Delaware’s hospitality industry sees beach boom as business travel returns
Panelists, from left: Rob Buccini – Buccini Pollin Group; Jay White, Moderator, Apex Realty; Dinaker Maylla, HVS Consulting; Drew DiFonzo, TKO Hospitality; Bill Silva, Westin; Bill Sullivan, UD Hospitality and UD Courtyard Hotel.
Delaware’s hospitality industry has been a study in contrasts over the past year.
While northern Delaware saw a continued decline in business travel and meetings Monday through Thursday, there were boom conditions at the beach.
That was one of the takeaways from a discussion about the hospitality industry at this week’s meeting of the Delaware Commercial and Industrial Real Estate Council. (IARC).
Dinaker Maylla of hospitality industry consultancy, HVS Consulting, said the industry continues to recover from a disastrous 2020 and the ups and downs caused by the pandemic in 2021.
Robert Buccini, co-chairman of hotel developer Buccini/Pollin Group, said the industry had “fallen off the cliff” for a while in 2020 when most business and personal travel came to a standstill. Another drop in business came recently when indoor masking was ordered after hospitals across the state struggled with more than 700 Covid patients. The mandate ended as the number of hospital stays and new cases fell.
William Sullivan, general manager of Courtyard By Marriott University of Delaware, said weekend leisure and wedding activities are back, but the Monday-Thursday business travel market is not. In 2021, a marriage boom has occurred, with the possibility of a brief downturn in 2022.
A big question mark is when business travel will return to normal levels, given the growing number of people now using video conferencing and other technologies.
The business market remains depressed in Wilmington, according to Buccini and Bill Silva, general manager of the Westin on the Wilmington waterfront
Wilmington sees the return of legal cases, with the Delaware Chancellery and other courts returning to in-person hearings and trials.
Maylla and Drew DiFonzo of Delaware hotel owner and developer TKO Hospitality said the Delaware beach market had a slow 2020 as visitors returned but paid discounted rates. The market took off in 2021, with business ahead of a record 2019 as room rates rose.
accommodation properties have also appeared in the fast-growing Middletown area of New Castle County.With an ability to attract higher rates during an extended tourist season and a booming year-round population, new hotels are springing up near Delaware beaches. New Castle County also saw new hotels in Wilmington’s waterfront area before the pandemic hit. New
Kent County has experienced an absence of new hotel construction. Ground is set to break this month for a new hotel in Frederica south of Dover and close to the DE Turf outdoor grounds complex. DE Turf attracts traveling youth sports tournaments on weekends, with few rooms available in the immediate area.
Up north, Wilmington was able to host a women’s varsity basketball tournament this month that helped fill venues at a slow time of year. The Biden presidency and its bimonthly President and First Lady at their home near Greenville are filling Wilmington halls with media, staff and security guards.
Still, the industry faces more than a few challenges as the economy recovers.
Buccini said the industry had learned lessons from the pandemic, an example working with leaner staff. Sullivan noted that daily room cleaning for those staying more than one night is less common.
Other challenges include inflation driving up food costs at full-service hotels that can rise by double digits overnight, Buccini noted.
The labor shortage remains a permanent headache, according to the panelists.
A location with its pros and cons comes with younger guests looking for everything from a small budget room to a memorable experience and unique amenities
This has led to a growth in “boutique hotels” which will include a small property opening this summer in downtown Wilmington.
The hotel will include an upscale steakhouse and possibly a rooftop bar.
A sore point for the industry is what is seen as a lack of fairness when it comes to the tourist tax, panelists noted.
To date, app-based owners of Aairbnbs and Vrbo properties do not pay the tax, even though many of their properties essentially operate as unregulated hotels.