HVS Hotel Market Report - Iconic Resort Destination Ocean City, MD Is Poised for Success - By Michael Lambdin and Scott Killheffer

Ocean City, Maryland, a perennial draw for travelers along the Eastern Seaboard, continues to solidify its reputation as a leading resort destination. Ocean City is known for its expansive beaches and its boardwalk and welcomes millions of visitors annually. This robust tourism industry fuels a thriving hospitality market, and recent strategic investments underscore Ocean City's focus on providing exceptional experiences for a range of visitors.

The market’s hospitality sector is experiencing a dynamic transformation. Two beachfront resorts have recently undergone complete makeovers. First, the former Fontainebleau Resort debuted as the Ashore Resort & Beach Club in May 2023. This reimagined resort offers 250 renovated guestrooms, inclusive of 15 suites, and a selection of onsite dining outlets, including The Tide Room and Wahoo Beach Bar. Additionally, the Dunes Manor Hotel was rebranded as the Hilton Garden Inn Ocean City Oceanfront in the late spring of 2023 following a comprehensive renovation of its 170 guestrooms, public spaces, and exterior.

According to local economic development officials, further hotel improvements are expected in the near future; most notably, Margaritaville Hotels & Resorts announced plans in early 2023 to build the Margaritaville Beach Resort Ocean City. The plans for this resort have undergone various changes following community feedback, reducing the hotel’s footprint and guestroom offerings. However, a Margaritaville Resort is anticipated to bolster this popular resort destination.

Ocean City's commitment to enhancing the visitor experience extends beyond its hotels. Construction commenced in April 2023 on the Downtown Recreation Complex, a $2.7-million facility anticipated for completion by the summer of 2024. This complex promises to become a vibrant hub for residents and tourists, further solidifying Ocean City's position as a leading destination with experiences catering to a wide range of demographics.

Year-end 2023 performance metrics from STR indicate that Ocean City’s lodging market is performing above pre-pandemic levels in both occupancy and ADR, following a swift recovery. Market forecasts indicate that occupancy and ADR will remain above pre-pandemic levels for 2024, supported by the hotel and leisure-related developments.

Our work within local markets empowers us to conduct primary interviews with key market participants. This approach ensures we obtain real-time insights and current data for each market we operate in. For more information about the Delmarva Peninsula market, inclusive of Ocean City, please contact Scott Killheffer or Michael Lambdin.

About Michael Lambdin

Michael Lambdin is a Consulting and Valuation Project Manager in the HVS Philadelphia office. He graduated from the University of Delaware in May 2022 with a Bachelor of Science in Hospitality Business Management. Before joining HVS in 2022, Michael obtained hotel and restaurant experience with Harry’s Hospitality Group in Wilmington, Delaware, and with the University of Delaware as an Aramark Scholar. Contact Michael at (302) 377-9336 or mlambdin@hvs.com.

About Scott Killheffer

Scott Killheffer, a Senior Vice President with HVS, oversees the Philadelphia office. He manages and performs consulting work thorughout the Northeastern U.S. Scott earned a BS in Hotel, Restaurant, and Institutional Management from the University of Delaware. Contact Scott at +1 (302) 897-9393 or skillheffer@hvs.com.