Statewide hotel revenues continue to lag 2019

Hotel revenues in Virginia for the first half of 2022 continued to lag behind 2019, and reduced business travel is still the culprit.

That’s according to data released this week from STR Inc., a division of CoStar Group Inc. that provides market data on the U.S. hospitality industry.

Hotel rooms sold decreased by 4.6% in Virginia through June 2022 when compared with 2019. The average daily rate (ADR) paid for hotel rooms through June stood at $117, a 3.9% increase compared to 2019. Revenue per available room (RevPAR), an industry standard of the health of the lodging sector, fell to $70 and was 2% lower compared to 2019.

The state’s three largest markets are Hampton Roads, Northern Virginia and Richmond. Those three regions cumulatively generated about 77% of the state’s hotel revenue in 2019. While Hampton Roads has more than recovered, with hotel revenue in the first six months of 2022 18.% percent higher than during the same period of 2019, Northern Virginia’s hotel revenue was 23.5% lower for the first six months of 2022 as compared to the first six months of 2019. Overall, hotel revenues for the commonwealth through June are still 0.8% below the levels observed in 2019.

The Northern Virginia market, which accounted for 43% of the revenue generated in the commonwealth in 2019, is responsible for the decline in the state through June 2022, according to a press release from Old Dominion University’s Dragas Center for Economic Analysis and Policy. Group travel, including weddings and family reunions, appears to be back, but business travel, upon which Northern Virginia’s hotels are heavily dependent, is still “lagging behind,” Vinod Agarwal, of ODU’s Dragas Center, said.

Rooms sold through June 2022 compared to 2019 decreased by 18.6% in the Northern Virginia, by 6.7% in the Virginia portion of Bristol market and by 5.5% in Roanoke. Some of the largest increases were seen in Lynchburg, at 11.6%; Blacksburg, at 8.9%; and Staunton/Harrisonburg by 8.7%  Richmond increased by 1.6%.

Blacksburg, Charlottesville and Lynchburg saw the largest increases in percent change in total room revenue at 26.9%, 20.4% and 20.1% respectively. Hampton Roads followed closely behind at 18.5%.

Agarwal said in a statement that he expects the industry to continue to recover.