Virginia Hotels: A Banner Year Ahead with Record Taxes and Wages Projected in 2024

The American Hotel & Lodging Association (AHLA) has unveiled state-by-state projections showing that America’s hotels are on track to hit unprecedented heights in tax revenue and employee compensation in 2024. This optimistic forecast signals a robust recovery and growth phase for the industry, with Virginia’s hotels playing a significant role in this national success story.

Tax Revenue Surge: Hotels across the United States are projected to contribute nearly $83.4 billion in federal, state, and local taxes this year. Virginia’s share of this windfall is anticipated to exceed $1.3 billion, of which $541 million is expected from lodging taxes alone. This marks a significant financial contribution to public coffers, highlighting the industry’s pivotal role in supporting community services and infrastructure.

Historic Compensation Levels: The AHLA’s projections also reveal that hotels are set to distribute a record $123.4 billion in wages, salaries, and other forms of compensation in 2024. Virginia’s contribution to this national payout is noteworthy, with over $2 billion earmarked for the state’s hotel employees—an increase of more than $200 million from pre-pandemic figures.

Guest Spending Growth: Alongside these impressive financial contributions, hotel guest spending is forecasted to swell to $758.6 billion nationally in 2024, marking a 5% rise from 2023 and a substantial 24% leap from 2019 levels. Virginia is expected to see more than $14.8 billion in guest spending, a 5.8% increase from the previous year, reflecting the state’s appeal as a prime destination for travelers.

Employment Challenges Persist: Despite these positive trends, the hotel industry faces ongoing challenges in staffing, with a projected 225,000 jobs remaining unfilled nationwide relative to 2019 employment figures. Virginia’s hotel sector is expected to employ 44,397 people in 2024, still 11.5% below pre-pandemic employment levels. The AHLA attributes this gap to a nationwide workforce shortage, exacerbated by near-historic average wages and enhanced employee benefits aimed at attracting new talent.

A Strong Outlook Amid Challenges: AHLA Interim President & CEO Kevin Carey underscored the significance of these projections for the industry’s future, stating, “Historic projections for wage and tax revenue totals point to a strong 2024 for hoteliers.” However, he also acknowledged the obstacles facing the sector, including the labor shortage, inflation, and regulatory challenges, committing the AHLA’s continued efforts to address these issues.

As the hotel industry navigates these hurdles, the projections for 2024 offer a glimpse into a year of potential prosperity and growth. Virginia’s hotels, in particular, stand out for their substantial contributions to the state’s economy through taxes, wages, and guest spending, underscoring the vital role this sector plays in the broader economic landscape.

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