Hotel boom coming to Lewes, Rehoboth area

Two under construction, seven more on the drawing board
April 30, 2019

Nine proposed hotels in Rehoboth Beach and Lewes would increase the number of hotel rooms in Sussex County by nearly 20 percent. If all the projects are constructed, about 800 new rooms would be added to the existing inventory of 4,220 rooms at more than 80 hotels and bed and breakfasts in Sussex County.

More than 60 hotels and bed and breakfasts are located in the resort area in and around Lewes-Rehoboth Beach-Dewey Beach, with nearly half in the Rehoboth area. The occupancy rate has ranged between 80 and 85 percent over the past few years.

Two hotels currently under construction include Home 2 Suites by Hilton at Five Points Square behind PNC Bank near Lewes and the 93-room Holiday Inn Express at Midway behind Midway Galleria near Rehoboth Beach. Both have nearby access to Route 1. The 60,000-square-foot Home 2 Suites by Hilton will offer 110 rooms and 920 square feet of office space.

Other proposed hotels include:
• Lewes Hotel – 96 rooms, Marsh Road and Route 1, Lewes.
• Bayshore Plaza – 71 rooms with retail space on Route 24 across from the Beebe outpatient center between Lewes and Rehoboth Beach.
• Parsonage Road, Route 1 near Rehoboth Beach – 60 rooms.
• Belhaven Hotel – 120 rooms with retail and restaurant-related space, 2 Rehoboth Ave., Rehoboth Beach.
• Rehoboth Grand – 90 rooms, 330 Rehoboth Ave., Rehoboth Beach.
• Atlantic Crown Hotel and Suites and Retreat – 40 rooms and a restaurant, 17, 19 and 21 Baltimore Ave., Rehoboth Beach.

Two more hotels are proposed on opposite sides of Holland Glade Road near Rehoboth Beach. One is proposed behind Tanger Outlets Seaside and the other as part of Phase 2 of the Coastal Station project.

The three proposed Rehoboth Beach hotels are under review by Rehoboth Beach officials. Plans for the remaining four hotels in unincorporated Sussex County have not surfaced yet in the Sussex County land-use process or have not yet received final approval.

Other new hotels are planned in Georgetown, Millsboro, Milford and Fenwick Island.
Rehoboth Beach-Dewey Beach Chamber of Commerce President and CEO Carol Everhart said one of the contributing factors for the growth in hotel construction is the beach area's trend to establish itself as a year-round destination. “We continue to grow in popularity. It's the beach plus all the activities and tax-free opportunity that are the major draws,” she said.

William Pfaff, director of Sussex County economic development, said many of the planned hotels are national chains that offer a central reservation system and points for each night's stay. “I think that's how consumers are thinking today,” he said. “National branding has a lot to do with it, and of course, more and more people are coming here all the time.”

Pfaff said some local hotels close in the winter but the national chains will remain open all year, which opens up more opportunities for national-chain hotels.

He said the growing area sports complexes draw thousands to the area during the spring, summer and fall.

Sports at the Beach in Georgetown and DE Turf Sports Complex in Frederica have a trickle-down effect to hotel stays in eastern Sussex. Sports at the Beach offers a series of baseball tournaments, as well as pickleball in its indoor facility. DE Turf offers leagues and tournaments in a variety of sports, including soccer, field hockey, lacrosse, rugby and flag football.

Another sports complex, Sandhill Fields in Georgetown, is under construction.

Big ticket item for Sussex
Tourism is big business in Sussex County, generating nearly $2 billion to the economy and providing more than 18,000 jobs – 16 percent of the county's total workforce. Tourists spend more than $1.4 billion on lodging per year in the county. They also spend $309 million on food and beverages, $224 million on shopping, $77 million on entertainment and $36 million on transportation.

Top reasons for visiting
Dining out
Going to the beach
Museums and historic sites

Where tourists stay
Hotels/motels – 43 percent
Rentals – 27 percent
Bed and breakfasts – 9 percent
Camping – 9 percent

How long tourists stay
Weekend – 24 percent
Seven or more days – 23 percent
Day trip – 20 percent

Busiest months
August, July, June, October, May, September, April

Ages of tourists
56 to 65 – 31 percent
Over 65 – 27 percent
46 to 55 – 23 percent

Where tourists come from
Pennsylvania – 28 percent
Maryland – 17 percent
Delaware – 14 percent
New Jersey – 13 percent
New York – 8 percent
Top cities
Philadelphia – 36 percent
New York – 14 percent
Baltimore – 13 percent
Washington, D.C. – 6 percent

What tourists spend per year
Hotel and others – $200 million
Rentals – $1.2 billion
Shopping – $224 million
Entertainment – $77 million
Daily shopping – $115

Sources: Southern Delaware Tourism 2018 survey; Delaware Tourism Office

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