Va. hotel revenues up, rooms sold still lower than 2019
NoVa market still continues to lag amid recovery
Virginia’s hotel industry is continuing its recovery from the COVID-19 pandemic, but revenue increases are being driven by high room rates, rather than more travelers.
That’s according to a report released Friday by Old Dominion University’s Dragas Center for Economic Analysis and Policy. According to the center’s analysis of data from STR Inc., a division of CoStar Group Inc. that provides market data on the U.S. hospitality industry, hotel revenues in the commonwealth this year were 12.3% higher from January through July, compared with pre-pandemic business during the same period in 2019.
Hotel rooms sold were about 1.3% lower than compared with the same period in 2019. The average daily rate (ADR) for hotel rooms was $130, a 13.7% increase from 2019. Revenue per available room (RevPAR) was $81, up 10.46% from the same period in 2019.
Northern Virginia continues to be the drag on the state’s hotel industry, according to ODU. The region accounted for 43% of hotel revenue generated in the state in 2019; it remains 3.6% lower through July 2023 when compared to the same period of 2019. The state’s two other largest markets, Hampton Roads and Richmond, have “more than fully recovered,” ODU said in its report.
Rooms sold through July decreased 11% in Northern Virginia, by 9% in the Roanoke market and by 3.5% in the Virginia portion of the Bristol/Kingsport, Tennessee, market, compared with pre-pandemic data.
Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association, told Virginia Business that business travel, a major source of bookings in the Northern Virginia market, shows sign that it is continuing to pick up along with federal government travel.
“I still think it’ll take even longer to fully recover, but it’s doing pretty well,” Terry said.
In Hampton Roads, Virginia Beach saw the largest revenue increase at 31.2% through July compared to 2019. That was followed by Chesapeake/Suffolk at 27.9% and Norfolk/Portsmouth at 27.7%. Williamsburg had the slowest revenue growth at 13.2%.
When comparing year-to-date data from 2023 to the same time period of 2022, however, the picture appears more rosy. According to ODU’s report, hotel revenue increased 12.1% across the state and rooms sold saw a 3.8% increase. Northern Virginia saw a 23.8% percent increase in hotel revenue in 2023 over the same period of 2022; rooms sold increased by 8.9%. Bristol, Virginia, saw the second largest revenue increase for that period at 10.6%, and rooms sold rose to 3.3%.
Terry said Virginia’s hotels are seeing a “softening” as the leisure market balances back toward a more “normal” pattern after the pandemic ground travel to a halt. Economic conditions, including people relying more on their credit cards after spending through federal stimulus money, are also a factor.