Rehoboth Beach Approves 3 Hotels in Tourism Surge

The Rehoboth Beach Planning Commission approved two major hotel projects on July 24, 2025, capping a wave of development along Delaware's prime beachfront. The Belhaven Hotel, a four-story mixed-use building at 2 Rehoboth Avenue, will feature 105 rooms, first-floor commercial space and an underground parking garage accessible from Wilmington Avenue. Property owners John and Alex Papajohn secured approval with 10 conditions attached to the revised site plan.

Separately, the 55-room Atlantic Crowne Hotel earned unanimous backing at the same meeting. This four-story property on Baltimore Avenue, adjacent to the Atlantic Sands Hotel, includes a ground-level restaurant, bar, outdoor dining patio and underground parking. Meanwhile, the One Rehoboth Avenue Hotel project, first approved in January 2025, advances toward a September construction start after a second site plan amendment on April 24. Owned by One Rehoboth Avenue LLC—a partnership of Grotto Pizza and Pennsylvania's Onix Group—the four-story boardwalk-spanning hotel offers 60 rooms atop retail and restaurant space, with 62 parking spots, a pool and 57,705 square feet total excluding the garage.

These projects replace aging landmarks like Grotto Pizza on the boardwalk, Sirocco Hotel, former Dolle’s Candyland and Kohr Bros. Frozen Custard at One Rehoboth, sparking barricades and demolitions along Rehoboth and Baltimore avenues. City officials project the additions will boost tourism, with Rehoboth's boardwalk evolving to meet demand for beachfront rooms amid a coastal visitor surge.

As Delaware's summer economy hums, the developments face mixed local reactions, balancing economic gains against neighborhood concerns over height, traffic and character. Construction timelines hinge on final permits, with the One Rehoboth team targeting fall groundbreaking.