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Tag: STR

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.

2023 Va. hotel revenues up 12.9% over pre-pandemic

Hotel revenues in the commonwealth this year were 12.9% higher from January through May, compared with pre-pandemic business during the same period in 2019, according to data released Tuesday by STR Inc., a division of CoStar Group Inc. that provides market data on the U.S. hospitality industry.

Hotel rooms sold were about the same compared with the same period in 2019. The average daily rate (ADR) for hotel rooms was $125, a 12.8% increase from 2019. Revenue per available room (RevPAR) stood at $75, up 11.4% from the same period in 2019.

Revenues are up because prices are higher compared with 2019 in part due to inflation and labor costs, versus greater occupancy rates, Vinod Agarwal, deputy director of Old Dominion University’s Dragas Center for Economic Analysis and Policy told Virginia Business.

Also, as the pandemic lessened, there has been pent-up demand from leisure travelers, Agarwal said. Driven largely by tourism, hotel revenues in Hampton Roads led the state, rising 27.4% higher than 2019. The region has “more than fully recovered from the pandemic,” according to a news release from the Dragas Center.

In fact, every major market in the commonwealth except Northern Virginia appears to have fully recovered from the pandemic, which is responsible for Virginia hotels’ overall “lackluster performance” through May 2023, ODU said. Northern Virginia’s hotels are much more dependent on business travel, which has not returned to pre-pandemic levels, Agarwal noted.

Northern Virginia’s hotel revenues were down 3.1% through May this year, compared with the same period in 2019 when Northern Virginia accounted for 43% of hotel revenue generated in the commonwealth,

“Hoteliers have to adjust,” Agarwal said. “Business travel won’t be the same as it was before.” Airlines are experiencing something similar, he noted — leisure travel has returned but not business travel. “The markets doing well are the ones that are not dependent on business travel.”

Rooms sold through May decreased 10.5% in Northern Virginia, by 7.1% in the Roanoke market and by 1.3% in the Virginia portion of the Bristol/Kingsport market, compared with pre-pandemic data.

In Hampton Roads, the Norfolk/Portsmouth, Chesapeake/Suffolk and Virginia Beach markets fared better than other submarkets, with 10.8%, 6% and 4.9% increases in rooms sold, respectively. The Newport News/Hampton market was the only submarket in that region that saw a decline. Rooms were down 1.2%.

Hampton Roads saw its revenue increase the most in Virginia Beach, which was up 33.1% compared with 2019, followed by Chesapeake/Suffolk, which was up 31.2%. The Norfolk/Portsmouth market was up 30.5%. The slowest growth in that region was in the Williamsburg market, with a 17.6% increase.