PORTSMOUTH, Va. (WAVY) – As the global economy continues to rebound from COVID-19, the economic future of Hampton Roads is looking bright, at least for the hotel industry.

An Economic Analysis from Old Dominion University shows local January 2023 hotel revenue is higher than January 2019 levels.

ODU Director of Economic Forecasting Project Vinod Agarwal said it’s all thanks to travelers choosing to drive to Hampton Roads.

“Hotel industry in Hampton Roads essentially depends on what I call leisure travelers,” he said.

Thanks to leisure travelers – those who travel a few hours for a vacation – increased hotel revenues in Hampton Roads is a trend also seen in the last few years, as the impacts of the pandemic weakened.

“People have been afraid to go long distances,” Agarwal said. “So they travel shorter distances. That is what actually led to a substantial increase in hotel revenues in 21 and in 2022.”

Business travel though continues to decrease, impacting areas like Northern Virginia. Hotel revenues there still haven’t recovered post pandemic.

“If we were dependent on business travelers, which is what is happening in Northern Virginia, we would be in trouble,” he said.

A big question is how long this will continue.

“The demand for travel by car, by leisure travelers who travel by car, is not going to be as great as it was in ‘21 and ‘22,” Agarwal said.

The reason is more people are opting to travel farther distances, including internationally or by going on cruises.

Local events like Something In The Water Festival or the new Beach IT festival and new attractions like the Rivers Casino Portsmouth help encourage travel to our area. Yet one thing could discourage people from booking an overnight stay.

“I think if the hoteliers continue to increase their rates, substantially, they might find themselves in the hole,” he said. “What needs to happen now is to stabilize the rates.”

It’s still too early to know how the casino would impact the Hampton Roads economy.

To see more of their report, head here.