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.
The Delaware hotel industry has been a study in contrasts during the past year.
While northern Delaware saw a continued slump in Monday through Thursday business travel and meetings, there were boom conditions at the beach.
That was one of the findings coming from a hotel industry discussion at last week’s meeting of the Commercial-Industrial Realty Council of Delaware. (CIRC).
Dinaker Maylla from hotel industry advisory firm, HVS Consulting, said the industry is continuing to recover from a disastrous 2020 and the pandemic-driven ups and downs in 2021.
Robert Buccini co-president of hotel developer Buccini/Pollin Group said the industry went “off the cliff” for a time in 2020 when most business and personal travel stopped. Another drop-off in business occurred recently when indoor masking was ordered after the state’s hospitals struggled with more than 700 Covid patients. The mandate ended as the number of hospital stays and new cases plunged.
William Sullivan, managing director of the Courtyard By Marriott University of Delaware, said the weekend leisure and wedding business has returned, but not the Monday through Thursday business travel market. During 2021, a wedding boom occurred, with the possibility of a brief slowdown 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 technology.
The business market remains depressed in Wilmington, according to Buccini and Bill Silva, general manager of the Westin on Wilmington’s riverfront
Wilmington is seeing the return of the legal business, with Delaware Chancery and other courts moving back to in-person hearings and trials.
Maylla of HVS and Drew DiFonzo, of Delaware hotel owner and developer TKo Hospitality, said the Delaware beach market saw a sluggish 2020 as visitors returned, but were paying discounted rates. The market took off in 2021, with business ahead of a record-setting 2019 as room rates rose.
With an ability to attract higher rates in an extended tourist season and a surging year-round population, new hotels are springing up near Delaware beaches. New Castle County also saw new hotels in the Wilmington riverfront area before the pandemic hit. New lodging properties also appeared in the fast-growing Middletown area in New Castle County.
Kent County has seen an absence of new hotel construction. Ground was broken this week a new hotel in Frederica south of Dover and near the DE Turf complex of outdoor fields. DE Turf has been attracting traveling youth sports tournaments on weekends, with few rooms available in the immediate area.
To the north, Wilmington was able to host a women’s college basketball tournament this month that helped fill rooms at a slow time of the year. The Biden presidency and his twice-monthly of the president and First Lady to their home near Greenville fill up rooms in Wilmington with media, staff, and security people.
Still, the industry faces more than a few challenges as the economy recovers.
Buccini said the industry learned lessons from the pandemic, one example operating with a leaner staff. Sullivan noted that daily housekeeping of rooms for those staying more than one night is less common.
Other challenges include inflation which is driving up the food costs at full-service hotels that can go up by double digits overnight, Buccini noted.
The labor shortage remains a continuing headache, according to panelists.
A situation with its pluses and minuses comes with younger customers who seek everything from a smaller budget-friendly room to a memorable experience and unique amenities
It has led to growth in “boutique hotels” that will include a small property that will open this summer in downtown Wilmington.
Included in the hotel will be a high-end steakhouse and perhaps a rooftop bar.
One sore spot for the industry is what is viewed as a lack of fairness when it comes to the room tax, panelists noted.
To date, app-based landlords of Aairbnbs and Vrbo properties do not pay the tax, even though many of their properties essentially operate as unregulated hotels.