Hampton Roads hotel revenues outpace Va., country

Hotel revenues in Hampton Roads outpaced Virginia and the nation through October, according to a report from Old Dominion University’s Dragas Center for Economic Analysis and Policy, citing data from STR, a division of CoStar Group that provides market data on the U.S. hospitality industry. 

Through October, hotel revenues were 22.8% higher in Hampton Roads, compared with the same period in 2019. But hotel revenues for the whole state lag behind that, just 12.6% higher compared with 2019. 

Within Hampton Roads, Virginia Beach saw hotel revenues increase the most, 29% compared with 2019, followed by Norfolk/Portsmouth at 27.6% and Chesapeake/Suffolk 26.7%. The slowest growth for this area of the state was the Williamsburg market, which increased by 8.9% compared with the same period in 2019.

Hotel revenues for Northern Virginia was 2.7% lower this year, compared with the same period in 2019. It’s the only market that has not fully recovered from the pandemic, according to the report.

The number of rooms sold through October, compared with the same period in 2019, dropped by 10.6% in Northern Virginia, by 8.2% in Roanoke and by 5.3% in the Virginia portion of the Bristol/Kingsport market.

Within Hampton Roads, in the submarkets of Norfolk/Portsmouth, Virginia Beach and Chesapeake/Norfolk, the number of rooms sold increased by 7%, 3.9% and 2.4% respectively. In the Williamsburg and Newport News/Hampton submarkets, the number of rooms were down 3.9% and 2.6% respectively. 

The number of rooms sold in Virginia was 1.7% lower, compared with the same period in 2019, but the average daily rate for hotel rooms sold through October was at $131, a 14.5% increase compared with 2019.

That’s due to the federal per diem reimbursement rate in Virginia increasing on Oct. 1, says Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association. The per diem, which increases every year, went up $9 this year, from $98 to $107, which Terry says is significant. From fiscal 2022 to fiscal 2023, it increased $2. 

“That increase for us in Virginia is a huge impact because of the amount of per diem business we have,” he said.