The Richmond area hospitality industry rebounded strongly in the second half of last year.
Hotels and motels in the area filled guest rooms from July to December at record numbers — and even at higher rates than the same time in 2019, just before the coronavirus pandemic took hold. havoc on the local and national hospitality industry.
According to Richmond Region Tourism, the non-profit organization that markets the region and provides services to support the region’s hospitality industry, national leisure travel, sports tourism and visiting family and friends are cause of the recovery.
Occupants and revenue per available room, key performance metrics in the hospitality industry, were at record highs for this six-month period last year compared to the same period in 2019, when the travel industry around the world, including the Richmond area, had a banner year.
“The numbers amaze me. It’s just amazing,” said Jack Berry, President and CEO of Richmond Region Tourism.
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For example, occupancy rates stood at 59.7% in December, down from 41.9% a year ago and 51.9% in December 2019, according to data provided by the organization compiled by STR Inc. ., a lodging industry research company which is a division of the CoStar Group.
December’s numbers were up 15% from the same month two years ago — a big improvement, Berry said.
Occupancy rates during good 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 from December 2019, according to STR data.
Tourism in the Richmond area is an important economic driver. Improved hotel occupancy levels mean more tourists are eating at area restaurants, shopping at malls, or visiting museums or tourist sites.
The recovery in hotel occupancy levels should also have a positive impact on lodging taxes collected in Richmond and Chesterfield, Hanover and Henrico counties, Berry said.
When COVID-19 hit nearly two years ago, Berry estimated that the fallout from the pandemic could take years for the local hospitality industry to recover.
“At the beginning of 2021, we were still in the throes of the pandemic and people were still afraid to travel. But starting in July 2021, the travel sentiment light switch turned on and people felt confident to travel and all of a sudden everyone is travelling,” Berry said.
Occupancy rates from April to December last year stood at 63.7%, according to STR data. That’s down from the 65.9% rate during the same period in 2019. But the improvement came in the second half, Berry said.
“We really watched the omicron variant to see how much it affected our numbers, and it didn’t affect the numbers because sport tourism still keeps us in shape,” he said.
The hotel occupancy trend continues in 2022, he said.
The region will host or has hosted 23 events in the current first quarter, up 26% from the same period in 2021.
Gubernatorial inauguration weekend in January filled many area hotels, he said. Last weekend, a cheerleading event drew 8,000 girls and their families while hundreds attended a convention promoting the state’s cider industry. A fencing tournament is scheduled for this 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 the first weekend of April for the annual Jefferson Cup youth soccer tournament. Around 1,600 teams are expected to compete during the tournament.
“Sports tourism has saved our lives,” said Nick Patel, president of Kalyan Hospitality, a Henrico County-based hospitality company that operates 19 hotels in Virginia and two other states. It has five locations in the Richmond area, including a Residence Inn by Marriott near Broad Street Road, just east of State Road 288 in Goochland County.
His company’s hotel properties are almost back to where they were in 2019, he said.
“We had a good push in the fourth quarter of 2021 which was quite strong. It was actually stronger than 2019,” Patel said. “There was a lot of leisure travel, including vacation 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 area, said sports tourism and leisure travel had been a great help for his business.
“Sports tourism has really carried us because not all tournaments have been cancelled, and so it has had a significant impact on our business,” said Ravi Patel. “We also see people who want to travel. We find that people are less afraid to go out and be with family and that kind of stuff, so we welcome a lot of families.
Business at hotels in his area has not returned to where it was in 2019. “We are definitely seeing a rebound, but that’s not quite where the 2019 numbers are, but they are. closer,” said Ravi Patel.
Business travel, however, remains down, he and others in the hospitality industry said.
One demographic that has seen a surge in local hotel traffic are those who have come to the area temporarily to work on infrastructure and other construction projects, Nick Patel said.
Throughout the fall, Nick Patel said, many rooms at Kalyan Hospitality properties were occupied by people working on different projects. “All of these infrastructure projects going on in the Richmond area have really helped,” he said.
Much of the traditional business travel during the week has yet to return, Nick Patel said.
Another type of business travel is the need for accommodations for those working on infrastructure projects, he said. “It’s a lot of blue collar travel.”
According to Richmond Region Tourism’s Berry, December occupancy levels in the region were particularly high due to the influx of contractors working on replacing and upgrading computers at VCU Health.
There were 16,000 room nights booked throughout the month to manage the number of technicians and contractors working on the project, he said.
“That December was so over the top. It was huge,” Berry said. “In December, you usually only get family and friends. You have no conventions. You don’t have much else to do. The area hosted one of our biggest deals in December.
The new public infrastructure bill President Joe Biden signed into law in November could also mean more workers coming to the area and needing housing, Berry said.
“They could take thousands of nights,” he said. “The Infrastructure Bill contains the necessary elements for a massive influx of overnight stays in the future.”
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