NORFOLK, Va. — While COVID-19 remains an ongoing battle across the country, economists at Old Dominion University (ODU) said things are looking up for Hampton Roads in 2022.
A rebound in the hotel industry in 2021 is a strength that economists said carried into 2022 for the seven cities. But it's more than just a rebound in Hampton Roads, though.
Vinod Agarwal, director of ODU’s Economic Forecasting Project said the hotel industry recouped all its losses.
“It did not recover somewhat, it was amazing,” Agarwal said. “Hotel revenues have increased by nine percent of what they were in 2019.”
Agarwal said the area relies on driving travelers, which worked well at the height of pandemic travel restrictions. Although things are looking good for now, that could change.
“We are still forecasting an increase of hotel revenue, but it will depend if people can go on cruises or international travel,” Agarwal said.
Watch ODU's address on the Hampton Roads economy here:
While many ports across the United States are taking hits from the supply chain, Agarwal said the Port of Virginia is on fire.
“Port cargo tonnage increased like nobody’s business,” Agarwal said.
He said the port will hit new cargo records this year.
“That is good for our area,” Agarwal said. “Investments made in the port are paying off.”
ODU economists expect defense spending to increase again, about 3.5 percent, which is always a major boost.
“Roughly 40% of economic activity is related to DoD spending,” Agarwal said.
But the good news is balanced with some bad news. ODU Dragas Center Director Bob McNab said inflation is climbing and jobs are even harder to fill.
“If employers are not willing to offer higher wages, people leave,” McNab said. “And that is going to increase through 2022 and may be something we have to live with because baby boomers’ retirements are accelerating.”
Both economists agree that employers need to focus on the recruitment and retention of workers in 2022.
Another downfall of this year, ODU economists said people shouldn’t expect those low mortgage rates we saw over the last two years. In fact, they said some people will have a harder time qualifying.