Large-scale government activity (including national and international contractors), tourism, and local businesses all continue to provide consistent lodging demand for the Washington, D.C. market. While the downturn of 2008 and 2009 severely affected the national lodging market, it had less of an impact on the Washington, D.C. area given its status as the nation's capital, its reliance on meeting and group demand, and the presence of much of the federal government infrastructure. Thus, RevPAR fell by only 8.6% in 2009, compared to the average 19.0% decline experienced by the top 25 major lodging markets in the U.S. New supply, as well as government sequestration and temporary government shutdowns, caused declines in occupancy throughout the historical period. Conversely, presidential inaugurations have positively affected the performance of area hotels, including in 2017, although this year also experienced a demand influx from the Women’s March event in January, resulting in a correction the following year. Washington, D.C.'s role as the nation’s capital, its strong corporate and institutional sectors, and the array of tourist destinations have historically supported a strong lodging market.

The Washington, D.C. market has been severely affected by the COVID-19 pandemic and the related decline in travel. The magnitude of the decline in D.C. was more significant than that experienced by the U.S. lodging industry as a whole; data indicate that D.C.'s rebound has also been slower than that of the United States as a whole, largely due to this area's significant reliance on the meeting and group segment. The suburban markets have fared better than the District, with more commercial and leisure travel occurring in those areas, but group room nights remain low throughout the region. Occupancy data illustrate a promising rebound; however, this metric is somewhat skewed by the increase in occupied room nights associated with the presidential inauguration and related gatherings in January 2021. ADR growth has also been constrained by the lack of higher-rated demand from international corporate, government, and leisure sources. Despite the anticipated slow recovery of ADR, which will likely take years to rebound, our experience suggests that investors continue to perceive Washington, D.C. hotels as an attractive long-term investment.

* 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.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

Change In Value For Market:

Washington DC RevPAR Change

Washington DC RevPAR

For more information, please contact:

Chelsey Leffet Managing Director, Northeast Leader Valuation, Market & Feasibility Consulting [email protected] +1 302 740-2772 (m)