality Inn with 87 units in a new tower on vacant land next to the existing hotel on 33rd Street. The project received unanimous approval after a brief discussion about curb cuts and screening its trash container.
Experts attribute the comeback of hotels in the Maryland resort to the same forces that drove them out of the market for so many years.
During the housing boom, properties that once would have turned into hotels began sprouting large condominium developments instead, Smith said. But after the nationwide real estate crash at the end of the last decade, many of those buildings struggled to find buyers for their units.
In the meantime, tourism has re-emerged from its post-recession slumber in Ocean City. From February 2014 to January 2015, hotel occupancy rose every month compared with the same month during the previous year, with the exception of March, according to the town's Department of Tourism.
It peaked in August at nearly 84 percent, records show.
"I think it's the economy as a whole," said Melanie Pursel, executive director of the Ocean City Chamber of Commerce. " People are starting to spend money a little more."
Nationally, tourism's slowdown during the recession caused developers to think twice about investing in such projects, said David Reel, president and CEO of the Maryland Hotel and Lodging Association. Ocean City hotel developers are benefiting from a loosening of banks' grip on lending, he said.
The resort is well-positioned to take advantage, Reel said, of the new normal in tourism: taking vacations closer to home to save money.
"You're seeing more and more people sitting down and looking at their budget and saying, 'We're not going to Disney World this year. We're going to Ocean City instead,'" Reel said.
Every year, 8 million tourists go to Ocean City, and dozens of hotels jockey for their business — not only with each other, but also vacation rentals.
Add to that mix the Hampton Inn that opened last year between 42nd and 44th streets and the recently opened La Quinta between 32nd and 33rd. What's more, Marriott last year began building a 150-room hotel near the midtown bridge.
Other projects in the hotel pipeline, according to Smith, include:
• A Hyatt Place at two locations along 16th Street, one on the Boardwalk and the other between Philadelphia and Baltimore avenues, for a total of 170 units. It will take the place of Sea Scape.
• An expansion of the Crystal Beach Hotel onto the Riviera Motel property at 26th Street, with 63 units.
• A new hotel called Harbor Mist that's approved for 129 units at 25th Street and Philadelphia.
• The Quality Inn expansion.
• A project that was just dropped off at the planning office, so Smith has no details available for it except that it will be at 45th Street Village.
"If anything," Smith said, "we've seen more activity than we did before because the multi-family (market) went soft."
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