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Market Report

Washington, D.C. Hospitality Market Report

2023 Investment Forecast

Regional Trips Amid Elevated Airfare and a Gradual
Business Travel Revival Enable Occupancy Lift

Ongoing rebound permits seventh-largest occupancy gain nationally. The road back from 2020’s pandemic disruption has been choppy for Washington, D.C., but the recovery will continue into this year, despite emerging economic challenges. Entering 2023, the metro’s 12-month average occupancy metric trailed the pre-pandemic equivalent by 880 basis points, ranking as the sixth-largest shortfall among major U.S. markets during that span. Other metros with comparable differences like New York City, San Francisco and Philadelphia share similar characteristics — historically-favored international tourist destinations with a substantial business travel component. As pandemic-related restrictions in the U.S. have largely been removed and countries across the world are enacting more lenient policies, inbound trips from overseas may continue to ramp up during 2023. The same trend should apply for business-related visitations, as more conferences are held in person and government personnel venture to the market. On the leisure front, high airfare costs amid broader inflation could encourage Northeast households to plan trips closer to home, benefiting Washington, D.C. as it stands within 250 miles of Baltimore, Philadelphia, New York City and Northern New Jersey — which contain a combined 21 million individuals. 
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