United States -  Norfolk - Virginia Beach

Norfolk is part of the greater Hampton Roads economy, which is largely driven by the government and military sectors. The Hampton Roads area, which comprises several cities, including Norfolk, Williamsburg, Hampton, Newport News, Suffolk, Portsmouth, Virginia Beach, among others, is home to eleven major military installations representing all branches of the U.S. Armed Forces, including the world's largest naval base, Naval Station Norfolk. These military stations, as well as related defense contracting firms, generate significant demand for the market. The healthcare and education sectors, as well as leisure attractions, are the other primary demand generators for the market.

Norfolk has been experiencing growth in recent years, and revitalization efforts are continuing throughout the downtown and waterfront areas. The Waterside District, City Walk, and Norfolk Premium Outlets developments should continue to promote the area as a retail and entertainment destination. The healthcare sector is strengthening with the recent expansion of Sentara Leigh Hospital, the creation of the Bon Secours Cancer Institute at DePaul, and the ongoing $199-million expansion of Sentara Norfolk General Hospital, which is expected to be completed in 2020. The Hampton Roads area is anticipated to experience higher demand levels as the military and government sectors gain momentum under the current administration.

Supply has stabilized in recent years, coupled with numerous closings of older hotels. A notable hotel opening in Norfolk was the 300-room Hilton Norfolk at The Main (a mixed-use entertainment, meeting, dining, and hotel venue) in March 2017. Additional supply growth in 2017 occurred in Chesapeake and Virginia Beach with the opening of a Holiday Inn Express and a Hyatt House, respectively. Supply growth is expected to be limited in the near term, which should bode well for occupancy levels at existing hotels.

Transaction activity has been steady in the Hampton Roads market since early 2017. The Marriott Norfolk Waterside sold in November 2017 for the highest price per room in the market at $91,358 per key. Of the confirmed hotel sales in the market area, the average sale price is roughly $70,000 per key. Hotel values should realized moderate growth in the coming years, supported by a strong government sector and the RevPAR growth experienced in 2017.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Norfolk - Virginia Beach RevPAR Change

Norfolk - Virginia Beach RevPAR

Year RevPAR
2007 $52.93
2008 $48.28
2009 $45.99
2010 $44.82
2011 $45.40
2012 $47.33
2013 $46.95
2014 $49.30
2015 $53.90
2016 $59.60
2017 $62.64
2018 (f) $64.21
2019 (f) $66.14
2020 (f) $68.14

For more information, please contact:

Chelsey Leffet
[email protected]
  • +1 202 434-8793 (w)
  • +1 302 740-2772 (m)