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.