Va. hotel revenues still down by more than 60%
American Hotel & Lodging Association predicts it will take years to get back to pre-pandemic demand
Even as Phase Three of Virginia’s reopening plan looms on the horizon, Virginia hotels are continuing to see revenues dropping. in the second week in June by 64% compared to the same time a year ago, according to findings released Thursday by Old Dominion University’s Dragas Center for Economic Analysis and Policy.
Rooms sold were also down by 47% and the average daily rate for paid hotel rooms dropped 32% to $84.39, compared to 2019.
“We have seen slight improvement in room revenues as well as in rooms sold this week over the last week,” Dragas Center Deputy Director Vinod Agarwal said in a statement. “We should brace ourselves for a continued slow rebound as the nation and the commonwealth largely reopens from COVID-19, however. It will take time for business and leisure travelers to fill rooms again.”
Hendersonville, Tennessee-based hospitality data company STR sends data to the Dragas Center each week for analysis.
Revenues fell 81% in Northern Virginia, 71% in Charlottesville and 47% in Hampton Roads, as compared to June 2019. During the past four weeks, Williamsburg has continued to be the hardest hit, though, with hotel revenues falling by 87%, rooms sold dropping by 76% and occupancy declining by 70%.
Nationally, it’s predicted that state and local tax revenue from hotel operations will drop by $16.8 billion in 2020, according to an Oxford Economics report released Thursday by the American Hotel & Lodging Association (AHLA). In 2018, the hotel industry generated nearly $40 billion in state and local tax revenues in the U.S., according to the report.
“Getting our economy back on track starts with supporting the hotel industry and helping them regain their footing,” AHLA President and CEO Chip Rogers said in a statement. “Hotels positively impact every community across the country, creating jobs, investing in communities, and supporting billions of dollars in tax revenue that local governments use to fund education, infrastructure and so much more. However, with the impact to the travel sector nine times worse than 9/11, hotels need support to keep our doors open and retain employees as we work toward recovery.
“We expect it will be years before demand returns to peak 2019 levels.”
During the pandemic, more than 70% of hotel employees have been laid off or furloughed, according to the AHLA, and 2020 is expected to be the worst year on record for hotel occupancy.
Norfolk/Virginia Beach offered a small glimmer of hope last week as the only one of the top U.S. markets to reach a 50% occupancy level, according to STR data. The next highest occupancy levels were in Phoenix, New York City and Tampa/St. Petersburg, Florida. The second week of June 2020 ended with a 41.7% (a 2.4% bump up from the previous week) occupancy rate average, compared to the 2019 average occupancy rate of 66.1%.
“Powered by the slow and steady rise in weekly demand, the industry clawed its way above 40% occupancy,” Alison Hoyt, STR senior director of consulting and analytics, said in a statement. “That was still down substantially from the comparable week last year (73.6%) but an obvious improvement from the country’s low point in mid-April. As we have noted, the drive-to destinations with access to beaches, mountains and parks continue to lead the early leisure recovery. With more consistent demand, we’re beginning to see more pricing confidence in those areas as well.”