Bacon's Rebellion

Democracy Thrives in Sunlight

Chart of the Day: Revenue per Hotel Room

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by

James A. Bacon
in

Source: "State of the Region: Hampton Roads 2016"
Source: “State of the Region: Hampton Roads 2016”

As Virginia casts around for an industry to lead the way in economic growth, don’t look to the hotel sector. Hotels in Virginia have severely under-performed the national average as measured by a key indicator, revenue earned per available room (REVPAR). The chart above, taken from the “State of the Region: Hampton Roads 2016” compares the change in this metric over the course of the current business cycle for the U.S., Virginia, Hampton Roads and various sub-markets in Hampton Roads.

Don’t blame Airbnb, says the report, which was produced by the Center for Economic Analysis and Policy at Old Dominion University. “There is little mystery attached to the causes of the under-performance of the hotel industry in Virginia in recent years. The combination of the Great Recession plus federal government budget sequestration constituted powerful blows from which the industry has yet to recover.”

Aggravating the tumble in demand, the supply of hotel rooms in Virginia increased between 2006 and 2015, creating oversupply. If there’s a silver lining says the report, supply has leveled off — it’s actually a tiny bit smaller than in 2010. “Nonetheless, happy days are not likely to return until federal spending in the Commonwealth, especially for defense, revives.”

— JAB

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One response to “Chart of the Day: Revenue per Hotel Room”

  1. Larrytheg Avatar
    Larrytheg

    We should recognize that any sequester advocacy is really an advocacy for either raising taxes to increase defense spending OR adding more to the deficit and debt to increase defense spending – because cutting entitlements – to spend those cuts on defense is not a net increase in spending in the economy – it’s just switching what we are paying for – from medical to defense.

    cutting entitlements to shunt that money to defense ignores the fact that when you cut entitlements -you also cut the money those entitlements also put into the economy so basically you’re just trading doctors and x-rays for tanks and soldiers… and in the end – unless you think Virginia would not suffer equal cuts to it’s entitlements and only net increases to DOD – it’s not really a net increase in spending. you’re just cutting X from entitlements and increasing X to defense.

    beyond that – all the “business” folks – who I’m sure , read the Wall Street Journal and IBD every day to be “informed” about the economy and vote GOP every chance.. they should be ashamed for their blatant pro-tax, pro-deficit “spending plans”.

    So basically what they’re advocating is cutting entitlements to Medicare/MedicAid in RoVa so the money can be transferred for ship-builders in Hampton Roads.

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