OCEAN CITY — Peak hotel occupancy in Ocean City and Cape May County is about 75 percent, with room numbers remaining flat across all three regions of New Jersey.
That’s what was found by the Boardwalk Subcommittee, which has been charged with examining the commercial zone and delivering a report to City Council. The board held its first public information session Feb. 7.
What’s driving this work is the closing of Wonderland Pier at Sixth Street in mid-October 2024 and the uncertainty that creates on the north end of the commercial zone.
Property owner Eustace Mita has proposed building an eight-story, 252-room hotel at the beachfront site, sparking 14 months of meetings during which the developer failed to get the large lot deemed an area in need of rehabilitation, a move that would have let him get around current zoning that prohibits a hotel. He has argued Ocean City needs more hotel rooms.
Subcommittee Chairman Dave Winslow discussed accommodations, including hotels, motels, condo hotels, bed and breakfast inns and other forms.
The data was divided among three zones — Atlantic City, South Shore (including Ocean City) and North Shore — and shows room inventory relatively flat with a slight decline from 2016 to 2025.
Meanwhile, occupancy rates for 2024-2025 showed 44.5 percent in Atlantic City, 43.5 percent in South Shore and 43.2 percent in North Shore. The summertime peak across all three markets was 75 percent.
“There’s not really a lot of growth in occupancy in the hotels,” Winslow said. “Do we have enough hotel rooms or do we need more?”
The board then looked at upcoming projects and found that about 1,500 rooms are in some phase of development across the New Jersey shore.
As of 2025, the state’s shore market had 580 hotel properties with 45,000 rooms. Of those, 19,000 were upscale and upper midscale, 14,000 were midscale and economy and 13,000 were luxury and upper upscale.
About 75 rooms are currently under construction while 456 more are proposed and 1,096 are in the final planning stages. Data show there is more interest in upscale, as the vast majority of those being planned are in that price range.
Luxury and upper upscale hotels are accommodations such as the Mandarin Oriental, the Four Seasons and Ritz Carlton, while upscale are Hiltons and Marriotts. Midscale includes such brands as Holiday Inn.
The subcommittee also looked at staying trends, finding that demand for luxury and upper upscale rooms dropped from 2015 to 2025, while upscale, upper midscale, midscale and economy all remained flat.
Ocean City has 27 hotels of the 271 in Cape May County and 1,216 of the total 11,324 rooms. Rooms countywide are mixed, with 38 percent upper midscale/upscale, 36 percent economy/midscale and 26 percent upper upscale/luxury.
The subcommittee also looked at coastal accommodation trends, finding that the Mid-Atlantic Region is experiencing a resurgence in coastal resort trends with a strong emphasis on waterfront properties and luxury experiences.
“Resorts are increasingly focused on waterfront locations, stunning views, easy access. That’s pretty obvious, but that’s a good thing because we have all that here,” Winslow said.
Data show tourists are looking for family-friendly amenities and luxury dining experiences.
“We’re a little bit hampered because we do not have alcohol here, but nonetheless, you can do luxury dining without alcohol,” Winslow said.
Tourists also are looking for community engagement.
“Many resorts are now deeply rooted in the communities they serve, offering a sense of drama and place that separates them from the rest,” he said.
“These trends reflect a growing appreciation for the natural beauty and cultural richness of the Mid-Atlantic Region, making it an ideal destination for travelers seeking a coastal retreat,” Winslow added.
Economic indicators
The island’s business organizations, all of which have expressed support for Mita’s hotel plan, say their members are losing money without the draw of the longtime family favorite anchoring the end of the business zone.
The subcommittee looked at data such as parking revenue and beach tag sales to determine the extent of the loss.
“That is an indication of how busy the boardwalk is,” Winslow said, noting there was a significant drop in 2025 following the park closing.
He said one reason is that last June’s weather was inclement, keeping visitor numbers down.
“It was very rainy; it wasn’t a real nice month,” Winslow said.
Data show revenue dropped from $2.416 million in 2024 to $1.955 million in 2025, while the number of filled parking spots fell from 131,995 to 110,316 over the same time period. That data includes the loss of 41 spots to 933.
The chairman said the Fifth Street lot, the most northerly of the eight in the city and the closest to Wonderland, “showed a huge decrease.”
“Parking is somewhat an indicator of business volume,” Winslow said, noting the Fifth Street lot revenue was down by 40 percent.
“If you spend a lot of time on the boardwalk like I do, you’ll notice volume is not there at that end of the boardwalk,” he said. “Obviously, we need to do stuff. This little place will need to reimagine what that’s going to look like.”
Beach tag revenue also dropped from $6.237 million in 2024 to $5.9 million in 2025, a loss of 4.88 percent. That was partially attributed to the poor weather of June and partially to the beach suffering erosion. Calculated by volume, the city sold 336,895 tags in 2024 and 309,142 in 2025, a difference of about 8 percent.
– STORY and PHOTOS by CRAIG D. SCHENCK/Sentinel staff
