Please ensure Javascript is enabled for purposes of website accessibility
Upcoming Event

Best Places to Work in Virginia

Hamburger Menu Hamburger Menu

Tag: VRLTA

Hotels hit by supply chain disruptions

Supply chain disruptions are negatively affecting business revenue for nearly three in four hotels (74%), according to survey results released Wednesday from the American Hotel & Lodging Association (AHLA).

Supply chain disruptions were moderately or significantly impacting operations of 86% of respondents. More than half (52%) reported that the issue had worsened over the past three months.

“Hotels have a complex supply chain that requires regular procurement of a wide range of goods and services each day. And whether it’s production backups or shipping delays, supply chain disruptions are compounding hotels’ existing problems and increasing operating costs during an already tough time,” AHLA President and CEO Chip Rogers said in a statement.

Forty-six percent of respondents say they expect disruptions to last six months to a year, and 36% say they expect them to last more than a year.

Eighty-five percent of hotels surveyed said they were experiencing a lack of availability for linens and other soft goods. Seventy-six percent said they faced a shortage of food and beverage supplies, and 72% said the same with cleaning and housekeeping supplies.

Supply chain issues have left hotels across Virginia scrambling, Virginia Restaurant, Lodging and Travel Association President Eric Terry said. In order to accommodate guests, some have had to deviate from chains’ dictated linens and bathroom amenities in favor of what is available.

“It’s affecting food products as well,” Terry said. “Things that they’re anticipating getting in from a food and menu perspective they’re just not able to do.”

Of those surveyed, 77% reported experiencing increased costs for linens and soft goods, 77% for food and beverage supplies, and 79% for cleaning and housekeeping supplies.

AHLA conducted the survey of more than 500 members from Nov. 8 to Nov. 22.

Va. hotel revenues continue to lag from 2019 levels

Virginia hotel revenues for October were 20% below pre-pandemic levels in October 2019, according to newly released data from 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 13% compared with 2019 levels. The average daily rate (ADR) paid for hotel rooms decreased by 8% to $105.03, while revenue per available room (RevPAR) fell to $60.34, a 20% decrease from its October 2019 level.

The October ADR is a slight improvement from 2020 levels, but Virginia Restaurant, Lodging & Travel Association President Eric Terry has said that comparisons to 2019 numbers are more balanced than comparisons to 2020. In the first full week of October, the ADR was $86.68, and the RevPAR was $44.76. From Oct. 11 through Oct. 17, the ADR was $87.75, and RevPAR $44.39. For the week of Oct. 18 through Oct. 24, Virginia’s ADR was $86.81, and its RevPAR $44.36, and in the last week of October 2020, the ADR was $83.62, and the RevPAR $38.37.

Northern Virginia continues to suffer from a lack of group meetings and corporate and government travel, Terry said.

“We did fare a little bit better in the month than we have been,” he said, “but Northern Virginia continues to be a struggle in terms of both rate and occupancy…That’s our highest concentration of hotel rooms, so it’s certainly the most impacted area.”

The labor market seems to have improved a bit, Terry said, but there haven’t been dramatic changes for hotels.

Hampton Roads had revenues 8% higher than those recorded in October 2019. Hampton Roads hotel industry also continues to outperform the top 25 markets in the nation in terms of growth in both revenue and RevPAR, according to a news release from Old Dominion University’s Dragas Center for Economic Analysis and Policy.

In Northern Virginia, hotel revenue decreased 49% compared with October 2019 levels. The Richmond market had an 8% decrease. The Roanoke market saw a 15% decline, and the Charlottesville market 9%, but those account for 6% of the state’s total hotel revenue in 2019. “Essentially, the Northern Virginia market, which accounted for 43% of the revenue generated in the commonwealth in 2019, is responsible for the 2021 decline,” according to ODU’s news release.

The number of rooms sold last month decreased by 33% in Northern Virginia and 10% in Charlottesville compared with October 2019. Hampton Roads had a 2% decrease in hotel rooms sold. The Chesapeake/Suffolk submarket had an increase of 4% in rooms sold.

Va. hotel revenues remain below 2019 levels

Virginia hotel revenues for September decreased by 21% compared with pre-pandemic levels in September 2019, according to newly released data from 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 6%. The average daily rate (ADR) paid for hotel rooms decreased 2% from the September 2019 rate to $112.50, while revenue per available room (RevPAR) fell to $69.38, an 8% decrease from its September 2019 level.

The September ADR is a slight improvement from 2020 levels, but Virginia Restaurant, Lodging & Travel Association President Eric Terry has said that comparisons to 2019 numbers are more balanced than comparisons to 2020. In the first full week of September 2020, the ADR was $90.28, and the RevPAR was $41.81. From Sept. 13 to Sept. 19, Virginia hotel’s ADR was $88.27 and its RevPAR $42.41, and for the week ending Oct. 3, the ADR was $86.20 and the RevPAR $41.25.

The concern continues to be Northern Virginia, which is suffering from a lack of corporate and government travel as well as group meetings, Terry said.

“We’re seeing some basic recovery in Hampton Roads and Richmond and those areas, but just not so much in Northern Virginia,” he said. “Unfortunately, that’s the bulk of our hotel rooms. We have more hotel rooms in Arlington than in any other jurisdiction in the state.”

Arlington has a 48% hotel room occupancy rate, and the Tysons/Fairfax area a 51% rate, he said.

In Northern Virginia, hotel revenue decreased 39% compared with September 2019 levels. The Charlottesville market saw a 1% increase from its September 2019 revenue, and the Hampton Roads market had a 21% increase. Revenues increased in all Hampton Roads submarkets — by 8% in Williamsburg, 10% in Newport News/Hampton, 19% in Chesapeake/Suffolk, 20% in Norfolk/Portsmouth and 31% in Virginia Beach.

The number of rooms sold last month decreased by 24% in Northern Virginia and 10% in Charlottesville compared with September 2019. Hampton Roads’ number was unchanged, although the Norfolk/Portsmouth submarket had an 8% increase in rooms sold.

Va. hotels expect $1.5B loss in 2021 biz travel

The Virginia hotel industry expects to take a $1.5 billion loss this year stemming from sharply reduced business travel — 63.5% below pre-pandemic revenue levels, according to projections released Wednesday by the American Hotel & Lodging Association.

Business travel is expected to generate about $864.5 million for hotels in Virginia for the 2021 calendar year, down from $2.37 billion in 2019, according to the August study conducted for the AHLA by Potomac, Maryland-based Kalibri Labs, a data analytics firm focused on the hospitality industry. “Business travel” in the report refers to corporate, group, government travel, along with business from other commercial categories.

The Washington, D.C., region’s hotel market is expected to end 2021 with $371 million in business travel revenue, down almost 87% from the 2019 total. And the Virginia Beach market is projected to generate $281 million from business travel this year, a decline of about 41% from the area’s 2019 revenue.

“We’re very concerned about the lack of business travel in the state,” Virginia Restaurant, Lodging & Travel Association President Eric Terry said. “That’s what drives hotel profitability. I think it’s going to be a long time before we see the industry recover.”

The national hotel industry’s business travel revenue is projected to be down by more than $59 billion compared with 2019. National business travel revenue was down nearly $49 billion in 2020 and is not expected to reach pre-pandemic levels until 2024, according to the AHLA.

“While some industries have started rebounding from the pandemic, this report is a sobering reminder that hotels and hotel employees are still struggling,” AHLA President and CEO Chip Rogers said in a statement. “Business travel is critical to our industry’s viability, especially in the fall and winter months when leisure travel normally begins to decline.”