One of the most beleaguered industries during the COVID-19 pandemic was in full focus during a Thursday morning Zoom talk hosted by Sen. Tim Kaine (D-VA) and Rep. Jennifer Wexton (D-VA-10).
The tourism and hospitality industry has taken one of the hardest hits during the pandemic and its leaders are still struggling with supply chain issues, staffing shortages, and revenue losses that mean full recovery could still be years away.
Visit Loudoun CEO Beth Erickson said there are “pockets of good news” when looking at hotel occupancy rates in Loudoun County. However, even with recovery beginning, particularly when it comes to leisure travel, occupancy rates last year were still 17% below 2019 levels, and revenue per available room lagged 22% behind compared to two years prior. The tourism body’s forecasting now puts the total loss incurred by the county’s hotel industry since the pandemic began at $170 million.
Vinay Patel, who owns several hotels in the state including in the Northern Virginia market as president of Fairbrook Hotels, emphasized that, while occupancy overall is back, the average rate per hotel room is down considerably. He pointed to a hotel room at one of his Hampton Inn properties that now produces an average nightly rate of $100, as opposed to $170 prior to the start of the pandemic.
“I’m still paying the same amount for running the hotel, but my revenue has dropped by 40 to 50%,” he said. “The plight we have here, it’s a long-term problem.”
Many on the call pegged the lagging recovery on the slow return of business and corporate travel. Some even took the federal government to task for being wary about returning to in-person conferences, and encouraged Kaine and Wexton and their congressional colleagues to do their part to aid in the recovery.
“This area is dominated by commercial and government travel. That is the engine by which we all make big bets in building hotels and facilities to support them. With them not being in the office and not engaging in what would be normal training, meetings and welcoming people to offices the impact has been very dramatic,” said Mark Carrier, senior officer at B.F. Saul Company Hospitality Group.
“Our corporate travel at the National Conference Center has basically gone away,” said John Walsh, general manager of the conference center. “It’s tough on a facility to operate at 18% of normal sales.”
The impact on the tourism and hospitality industry is being felt even by those businesses that serve them. Katie Schneider owns Promo – The Marketing Management Group Inc. in Ashburn and supplies businesses with promotional products and branding services.
“If I don’t have restaurants that need uniforms, no conferences that need swag bags, I don’t have work,” she said. “When you think of the industries that are suffering, you have to think of the industries supporting those industries.”
Other parts of the state, by comparison, have recovered more fully because of their predominant reliance on leisure or sports travel, like Virginia Beach and Hampton Roads, speakers said.
Scott Hamberger of Sterling Restaurant Supply pointed to how recovery looks in different parts of the country, and attributed a lot of economic activity to messaging and perception.
“Look at the markets that have recovered and the markets that have not,” he said. He pointed to the hotels and restaurants his companies supply in Miami and New York City. In South Beach, his company’s business is back to 80% of what it was pre-COVID; in the Big Apple it’s still only at 20% of pre-pandemic levels.
“Those markets that are more open, that are leaning into travel, are recovering. If we’re going to talk about how to stimulate the industry, we need to think about our attitude towards being open,” he said.
To view a video of today’s talk here.