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Market Report

Central Atlantic Hospitality Investment Forecast

2022 Outlook

Smaller Markets Drive Occupancy Gains, Expanding the Region's Investor Pool

Recovery gains ground outside of the District. Hotel fundamentals significantly improved over the past year; performance, however, still remains well below the region's pre-pandemic marks entering 2022. The combination of canceled events and reduced travel from businesses, schools and foreign visitors significantly hindered the recovery of hotels inside Washington D.C. As of December, annual occupancy inside the District was at 41 percent, roughly 1,450 basis points below the region's average. Hotels in smaller markets like Richmond and Virginia Beach have fared much better as of late. Demand from postponed weddings, sports tournaments and special events boosted visitation to Richmond, elevating annual occupancy within 20 basis points of the market's 2019 average. Meanwhile, the shift in travel preferences to regional, outdoor activities resulted in a surge in overnight stays in Virginia Beach, lifting annual revenue metrics above the market's pre-pandemic mark in 2021. Moving forward, the reopening of museums inside the District, along with the easing of international travel restrictions, will bolster visitation, facilitating additional gains in occupancy and RevPAR regionwide this year.
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