On a sunny Friday afternoon last month, guests staying at The Cove Riverwalk Villas in downtown Wilmington loaded luggage onto golf carts. Cove employees drove them from a nearby parking garage to The Cove's docks off Nutt Street.

Downtown Wilmington's shortage of hotel rooms has led some visitors and convention participants to choose a unique option — renting a houseboat at The Cove, which has 49 one- to three-bedroom floating rentals at Port City Marina.

"These types of accommodations have become more popular in the last several years and increase the inventory of rooms for meetings and conventions," said Kim Hufham, president and CEO of the Wilmington and Beaches Convention & Visitors Bureau.

It takes less than a couple of minutes to walk from The Cove to the Wilmington Convention Center, also located off Nutt Street.

"We get a lot of people coming for celebrations, anniversaries, birthdays, ladies' trips, things like that, family reunions," said Marcia Bittner, general manager of The Cove. "Sometimes, they'll block multiple villas at a time and all be in one place, but kind of have their own space. Then we definitely do get people who come to conventions and meetings at the convention center."

Owned by a husband-and-wife team out of Wake Forest, The Cove began welcoming guests in 2023, and they plan to add more rentals to their offerings at the marina, including more one-bedroom villas.

A study commissioned by Wilmington Downtown Inc. and shared at an event in 2024 showed that the downtown market could support the addition of a 300-room, upscale hotel. According to the study, that kind of hotel would better serve the convention center and overall demand, said Christina Haley, president and CEO of WDI.

"That data was supported by an economic impact study on the Wilmington Convention Center, Greenfield Lake Amphitheater and Live Oak Bank Pavilion," Haley said in an email in April. "To date, no new hotel rooms have been delivered since that analysis was completed."

She said from a broader business perspective, hotels play a critical role in bringing visitors downtown, and those visitors directly support local businesses.

"Hotels not only serve conventions but also concerts, events and other activities that drive foot traffic and contribute to downtown business revenues," Haley said. "Many downtown businesses rely heavily on peak tourism periods to sustain operations through slower months, and even a single underperforming weekend can have a significant impact on their bottom line."

Hufham also said the biggest drawback of the hotel room shortage is the loss of business because of not being able to accommodate a large convention group's needs.

"The majority of planners prefer to have all the rooms within walking distance of the convention center," Hufham said.

Mehul Patel, of Georgia-based Ideal Hospitality Investments, announced in 2024 that his company had bought 1 Hanover St. for $3.75 million, with plans for a dual-brand hotel. Dual-brand properties combine two separate lodging brands into one facility.

He said in April this year that his hotel project is still in the design phase. "We're getting all of our preliminary design and concept layouts put together, which is back in the same direction where we were about a year ago, but a little bit more detailed," Patel said.

He said the room count could be between 330 and 350, and his firm has been working with Hilton extended-stay and Marriott brands on the downtown hotel.

He said Ideal Hospitality expects to complete the full design for the permitting phase to take at least another six months.

"In today's economy, things just move a little bit slower," Patel said. "Overall, we're very optimistic about the project."

Bittner sees The Cove as contributing rather than taking away business from existing downtown hotels.

"It provides a different option. We have great relationships with the hotels right here. We have a great relationship with the nearby Embassy Suites team and the Aloft team," she said, "and we work together well because we're different products, and so we provide a different opportunity for people who are coming to stay."