The hotel industry in the Richmond region made a big rebound in the second half of last year.
Hotels and motels in the region filled rooms with guests from July through December at record numbers – and even at higher rates than in the same time period in 2019, which was just before the coronavirus pandemic took a toll on the local and national hospitality industry.
Driving the recovery is domestic leisure travel, sports tourism and those visiting family and friends, according to Richmond Region Tourism, the nonprofit organization that markets the region and offers services to support the area’s hospitality industry.
Occupancy numbers and revenue per available room, key performance metrics in the hotel industry, stood at record levels for that six-month period last year compared with the same time in 2019, when the travel industry worldwide including the Richmond region had a record year.
“The numbers just blow me away. It’s just amazing,” said Jack Berry, president and CEO of Richmond Region Tourism.
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For instance, occupancy rates stood at 59.7% in December, up from the 41.9% rate a year ago and 51.9% rate in December 2019, according to data supplied by the organization compiled from STR Inc., a lodging industry research firm that is a division of CoStar Group.
December’s figures rose 15% compared with the same month two years ago – a strong improvement, Berry said.
Occupancy rates during healthy economic times and peak summer travel tend to be around 70% to 72%.
Revenue per available room was $56.38 in December, an increase of $10.79 compared with December 2019, the STR data shows.
Tourism in the Richmond region is a big economic driver. Improvement in hotel occupancy levels means more tourists eat at area restaurants, shop at malls or visit museums or tourist sites.
The upturn in hotel occupancy levels also should have a positive impact on the lodging taxes collected in Richmond and in Chesterfield, Hanover and Henrico counties, Berry said.
When COVID-19 hit nearly two years ago, Berry figured that the fallout from the pandemic could take years for the local hotel industry to recover.
“In early 2021, we were still in the throats of the pandemic and people were still afraid to travel. But then starting in July of 2021, the travel sentiment light switch went on and people felt confident to travel and all of a sudden everybody’s traveling ,” Berry said.
Occupancy rates from April to December last year stood at 63.7%, the STR data shows. That’s down from 65.9% rate during the same period in 2019. But the improvement came in the second half of the year, Berry said.
“We’ve really been watching the omicron variant to see how much that has affected our numbers and it hasn’t affected the numbers because sports tourism is still keeping us up,” he said.
The trend in hotel occupancy is continuing into 2022, he said.
The region will host or has hosted 23 events during the current first quarter, up 26% compared with the same period in 2021.
The weekend of the gubernatorial inauguration in January filled many of the region’s hotels, he said. This past weekend a cheerleader event drew 8,000 girls and their families while hundreds of people attended a convention promoting the state’s cider industry. A USA Fencing tournament is slated for this coming weekend.
Next month, tens of thousands of people from across the country are expected to flood the area during the last three weekends of March and first weekend in April for the annual Jefferson Cup youth soccer tournament. About 1,600 teams are expected to compete over the course of the tournament.
“Sports tourism has been a lifesaver for us,” said Nick Patel, president of Kalyan Hospitality, a Henrico County-based hotel company that operates 19 hotels in Virginia and two other states. It has five locations in the Richmond region including a Residence Inn by Marriott off Broad Street Road just east of state Route 288 in Goochland County.
His company’s hotel properties are nearly back to where they were in 2019, he said.
“We had a good push in the fourth quarter of 2021 that was pretty strong. It was actually stronger than in 2019,” Patel said. “There was a lot of leisure travel going on, including holiday travel.”
Ravi Patel, CEO of SINA Hospitality, a Chesterfield County-based hotel company that operates 26 hotels in five states including four properties in the Richmond region, said sports tourism and leisure travel have been a big help for his business.
“Sports tourism has really carried us through because not all the tournaments were canceled, and so that’s had a significant impact on our business,” Ravi Patel said. “We’re also seeing people who want to travel. We’re seeing that people are less afraid to go out and be with their families and that sort of thing, so we get a lot of families.”
Business at his area hotels isn’t back to what it was in 2019. “We’re certainly seeing a rebound but it is not quite where 2019 numbers are, but they’re getting close,” Ravi Patel said.
Business travel, however, remains down, he and others in the hospitality industry said.
One demographic that has seen a big uptick in local hotel traffic is those who have come to the region temporarily to work on infrastructure and other construction projects, Nick Patel said.
Throughout the fall, Nick Patel said, many the rooms at Kalyan Hospitality’s area properties were occupied by those working on different projects. “All of those infrastructure projects going on around the Richmond area has really helped,” he said.
Much of the traditional corporate business travel during the week hasn’t returned yet, Nick Patel said.
The need for accommodations for those working on infrastructure projects is a different type of business-related travel, he said. “It is a lot of blue collar travel.”
December occupancy levels in the region were especially strong because of the influx of contractors who were working on replacing and upgrading computers at VCU Health, according to Richmond Region Tourism’s Berry.
There were 16,000 room nights booked throughout the month to handle the number of technicians and contractors working on the project, he said.
“This December was so over the top. It was that huge,” Berry said. “In December you usually just get family and friends. You don’t have conventions. You don’t have much of anything else going on. Well we put one of our biggest pieces of business together [in December] that we’ve ever done.”
The new public infrastructure bill that President Joe Biden signed into law in November also could mean more workers coming to the region and needing places to stay, Berry said.
“They could be taking up thousands of room nights,” he said. “The infrastructure bill has the components for huge influx of room nights in the future.”
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