New Jersey Beach Towns Mix 'The Shore' With Upscale Boutique Hotels

This month marks the grand opening of the 54-room Asbury Ocean Club Hotel, which is perched on the fourth floor of a new luxury residential high-rise in Asbury Park, New Jersey. That's the revitalized seaside city that actor Danny DeVito calls his hometown and where Bruce Springsteen popped up over the weekend to play at the Stone Pony club.

On Memorial Day weekend, two other upscale hotels debuted at the New Jersey shore. The Wave Resort, with 67 rooms in Long Branch that bills itself as a beachfront boutique property that's sleek and modern without traditional nautical decor. It's owned by Kushner Cos., the real estate firm founded by the family of Jared Kushner, President Donald Trump’s adviser and son-in-law. Farther south, the 102-room Hotel LBI is now a prominent landmark at the entrance to Long Beach Island.

Luxury lodging – chock-full of amenities such as new restaurants, lavish pools, spas and rooftop bars – that appeals to discerning millennials and affluent travelers has become a fixture across America, particularly in urban areas. But such upscale boutique hotels have been slow to venture into the Jersey shore market, according to executives and analysts. The new hotels aim to shift local customs by focusing on drawing more visitors from out of state and not just in the summer.

Hospitality operators at the Jersey beach have the challenge of finding ways to keep their properties occupied in the off season. And there is a tradition in New Jersey of beach-goers, depending on their budgets, renting bungalows or beachfront mansions in the summer, or even investing in houses "down the shore," as Garden State residents say. That tempered the demand for hotels, especially upscale ones. Many of the existing hospitality properties are older motels with dated decor, tiki bars and few frills.

The boutique hotels that are sticking their toe in the water at the Jersey shore are offering high levels of services and amenities. The five-star Asbury Ocean Club Hotel, for example, will pair guests with a "beach bellperson" that "there to take care of any whim," according to the hotel. That includes setting up a guest's towels, chairs and umbrellas on the beach and bringing them cold bottles of water.

Some of the new hotels, with their higher prices, have large spaces available to cater year-round events such as weddings, birthday parties and other festivities in order to drum up business off-season as well as during the summer. In June, one of Hotel LBI's banquet rooms served as the venue for a party held by the Lighthouse International Film Festival.

And some of the new boutique hotels are targeting visitors outside the state, including Manhattanites who are weary of fighting traffic to get to the Hamptons in Long Island on weekend getaways or vacations. Asbury Ocean Club Hotel bills itself as a retreat and touts itself as "just 70 minutes away" from New York City. Wave Resort says it's an hour away from Manhattan.

In Asbury Park, Manhattan developer iStar is an active player in the city's economic comeback. The company has undertaken a multibillion dollar redevelopment of a 1.25-mile stretch along the town's waterfront, which includes the construction of not only the Asbury Ocean Club Hotel but the 17-story condominium property where it's located, the Asbury Ocean Club Surfside Resort & Residences.

In addition to that new boutique hotel, iStar also owns The Asbury, which has 110 rooms and is the repurposing of former Salvation Army building at 210 Fifth Ave.

“Asbury Park has experienced a meaningful rebirth, so to speak," said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University. "The place has changed phenomenally and looks great. So boutique hotels I would think are part of that evolution.”

More Tourist Draws

Residents have refurbished old Victorian homes, the city's music and arts scene has been revived, and new restaurants have popped up. The Stone Pony, the gritty club where Springsteen often performed before he was famous and still drops in for surprise performances, like he did over the weekend, is a mecca for his fans. So with its revival Asbury Park now has year-round activities and it not just a beach destination, according to Pandit.

"Asbury Ocean Club is not just a building: It's the resurrection of Asbury Park," iStar Chief Executive Jay Sugarman said in a statement earlier this year. "It is a symbol of the return of this town to its rightful glory and an opportunity for us to create the ultimate beach lifestyle for those of us who want the very best."

The hotel was built on a site, an eyesore, that was vacant for more than 30 years after being abandoned by its prior developers, according to Brian Cheripka, iStar senior vice president of land development.

“IStar has banked, has bet, on the gentrification, on their ability to capitalize on the inherent characteristics [of Asbury Park], that being a beautiful beach, proximity to New York and proximity to an affluent population and one that is travel-centric," said Daniel Hanrahan, director of CBRE Hotels Advisory. "At least up and down the Jersey shore, and the same actually holds true for reaching out onto Long Island and kind of arcing all around New York City, there’s been a limited inventory of real luxury lodging propositions. People have invested in primary residences and condominiums and, but from a lodging perspective there’s really been a real paucity."

But now, according to Hanrahan, “There are more than a few data points of renewed interest – in terms of both development and from a market demand standpoint – a willingness to spend and have it be in New Jersey and not in the Hamptons and not on Martha’s Vineyard. It’s evidenced by not only the Ocean Club coming online but the Wave Resort."

In an email an iStar spokeswoman said bookings were "great" at the Asbury Ocean Club Hotel for the July Fourth weekend. Starting room rates for the off-season begin at $295 and in season from $395, according to the spokeswoman.

These new hotels will "ultimately face challenges of seasonality," according to Hanrahan, but the success of The Asbury and one of the Jersey shore's few legacy luxury boutique hotels, the Reeds at Shelter Haven in Stone Harbor, is a good sign.

The new crop of boutique hotels is "being very sensitive to the fact that they can do exceptionally well in the high season, will sell into the shoulder season and the challenge will be in the off season," Hanrahan said. "But when you only have 54 rooms, it’s a lot better proposition than trying to deal with that same operating scenario and having 250 rooms.”

Hotels in Development

It's not just luxury hotels that are moving into the Jersey shore. In addition to upscale boutique properties, there is a pipeline of hotels, a baker's dozen representing various chains, in the works for the Jersey shore, according to STR, which provides global hospitality data. They would add more than 1,300 rooms to the shore area, according to that data.

Even so, the high end hotels are making sure there is plenty of upscale experience beyond the hotel room. Catering to consumer demand for authentic cuisine, the Asbury Ocean Club Hotel is providing local fare, from Asbury Park Distilling Co., Maiden Coffee, and Asbury Park Brewery, as part of its culinary offerings. And iStar said "a public marketplace and a fine-dining restaurant spearheaded by a high-profile chef is set to debut on the ground floor in 2020."

Kushner Cos., in addition to debuting the Wave Resort at 110 Ocean Ave., Long Branch, New Jersey, owns the 24-room Bungalow hotel at 50 Laird St. in that seaside town. It is also building a third hotel, the 102-room Onada Surf Club, which will be joining the two other hospitality properties at Pier Village, Kushner's growing mixed-use development.

Wave Resort in Long Branch offers its guests shops such the Hot Mess Blow Dry Bar, "to refresh your tired tresses after a day at the beach"; Ripples, a kids' playroom outfitted by Restoration Hardware; and eateries such as Orilla's Tacos, a beachside taqueria and 100 Ocean, an American-Mediterranean brasserie. Its room rates start at $300 a night.

“Since we opened our doors on Memorial Day weekend, the response has blown us away," Nicole Kushner Meyer, a principal of Kushner Cos., said in a statement. "We aimed to bring an unprecedented level of design, service, and amenity to the shore, and clearly filled a desire in the region for this product.”

And Kushner Cos. also plans to bring the Onada Surf Club to Long Branch, where it has Bungalow and Wave Resort.

“The Bungalow has been around since 2009, at a high-end market price point, so I assume that [Kushner Cos.] have done some significant market research over the past 10 years that this is a market that’s going to sustain a luxury product,” Pandit said.

The owner of Hotel LBI, Chris Vernon, didn't respond to requests for comment. But he is looking to build another hotel on Long Beach Island, a 102-room property in Beach Haven at the vacant site of Morrison’s Restaurant, according to TheSandPaper.net.