Number of rooms rises, as does competition for people to occupy them
(July 12, 2019) How to fill the ever-expanding stock of hotel rooms in light of the increasing popularity of online short-term vacation rental sites, dominated a Tourism Commission discussion this week about putting more heads in beds.
Councilman Matt James, who chairs the commission, opened the latest review of the Tourism Strategic Plan’s top five long-range goals as part of a process that began in February. The plan is to be updated by 2021.
The focus during the commission meeting on Monday was goal four: expanding tourism.
Susan Jones, executive director of the Ocean City Hotel-Motel-Restaurant Association, said the growing number of lodging options appears to be affecting room prices.
“There’s been some rate wars going on so far in … season because of the inventory,” she said.
To further tilt the scales in the wrong direction, Jones said online rentals continue to grow in popularity.
Judging by online traffic for hotel and motel websites compared to short-term rental platforms, such as VRBO and Airbnb, Jones said traditional lodging options appear to be losing market share.
“It’s really shifting in what visitors are looking for, which is why we have to be so cognitive about making sure we collect the [room] tax,” she said.
Greater Ocean City Chamber of Commerce CEO Melanie Pursel said many online short-term rental platforms are pursuing high dollar national advertising campaigns.
“It’s every other commercial,” she said.
To make matters worse, Jones said, other online sites are expanding to include short-term vacation rentals.
“Now Booking.com and Expedia do the vacation rentals on their sites, which used to … just be the hotels and motels,” she said. “It’s too many options.”
Councilwoman Mary Knight inquired about the approaches Jones’ organization is taking to address the short-term rental trend.
Jones said she would be providing testimony to the Worcester County Commissioners the following day as they begin work to revise room tax regulations for unincorporated sections of the county.
“There’s not a whole lot we can do in terms of what Booking.com is putting on their site,” she said. “How do you convince the visitor to do a hotel instead of a vacation rental?”
Ultimately, the pressure to market services and amenities falls on the individual lodging establishments, Jones said.
Knight said an increasing number of negative reports from consumers have been surfacing on online rental platforms.
“I’m starting to read about people having bad experiences with these short-term rentals,” she said.
Jones said lobbying efforts are underway to establish increased federal oversight.
“The American Hotel and Lodging Association is trying to go to Congress to say there needs to be more [federal] rules over that industry, rather than just locally,” she said.
Pursel, maintaining that experience is key, said hotels typically provide a level of service not usually found in short-term rentals.
“We have such a transient workforce it’s really hard to keep providing that level of service,” she said.
To that end, Pursel is working with Jones to produce a video employers can show new staff in hopes of elevating the guest experience.
Tourism and Marketing Director Donna Abbott said her department is working with MGH Advertising to develop an anonymous end-of-season survey to poll hoteliers regarding booking trends this summer.
“What we’d like to do is see is how early the bookings are coming in,” she said.
Jones suggested timely data should be available through online rental platforms.
“We should talk to Booking.com and Expedia, because they always give information at the beginning of the season on the trends,” she said. “In the spring, they said it was a 20-hour window of people coming down when they were searching Friday.”
The talks about expanding tourism also turned to a review of the opening rounds for Ocean City’s newly launched sports marketing study.
Commission Chairman Matt James said Crossroads Consultants, who produced a comparable study for the Worcester County Commissioners, just wrapped up an initial round of interviews.
“I think they’re trying to figure out exactly what we’re looking for so they can include that in their study,” he said.
James said an update on the study is likely this fall.
Knight said it could take a tick longer
“It takes them probably 4-5 months to do it,” she said.
Carousel Group managing partner Michael James said his conversations with Crossroads representatives has him wondering if proximity issues are being downplayed.
“I didn’t really think those people understood our industry,” he said. “If you put the … ball fields south on 113, you’re really not really helping Ocean City.”
Michael James said if a sports tournament facility is built beyond a short distance from the resort, the financial benefits would be experienced elsewhere in the county.
“You’re going to have new hotels and restaurants in Ocean Pines and Salisbury,” he said. “They just didn’t seem to understand that.”
Michael James said sports fields south of Berlin would not bring Ocean City the revenue boost it wants.
Knight said unlike the Crossroads sports marketing study done for the county commissioners and which assessed the situation countywide, the current effort is specified for northern Worcester.
“I think they heard that message very strongly,” she said.