Cape May sells the inn: a Victorian house, a porch, breakfast, a walk to the mall and the beach. Hotels exist on the water if you want a lobby. Motels west of the historic district exist if you want the car next to the door. Those three products are not interchangeable, and July Saturday does not care which one you prefer.
This is an independent guide. Some links are affiliate bookings.
Inn
This is the local object. You sleep in a house that has a name, often a lot of wallpaper, and a breakfast that is part of the rate. Many have two-night minimums in season and rules about children or parties that are not hidden if you read the listing. Book the building, not “Cape May Victorian” as a filter.
Shoulder months — May, June, September, October — are when an inn makes financial sense. October is also when the town is doing the thing it is good at.
Hotel on the water
A proper hotel if you want a front desk at midnight, a pool, and a room that does not involve someone else’s staircase. You are paying for Beach Avenue and the ability to walk outside in a robe-adjacent way. Still walkable to the mall if you picked the right block.
Motel and the car
West of the gaslights, closer to the roads that leave town. Fine if you drove from Philadelphia, have luggage, and do not want to circle the historic district looking for a lot. You will walk or drive to dinner. That is the trade.
Cape May Point and West Cape May
Point is the lighthouse, the state park, and quieter nights. West Cape May is residential and a short ride from the mall. Book them if the historic district rate is the problem or if the porch crowd is the problem. Do not book them and expect to stumble into the pedestrian mall in slippers.
Parking and walking
The pretty blocks are the parking problem. Ask the inn where guests actually put the car. If the answer is “a lot three streets over,” that is still better than street-hunting on a Saturday in August.
When to book
Inns disappear first. Holiday weekends and Victorian Weekend-type events disappear next. A midweek in October is the visitor’s friend. A one-night Saturday in July is how you end up in a motel you did not choose.
[EXPEDIA: Cape May, NJ]