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Hotel revenue still up, but shows signs of softening

Virginia’s hotel industry revenues remain above pre-pandemic levels but are beginning to show a softening.

That’s according to a report from Old Dominion University’s Dragas Center for Economic Analysis and Policy released Tuesday. According to the center’s analysis of data from STR, a division of CoStar Group that provides market data on the U.S. hospitality industry, hotel revenues in the commonwealth this year through August were 11.5% higher than the same period during 2019. That’s a change from the 12.3% reported from January through July 2023.

Hotel rooms sold were about 2.1% lower than compared with the same period in 2019. The average daily rate (ADR) for hotel rooms was $130, a 13.9% increase from 2019. Revenue per available room (RevPAR) was $82, up 10% from the same period in 2019.

Northern Virginia accounted for 43% of hotel revenue generated in the state in 2019; it remains 3.4% lower through August 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 August decreased 11.1% in Northern Virginia, by 10% in the Roanoke market and by 5.8% 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 leisure travel is seeing a softening and that the state is still not seeing a recovery in “corporate, transient business and even some of the government travel that we’d like to see.” Terry attributes that drop in leisure travel to a tightening of wallets rather than to the end of summer and back-to-school.

But, he added that a “bright spot” is on the horizon. On Oct. 1, the federal government will increase its standard per diem rates to $107 for most of the U.S., which “should actually give us a nice boost in the future,” he added. Virginia, because of its proximity to the federal government and military traffic, is one state most likely impacted by that increase, Terry said.

In Hampton Roads, Virginia Beach saw the largest revenue increase at 28% through August compared to 2019. That was followed by Norfolk/Portsmouth and Chesapeake/Suffolk at 26.3% and 25.8%, respectively. Williamsburg had the slowest revenue growth at 8.4%.

When comparing year-to-date data from 2023 to the same time period of 2022, data also show improvement, but a softening. According to ODU’s report, hotel revenues increased 10.5% across the state and rooms sold increased by 3.1% in August, down from July 2023 over July 2022, when revenues were 12.1% across the state and rooms sold saw a 3.8% increase. Northern Virginia saw a 21.86% increase in hotel revenue in August 2023 over the same period of 2022; rooms sold increased by 8%. Bristol, Virginia, saw the second largest revenue increase for that period at 9.4%, and rooms sold were at 1.1%.

Hospitality | Tourism 2023: ERIC TERRY

With four decades of hospitality experience, Terry has advocated for the Virginia Restaurant, Lodging & Travel Association’s 1,500-plus industry members since joining as president in 2014.

During the pandemic, Terry led the VRLTA in persuading state legislators to allocate $250 million in federal stimulus funds for industry relief. He also spearheaded support for legislation approved in 2022 to extend to-go cocktails through July 2024, a win for the recovering restaurant industry.

Before joining VRLTA, Terry held marketing and sales leadership roles at Redstone Companies Hospitality, Benchmark Hospitality and Malibu Entertainment Worldwide. He also served as president of Xelerate Group, a marketing agency he launched in 2002.

Over the course of his career, Terry has worked for Hollywood Casino/Pratt Hotel, Marriott Hotels and Resorts, and the Busch Gardens theme park when it was owned by Anheuser-Busch Cos.

He received a bachelor’s degree in hotel and restaurant management from Virginia Tech in 1982. Terry serves on the Virginia Tech Hospitality & Tourism Management Advisory Board.

New federal per diem rates provide bump for hotels

The federal government’s fiscal 2024 per diem reimbursement rates — released Aug. 16 by the General Services Administration — will largely benefit Virginia’s hotels, but not necessarily its restaurants.

The continental United States (CONUS) rates — dictating lodging allowances and meals and incidental expenses (M&IE) for federal employees while traveling — will be effective Oct. 1 through Sept. 30, 2024.

The standard CONUS lodging rate, which applies to all localities that GSA does not specify rates for, will increase from $98 to $107. GSA bases the lodging allowances on average daily rate data, less 5%. Fiscal 2024 rates are based on data from April 2022 through March 2023.

“Virginia is probably the most impacted state by this, just because of the amount of government and military traffic that we have … and so it’s a nice lift for Virginia overall,” said Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association.

Northern Virginia sees heavy government employee travel traffic due to its proximity to Washington, D.C. The GSA provides a set rate for D.C., the cities of Alexandria, Falls Church and Fairfax and the counties of Arlington and Fairfax, as well as Montgomery and Prince George’s counties in Maryland.

For fiscal 2024, the Washington, D.C.-area lodging rate will vary by month, with reimbursement rates scheduled to hit a low of $176 in July and August 2024 and a high of $261 in October 2023 and September 2024. That’s a slight increase from fiscal 2023 rates, which ranged from $172 to $258, although rates for March through July remain steady, at $258.

The fact that rates stayed roughly the same is good news for area hotels, said Visit Fairfax President and CEO Barry H. Biggar. Northern Virginia hotel rates dropped for a period of time as business travel declined, a result of the COVID-19 pandemic. From January through July, Northern Virginia hotel revenues were 3.6% lower than the same period in 2019.

“There was a period of time where the rates were actually going down a bit, so to maintain [almost] the exact same per diem as we had last year, we’re happy to be in that position,” he said, adding that it will contribute to the rebuild of travel and tourism in the county.

The per diem rates seem comparable to current hotel room rates in the county, particularly in areas that see a lot of government travel, like Reston and Tysons, Biggar said.

While the standard room rate per diem will increase, GSA did not change meals and incidental expense rates. That rate remains at $59, and the highest tier will stay $79. Starting with rates for fiscal 2016, the GSA began reviewing M&IE rates every three years.

The lack of an increase in the M&IE rate is frustrating, Terry said, since restaurant prices have increased over the last 18 months.

Northern Virginia’s M&IE allowance remains $79, but Biggar said he hasn’t heard concerns from restaurants.

“No one really is complaining about anything at this point, understanding that it’s going to still take a little while to regain back all the markets,” Biggar said.

Hampton Roads is another area that sees heavy federal employee travel, a benefit of it being home to Naval Station Norfolk, the world’s largest Navy base. Although much of the area falls under the standard rate, Virginia Beach receives a nonstandard rate. For fiscal 2024, GSA set the lodging rate at $120 for most of the year, up from $117 in fiscal 2023, and $222 for June, July and August, the same allowance as FY23. For James City and York counties and the city of Williamsburg, lodging rates range from $107 to $137 depending on the month, up from $103 to $130. The M&IE total in that region will remain $64.

In nearby Norfolk, the standard rate of $107 is attractive for hotels outside of downtown, said Visit Norfolk President and CEO Kurt J. Krause. Although the average room rates downtown are closer to $150, at times of low demand, such as December through February, hotels in that area will likely offer the CONUS rate to help fill rooms when demand from business travel decreases.

“The good news is they’ve raised it, because the average rates in Hampton Roads, I know, but specifically in Norfolk, they’ve gone up appreciatively in the last couple of years, post-COVID,” Krause said. While it is not ideal that the federal government’s per diem changes trail that trend, the new allowance still provides an attractive rate, he said.

In other areas of the state, rates have largely stayed static or reflected the slight increases seen in the standard rate. In Richmond, the lodging rate will increase from $145 to $149, and Charlottesville will see a jump from $126 to $133. Lynchburg’s lodging rate bumps up from $105 to $109.

Roanoke’s rate remains the same, $122, while Blacksburg and Montgomery County’s rates will range from $111 to $134, depending on the month, up from $105 to $123.

For hotels that honor the per diem rates, “this is going to be a nice increase for them,” Terry said. “This should be welcome news for most of our hotels.”

Va. hotel revenues in February up 14.9% from 2019

Hotel revenues in Virginia were 14.9% higher in February compared with pre-pandemic levels, largely because of increased room rates, 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 increased by 4.3% last month compared with February 2019. The average daily rate (ADR) for hotel rooms was $108, a 10.2% increase from February 2019’s rate. Revenue per available room (RevPAR) stood at $55, up 13.6% from the same month in 2019.

But, as in January, when revenues were also up 14.9% over pre-pandemic levels, “substantial increases in hotel revenue in almost all markets … can be easily attributed to higher room rates rather than increases in occupancy or increases in hotel rooms sold,” Vinod Agarwal, deputy director of Old Dominion University’s Dragas Center for Economic Analysis and Policy, said in a statement.

The Hampton Roads and Richmond markets have fully recovered from the pandemic, but Northern Virginia revenues remain below pre-pandemic levels. In 2019, those three markets generated about 77% of Virginia’s total hotel revenue, according to a news release from ODU’s Dragas Center, and 43% of the total revenue came from the Northern Virginia market.

Hotel revenue in Northern Virginia decreased 4.3% from February 2019, and rooms sold in the region decreased 9.1%. In August 2022, Northern Virginia hotel revenue was down by 20.4%.

Nonetheless, Northern Virginia is seeing a rebound, Virginia Restaurant, Lodging & Travel Association President Eric Terry said.

“I am hearing the school youth groups are coming back,” he said. “That’s a real plus. That’s always been a staple of our spring business up in Northern Virginia.”

The Staunton/Harrisonburg, Hampton Roads and Blacksburg markets saw the largest increases in revenue compared with February 2019, up 38.1%, 37.7% and 33.6%, respectively. Rooms sold in Staunton/Harrisonburg increased 19.3% from pre-pandemic levels. The Blacksburg market saw an 18% increase in rooms sold.

Within Hampton Roads, the Virginia Beach submarket saw the largest revenue increase — 45.1%— while the Chesapeake/Suffolk submarket had a comparable increase of 42.3%, and the Norfolk/Portsmouth submarket saw a 41.4% increase. The Newport News/Hampton market had the slowest revenue growth, with a 26.6% increase from February 2019.

Hampton Roads rooms sold in February increased 13.2% from the same month in 2019. The Norfolk/Portsmouth submarket saw a 21.9% increase in rooms sold, the largest increase in the region. The Williamsburg submarket followed, with a 16.5% increase in rooms sold, and the Chesapeake/Suffolk submarket saw a 14.6% increase.

In Central Virginia, the Lynchburg market saw a 26.3% increase in revenue over February 2019’s total and a 14.6% increase in rooms sold. Richmond, meanwhile had a 17.4% increase in hotel revenue and a 5.1% increase in rooms sold. In Charlottesville, hotel revenues increased 22.7% compared with February 2019, and rooms sold increased 5.6%.

Hotel revenue in the Roanoke market rose 9.5% from pre-pandemic levels, although rooms sold declined by 5.1%. In the Bristol/Kingsport area, hotel revenue rose 15.8%, but rooms sold declined 3.9%.

“There was growth in almost every market,” Terry said, “and the rate continues to be stronger than the previous year, so that’s helpful, at least in terms of profitability for the hotels.”

A full recovery, especially for Northern Virginia, relies on the return of corporate travel and returns to government offices, Terry noted.

January Va. hotel revenues surpass 2019

Virginia hotel revenues in January were 14.9% higher than pre-pandemic levels, largely due to higher hotel room rates, 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 increased by 5% last month compared with January 2019. The average daily rate (ADR) paid for hotel rooms in January was $105, a 9.3% increase from the ADR in January 2019. Revenue per available room (RevPAR) was $50, a 13.4% increase from the same period in 2019.

“With continued pent-up demand in leisure travel and a recovery in group travel, we have seen significant improvement in the performance of the hotel industry over the 2019 levels,” Vinod Agarwal, deputy director of Old Dominion University’s Dragas Center for Economic Analysis and Policy, said in a statement. “Substantial increases in hotel revenue in almost all markets, however, can be easily attributed to higher room rates rather than increases in occupancy or increases in hotel rooms sold.”

The Hampton Roads, Staunton/Harrisonburg and Blacksburg markets saw the largest revenue increases from January 2019, up 37.1%, 37.5% and 35.5%, respectively. Rooms sold in Staunton/Harrisonburg increased 21.9% over January 2019 levels, and in Blacksburg, rooms sold increased by 21.2%.

Rooms sold in Hampton Roads were up 13.6% from pre-pandemic levels. In the Norfolk/Portsmouth submarket, rooms sold increased by 22.4%, and in the Chesapeake/Suffolk submarket, rooms sold increased by 14.5%. Both submarkets’ revenues increased by 41.6%. The Virginia Beach submarket, though, had the largest increase in revenue — 44.7% — with a 13.1% increase in rooms sold. The Williamsburg market had the slowest revenue growth in Hampton Roads, up 25.1% from 2019 levels, with 13.2% more rooms sold.

The increase in the Staunton/Harrisonburg and Blacksburg markets could be a general trend from universities resuming larger in-person activities, said Virginia Restaurant, Lodging & Travel Association President Eric Terry, like hosting conferences and campus tours.

In Richmond, hotel revenue increased 15.4%, and rooms sold increased 4.4%. The Charlottesville market saw revenue gains of 18.4% with a 4.9% increase in rooms sold.

Hotel revenues for the Roanoke market increased 13.6%, although rooms sold decreased by 1.8%. In the Bristol/Kingsport market, hotel revenues rose 16.4%, but rooms sold declined 3.3%.

Although the Hampton Roads market has more than recovered from the pandemic, the Northern Virginia market still lags its pre-pandemic numbers, with hotel revenue down 4.1% compared with 2019. Rooms sold in Northern Virginia last month decreased by 8.4% from January 2019. In August 2022, Northern Virginia hotel revenue was down by 20.4%.

“Northern Virginia is continuing to strengthen. I think as businesses come back to the office, it seems to be doing quite a bit better,” VRLTA’s Terry said.

Although individual corporate travel remains low, group travel, such as trade association members or conference attendees, is picking up, Terry said, “and that helps quite a bit.”

COVID challenges continue for Va. restaurants

Liz Kincaid faced a major problem in August after the walk-in refrigerator in one of her Richmond restaurants — Max’s on Broad — broke. Her usual supplier told her the wait for the replacement part would take two months. “I have raw oysters and produce and fish and chicken,” recalled Kincaid. “I’m like, ‘What am I gonna do?'”

She got lucky. One of Kincaid’s other restaurants, Bar Solita, is across the street, so she was able to move the food from Max’s to its refrigerator. But this type of supply chain problem isn’t limited to critical refrigeration.

“The guy that sells me my equipment is like, ‘You might as well buy an oven and a fryer today. You’ll get it in two months, because with four restaurants, one of them’s bound to break,'” recounted Kincaid, CEO of RVA Hospitality, a Richmond-based restaurant company that owns and operates Max’s, Bar Solita, Tarrant’s Cafe and Tarrant’s West.

In the wake of the COVID-19 pandemic, supply chain disruptions, backlogs, inflation and labor issues continue to be lingering causes of headaches for restaurant operators.

According to a National Restaurant Association survey of 4,200 restaurateurs conducted from July 14 to Aug. 5, 41% of restaurant operators think business conditions for their restaurants will not return to pre-pandemic levels for more than a year. The 120 Virginia restaurant operators who responded to the survey had similar responses, with 40% estimating it will take more than a year, and 27% saying conditions will never return to normal for their restaurants.

Kincaid said revenue is down about 30% from 2019 across her four restaurants, amounting to nearly $3 million in sales.

Tony Stafford, chef and founder of Ford’s Fish Shack, thinks it could take until 2025 for his three locations — in Ashburn, Leesburg and Chantilly — to return to pre-pandemic conditions.

One reason sales are down is widespread remote work, Stafford said.

“You have employers not requiring employees to go back to work, so they’re still working from home, so we have no lunch business and then we have no happy hour business,” Stafford said. “People aren’t coming home from the office.”

Supply challenges

Restaurant owners are taking hits from supply costs, with 90% of Virginia respondents saying their total food and beverage costs are higher than in 2019, comparable to the 88% of nationwide respondents who said they’ve seen the same thing.

One example is French fries, which cost less than $1 a pound last year but are now $1.25 per pound, Stafford said. Fry cooking oil became more expensive as well, particularly sunflower oil, which has been affected by Russia’s invasion of Ukraine. Before the invasion, Ukraine was the world’s largest exporter of sunflower oil. Cooking oil is up 40% to 50% over last year, he said. (The prices are also being driven up in part by increased demand for used cooking oil and soybean oil for making renewable diesel fuel.)

Stafford’s had to raise menu prices as a result. A side of fries used to be $2 or $3. Now, they’re $5 or $6.

Kincaid’s experiences have been similar.

“Chicken, beef, pork — almost every single thing costs more today than it did before the pandemic, and we’re also seeing gas surcharges put on deliveries,” she said.

Stafford also cited increasing gas surcharges. One company charges him $7 per delivery, and he gets six deliveries a week, adding up to more than $2,000 a year.

“How do I pass that along and put it on the bottom of a check?” he asked. “Here’s your subtotal, your tax, your gratuity and your fuel surcharge. Some people are trying that, but I feel like I can’t do that. I’m trying to keep my guests coming in.”

To-go containers are more expensive as well, because Styrofoam and other plastic containers are manufactured with petroleum derivatives. Stafford estimates container costs are up 50%.

Kincaid also has seen increasing costs for paper products, including to-go boxes.

Supply chain problems have meant she’s been forced to accept alternate products. “You want to serve your takeout food in the same compostable, recyclable box that makes your food look great,” Kincaid said. “But next week, they won’t have that size, so you have to settle for a different size or something less than what you would normally serve your food in.”

Even silverware supplies are inconsistent, leading to different-patterned silverware within the same restaurant, she said.

Workforce woes

Labor also continues to be a major concern for restaurant owners. Nationwide, 86% of restaurateurs surveyed said their total labor costs are higher than in 2019, and in Virginia specifically, 91% said the same.

Almost every one of Kincaid’s employees received a raise during the pandemic, including salaried managers, she said. She also increased benefits, like offering free online telehealth services, including mental health care.

Over the last two years, Stafford’s labor costs have increased about 40%.

Neel Desai, managing principal of Virginia Beach-based S2K Hospitality, which owns four Which Wich franchise locations and two Your Pie locations across Hampton Roads, estimated that his costs overall are up somewhere between 8% and 15%, but said his revenue had already returned to 2019 numbers. Meanwhile, he estimated that his employees’ wages have increased between 8% to 10%.

As labor costs have increased, the pool of available workers has gone in the opposite direction. Nationally, 65% of respondents said their restaurants did not have enough employees to meet current customer demand. Sixty-three percent of Virginia respondents said the same.

Each of Kincaid’s four restaurants require 75 people to be fully staffed, and she currently has 225 employees — meaning she’s short by about an entire restaurant’s worth of workers. Although she hired more people in May and June, she won’t be able to keep them if fourth-quarter sales don’t rebound.

“It’s been really hard to hire during a pandemic, and even as it becomes an endemic, it continues to be difficult to find and retain good workers,” she said.

Along with receiving applications from people without experience in the industry, she has had applicants “ghost” her — i.e., not show up to interviews and cease communications without any explanation.

Desai has also had no-show candidates. He’s found a solution in cross-training staff on a variety of jobs, allowing him to operate with fewer employees. At any given store, he has three to five workers who can fill in as needed. That’s also helped offset other rising costs. “You’re doing a better job of training your staff and making sure they understand the importance of their job and really giving them that development so that you can run a more efficient restaurant,” Desai said.

Stafford could hire 15 to 20 employees at each restaurant, but he isn’t getting many interested applicants. It’s a bit of a puzzle, since the jobs pay well and don’t require college degrees or technical education, he said. His servers make more than $50,000 a year — some more than $70,000 — with cooks earning between $40,000 and $60,000 a year, and managers from $80,000 to $100,000 annually, he said.

“I think people have just been so scared to come back into the restaurant industry,” Stafford said. Before COVID vaccines became available, restaurant workers worried about working in closed environments.

Also, restaurant workers are tired and can’t get time off because restaurants are understaffed. Some are leaving the industry in favor of finding remote-work jobs.

Desai has been able to retain employees fairly well, he said. He credits S2K Hospitality’s career development, including training managers on how to review financial statements.

“That helps to retain employees,” he said, “because they can see that there’s a longer career path than just being a cashier or just being a server.”

Passing costs on

To counteract rising costs, restaurant owners are raising menu prices and changing menu offerings, as well as reducing hours and — sometimes — capacity. Nationally, 91% of restaurants surveyed increased menu prices, and 65% changed menu offerings. Sixty percent reduced their hours of operation, and 38% closed on days they normally would have been open.

Eighty-nine percent of Virginia restaurants surveyed increased menu prices, and 61% changed items on their menus. Fifty-six percent of Virginia restaurants reduced hours of operations, and 35% closed on days they would normally be open.

Stafford has closed his restaurants earlier and shut down sections of them. His restaurants closed for the Fourth of July this year.

Kincaid has raised menu prices several times and shrunk her restaurants’ menus.

For restaurants everywhere, “that’s kind of the crux of it,” Kincaid said. “Everything costs more, and we’re selling less.”

As the industry continues to face challenges, restaurateurs are finding alternative solutions. Kincaid found a quicker fix for the broken refrigerator at Max’s on Broad when she contacted another company, which was able to locate a slightly different part that would work. The refrigerator was repaired within a week.

“Basically, we ended up Band-Aiding it, and we think that’s going to work,” she said.

April Va. hotel revenues down slightly from pre-pandemic

Virginia hotel revenues in April were down 3.5% compared with pre-pandemic April 2019 revenues, largely due to the lagging Northern Virginia market, according to data released Wednesday by STR Inc., a division of CoStar Group Inc. that provides market data on the U.S. hospitality industry.

Hotel rooms sold decreased by 4.7% last month, compared with the same period in 2019. The average daily rate (ADR) paid for hotel rooms through April was $108, a 1.3% increase from the April 2019 ADR. Revenue per available room (RevPAR), though, fell to $60, 4% lower than this time in 2019. In April 2021, Virginia’s ADR was $92.72 and RevPAR was $52.42.

Hotel revenues through the first four months of 2022 in the Hampton Roads market were 19% higher than those recorded in 2019. Within Hampton Roads, the Chesapeake/Suffolk submarket saw its revenue increase the most, up 23% compared to 2019. Virginia Beach hotels saw 22% higher revenue, and the Newport News/Hampton submarket saw 15% higher revenue than 2019.

In the Richmond market, total hotel revenue increased 9.4%, and Charlottesville saw a 19.6% jump. The Blacksburg market saw a 26.6% increase in hotel revenue compared with 2019.

Northern Virginia hotel revenue continues to lag behind 2019 levels. Hotel revenue for the region was 28% lower through April, compared with the same period in 2019. The only other market showing a decline in revenue was Roanoke, which was down by 0.8%. The Northern Virginia market is essentially responsible for the overall decline in state revenue numbers, according to a press release from Old Dominion University’s Center for Economic Analysis and Policy. In 2019, it accounted for 43% of the state revenues.

Still, the latest Northern Virginia revenue is encouraging, said Virginia Restaurant, Lodging & Travel Association President Eric Terry . In March, Northern Virginia revenue was 31% lower than in 2019.

“We’re seeing some good signs of recovery up there,” he said. “A lot of the student youth groups are coming in, so it’s been the most positive report that I’ve think I’ve seen for April.”

In addition to school trips to Washington, D.C., some corporate business is returning, he added.

In Northern Virginia, rooms sold decreased by 21% compared with this time in 2019. In Roanoke, rooms sold decreased by 7%. The Newport News/Hampton market and the Bristol, Virginia, market both sold 4% fewer rooms. Virginia Beach market rooms sold were down 2%. The Chesapeake/Suffolk submarket, though, had a 9% increase in rooms sold.

Va. restaurant, travel association names new VP

Richmond-based Virginia Restaurant Lodging & Travel Association has promoted Brittany Wojdyla to vice president of membership and business development, the organization announced Thursday.

In her new role, Wojdyla will be responsible for leading the association’s membership efforts throughout the state, developing partnerships and sponsorships, managing events and overseeing marketing and communication strategies.

Wojdyla joined VRLTA in September 2019 to lead the association’s membership retention and acquisition. During her tenure, she helped transform the organization’s communications, improved member outreach and enhanced member engagement.

“Brittany has proven to be an indispensable team member and leader within the association,” Eric Terry, VRLTA president, said in a statement. “She has built valuable relationships with our members and other constituents and has made great strides in updating and streamlining internal efficiencies. I am confident that she will continue to build on these successes and play a key role in our future efforts and accomplishments.”

Wojdyla joined VRLTA from Sea Island Resort in Georgia and has more than 10 years of hospitality, hotel and event planning experience. She received her bachelor’s degree in hospitality and food management with a minor in marketing from Ball State University in Muncie, Indiana.

“I look forward to continuing my work alongside our staff, members, partners and sponsors to build on our foundation and plan new initiatives that will benefit Virginia’s hospitality and tourism industry into the future,” Wojdyla said. “It is a pleasure to support the efforts of so many of the commonwealth’s finest businesses and organizations.”

Va. hotel revenues down 6.5% from Jan. 2019

Virginia hotel revenues in January were 6.5% below January 2019 levels, according to data released Monday by STR Inc., a CoStar Group division that provides market data on the U.S. hospitality industry.

During the same period, hotel rooms sold decreased by 4% compared with 2019 levels. The average daily rate (ADR) paid for hotel rooms last month decreased by 2% to $94, while the revenue per available room (RevPAR) fell to $42, 7% lower than its 2019 level.

The January ADR and RevPAR are improvements from 2020 levels, although Virginia Restaurant, Lodging & Travel Association President Eric Terry has said that comparisons to 2019 numbers are more balanced than comparisons to 2020. In December 2020, the ADR was $77.13 —a 21% drop from 2019 — and the RevPAR $27.94, a 41% drop from 2019.

Hampton Roads hotels’ revenues were 10% higher than their January 2019 totals. Within the region, Virginia Beach saw a 22% increase from its January 2019 revenues. Williamsburg was the only submarket to see a decline — 3%.

In Northern Virginia, hotel revenue was 33% lower than its January 2019 level. The Roanoke market saw a 4% decline, and the Bristol, Virginia, market a 3% drop.

In Richmond, hotel revenue increased 10.4% from its 2019 levels. The uptick in Richmond is likely due to Gov. Glenn Youngkin’s inauguration, as well as the fact that the General Assembly is in session, Terry said.

The number of rooms sold last month decreased by 23% in Northern Virginia, compared to the number sold in 2019. The Bristol, Virginia, market had a 13% decrease, Williamsburg a 9% decrease, Newport News/Hampton an 8% drop, and Roanoke a 7% decline.

Rooms sold increased by 11% in the Norfolk/Portsmouth submarket, and Richmond had a 6.2% increase in rooms sold.

Hotel industry recovering, but unevenly

The hotel industry will continue its recovery from 2020 this year, but unevenly, according to the American Hotel & Lodging Association’s 2022 State of the Hotel Industry Report.

“Hotels have faced enormous challenges over the past two years, and we are still a long way from full recovery. The uncertainty about the omicron variant suggests just how difficult it will be to predict travel readiness in 2022, adding to the challenges hotels are already facing,” AHLA President and CEO Chip Rogers said in a statement.

The report projects that hotel occupancy rates and room revenue will approach 2019 levels this year. U.S hotel occupancy will average 63.4% for the year, slightly below the 2019 average of 66%. The projection for total room revenue is $168.4 billion, near the 2019 total of $169 billion. In 2020, hotel room revenue fell by almost 50% to $85.7 billion.

While those numbers in some Virginia regions like Hampton Roads and the Greater Richmond area are approaching 2019 levels, Northern Virginia is not, Virginia Restaurant, Lodging & Travel Association President Eric Terry said, as business travel remains down.

Business travel is likely to remain down more than 20% for much of 2022, and 58% of meetings and events are expected to return, according to the AHLA report.

“Bleisure” travelers — those who blend business and leisure travel — and digital nomads are emerging traveler segments. Fly-to-the-meeting and fly-back-from-the-meeting day trips might become a thing of the past, according to the report.

Digital nomads are people who have the flexibility to work from anywhere and decided to travel, and the number of them is expected to grow.

Hotels are expected to employ 2.19 million people — 93% of their 2019 employment levels. In 2020, hotels employed only 1.65 million people.

AHLA also expects to see increased uses of and upgrades to technology, like reservation systems that allow flexible check-in and check-out times and self-service devices.

AHLA created the report in collaboration with Irish Fortune Global 500 company Accenture LLP. It is based on data and forecasts from Oxford Economics and STR Inc., a CoStar Group division that provides market data on the U.S. hospitality industry.