Published on : Thursday, March 26, 2020
At least eight of every 10 hotel rooms in Williamsburg were empty last week. In the rest of Hampton Roads, the dire situation was only slightly better.
The average number of occupied hotel rooms in Hampton Roads from March 15 to March 21 was 32.7%, according to hotel data research firm STR. In Williamsburg, the rate was just 14.8%.
Compare that to a year ago, the week of March 17-23, when 60.6% of Hampton Roads’ hotel rooms were filled. In Williamsburg, the rate was 46.1% a year ago, when hoteliers had also been earning $51.70 in revenue per available room. Last week? $10.35.
“How in the world are they going to stay in business,” said Vinod Agarwal, an economist with Old Dominion University who has been tabulating the data. “That is not going to pay the bills.”
Agarwal said he would be surprised if he didn’t see an even steeper decline in the near future, with occupancy falling to 20% or less in the region.
Hotel declines across the state mirrored what was happening nationwide but started one week later, beginning March 8, according to data Agarwal paired with STR’s information.
In Virginia Beach, the occupancy rate for the week was 28.4%, down from 58.2% a year ago. In Norfolk and Portsmouth, it was 33.8%, down from 68.3%. Chesapeake and Suffolk had the strongest showing last week, but that area also declined with just half of its hotel rooms booked compared to 69.2% a year ago. Newport News and Hampton fell to 43.3%, down from 67.3% a year ago.
Nationwide, occupancy dropped to 30.3% last week and the revenue earned per available room fell nearly 70% to $28.32.
Decreases in revenue earned per available room, “are at unprecedented levels — worse than those seen during 9-11 and the financial crisis,” said Jan Freitag, STR’s senior vice president of lodging insights, in a statement. “Seven of 10 rooms were empty around the country. That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further.”
Occupancy in the San Francisco market has fallen to just 16.6%, nearly tied with New York at 16.8%. New Orleans occupancy has fallen to 20.2% in the past week, according to the company’s data.
The rates hotels have been charging, though, haven’t dropped as precipitously. Among luxury chains, for example, the average daily rate — what customers paid to rent a room for a day — was actually higher at $409.90 last week, up from $371.72 a year ago, according to STR’s data. Occupancy at luxury chains, though, dropped to 10.6%. As a result, the revenue per available room was just $43.37, down from $291.01.
In Hampton Roads, the average daily rate was $67.40, down from $87.80. The revenue per available room, though, was just $22.05.
“I suspect it will get a whole lot worse next week,” Agarwal said.