In July, more than 1,000 world-class athletes and their families visited Roanoke for the USA Cycling Endurance Mountain Bike National Championships — the first of two years the championship will be held in Roanoke.
The Roanoke region is becoming a destination for large outdoor athletic events and competitions. Last year, Roanoke hosted its second IronMan race, and conversations are ongoing about bringing the race back to the region in coming years. In April, almost 3,000 athletes participated in the annual Blue Ridge Marathon, which starts and ends in downtown Roanoke. The marathon, which is now 15 years old, brings in $1.7 million in economic impact annually.
The region could attract more events of this size, and larger ones, with a greater hotel capacity, said Marc Nelson, the city’s director of economic development.
The city’s office of real estate valuation estimated that 450 to 500 hotel rooms are needed citywide, after three hotel closures in recent years. Across the region, Kathryn Lucas with Visit Virginia’s Blue Ridge, the regional tourism organization, estimated a 10% reduction in total room inventory from 2020 to 2024. She cited data from Smith Travel Research, which estimates that regionwide, there are over 5,000 hotel rooms currently, including three full-service hotels —- with conference rooms and meeting space — with almost 700 rooms.
Lucas said the math suggests a 15.2% deficit in room supply regionally since 2019.
In 2023, the Roanoke region saw over $800 million in direct spending from visitors, said Debora Wright, chief strategist, vice president with VBR. Lodging accounted for $180 million of that, according to Pete Eshelman, senior director of creative strategies with the Roanoke Regional Partnership.
Post-pandemic, it’s harder for developers to secure funding to start new hotels.
Roanoke recently introduced a new hotel tax abatement program in an attempt to attract developers and fill the gap. Salem has set aside $50,000 in its budget for a hotel feasibility study, and Vinton is introducing its first major hotel.
“If everybody puts a little water in a lake, it makes everybody’s boat rise, right?” Landon Howard, president of VBR, said in a recent interview.
Up to 500 hotel rooms are needed in Roanoke alone
Using CoStar Travel Research data from May, Visit Virginia’s Blue Ridge estimates the city of Roanoke has 2,194 hotel rooms currently, a reduction of over 600 rooms since 2020.
Based on market occupancy, there is an estimated deficit of approximately 450 to 500 rooms in the city, said KC Bratton, director of real estate valuation in Roanoke.
On June 2, Bratton recommended that the city council reup another five years of the city’s tax abatement program — this time, with a special program for hotels.
An analysis completed by the Office of Real Estate Valuation from 2020 to 2023 found a loss of 609 hotel rooms in the city due to the closure of several large hotels, not for lack of a market but for other unrelated reasons. Bratton said a couple more hotels closed after that study was completed, and a couple of smaller ones opened, without significantly changing the net loss that the city is looking to address.
To qualify for the tax abatement program, a new hotel must be valued at 120% or more of the assessed value of that hotel class in the city.
Annually, a qualifying hotel will receive a tax credit equal to the difference between the initial value of the property, and the final value post-build or renovations.
The program will last five years, or until 500 hotel rooms are added. Hotels built in conservation districts, rehabilitation districts or enterprise zones will profit from the program for up to 15 years.
In doing a case study, the office of real estate valuation found that the loss of a 150-room hotel in the city would result in a loss of $750,000 in annual revenue — in occupancy tax, sales tax and food and beverage tax related to the hotel.
Bratton said the city would much rather implement a program like this than lose that much revenue from closed hotels. If the goal of 500 rooms is hit, Bratton suggests that the city would see a 15-year revenue total of over $14 million.
The hope is that this program will encourage hotel developers to build in the city, at a time when it’s become more difficult for them to open hotels.
During and after the coronavirus pandemic, Nelson said, banks were hesitant to fund hospitality projects without “a lot of equity put on the table” by the developer.
“I think they just found more of a payoff in housing and multifamily housing and apartments, and things like that,” Nelson said. “That’s why this program is really helpful.”
Going into the pandemic, there were a couple of hotel projects on the drawing board whose developers struggled to find investors to “close the gap” of funding needed up front, he said.
One is a midrange hotel on the corner of Church Avenue and Williamson Road, which would need space for a parking garage, making the project a challenge, Nelson said.
Another is in downtown Roanoke, on the site of the former Pinnacle Bank building on the corner of Church Avenue and First Street. It involves two different hotels — one aimed toward younger travelers and more “moderately priced,” the other an extended-stay property — totaling 180 rooms.
Kaylan Hospitality has plans drawn up and already owns the property, Nelson said, and has for some time.
“The owner of that building … wanted to do it, but he had to make the numbers work. He couldn’t quite get there,” Nelson said.
The Pinnacle building will likely be demolished and reconstructed.
Nick Patel, CEO of Kaylan Hospitality, said in an interview that construction costs have risen exponentially in recent years. The total estimated cost for this project is now $55 million, he said.
Patel said he is in early conversations with the city as to how to bridge the gap and acquire the funding necessary to move forward with construction. The real estate tax abatement program will help, he said, but there is a large gap “between what it’s going to cost and [will make it] feasible financially.”
The city’s hotel tax abatement program, Nelson said, will provide comfort to developers in knowing they have a “dedicated source of revenue” to expect from real estate and occupancy taxes.
“I think once they do see that, they’re going to see what a valuable asset it is,” he said. He expects once the word is out about the program, it’ll speed up the development process for hotels.
Kaylan Hospitality already owns multiple properties in Roanoke, including the Hampton Inn and Suites at Valley View. Patel said the company is “very deeply” rooted in Roanoke and would like to continue expanding here. Specifically, he sees a need for hotels downtown.
NCAA events bring thousands of visitors to Salem. Where do they stay?
As Bratton said in his presentation to the city council, Roanoke’s tourism and hospitality industry extends beyond the city limits.
The city of Salem, which brings in a large crowd often through Roanoke College events and NCAA tournaments, set aside $50,000 in its current budget for a hotel feasibility study to be completed within the next fiscal year.
Carey Harveycutter, who has been the tourism director in Salem for over two decades, said because the city doesn’t have any full-service properties with meeting space, teams that visit Salem for games don’t usually stay in Salem.
The feasibility study seeks to find space for a hotel with 100 to 200 rooms with a meeting space, Harveycutter said. He said it’s becoming increasingly difficult to host NCAA events in Salem.
“Those weekends in the fall are critically important,” Harveycutter said. “Plus when [Virginia] Tech is at home … most of our hotels fill up just covering fan blocks.” Harveycutter said the city of Salem has about 1,100 hotel rooms available.
He said the impact from an NCAA event can run from $600,000 to $1 million. The 2025 Division II and III women’s lacrosse championships in May filled 1,900 hotel room nights.
It’s not just NCAA events drawing visitors to Salem. Harveycutter said the Salem Fair, held every summer at the civic center, draws over 200,000 people per year, 20% to 25% of whom come from over 50 miles away.
Roanoke College hosts a number of events, both athletic and educational, that greater hotel capacity would benefit, he said; 25% to 35% of visitors in Salem “put their feet somehow on the campus of Roanoke College.”
“It’s good for the whole valley, because people stay everywhere,” Harveycutter said. “But if you’re utilizing our facilities, we would hope that a good portion of them would stay in the city of Salem.”
Vinton will realize untapped tax revenue potential with its first major hotel
Spokespeople for Roanoke County and Botetourt County both said that their respective localities are not pursuing tax abatement programs or feasibility studies for hotel growth.
The town of Vinton, located in Roanoke County, does not currently have a major hotel in town, but has one planned to open in summer 2026.
“That was a revenue that we felt like we could capture that we weren’t currently receiving any,” said Town Manager Richard Peters. The town keeps 100% of the transient occupancy tax, he said.
With five wedding venues, an event facility and a close proximity to Smith Mountain Lake, the town was not fully benefiting from visitors without a large hotel, Peters said.
Vinton conducted a hotel feasibility study in 2015, which Peters said proved that the town could support its own large hotel.
Peters said there was a need for some kind of incentive, like Roanoke’s tax abatement program, to draw a hotel to Vinton rather than to a neighboring locality. Vinton acquired a property knowing they wanted to put a hotel there.
So Vinton sold the property, which the town had paid $500,000 for, to Kara Hospitality for $10 in exchange for the company building an Extended Stay America Premier Suites hotel. Peters said it will end up being a $13 million hotel.
Typically, banks require 30% equity up front for hotels, Peters said. The developer, local cardiologist Mitesh Amin, was able to acquire the necessary funds in this case.
Peters said he expects the 94-room hotel to bring in $150,000 to $170,000 per year in occupancy tax revenue for the town.
Peters said the developer said the site, at the intersection of Pollard Street and Virginia Avenue, was picked due to its walkability to downtown Vinton.
“You’ve got conveniences there that kind of check the boxes for both the visitor and the operator and that’s why we were told that we were selected for our site,” Peters said.
Another large conference space could bring more corporate business to the valley
Lucas, with Visit Virginia’s Blue Ridge, said the Blue Ridge Conference Center and Sheraton Hotel that closed in 2019 was not much smaller than Hotel Roanoke and Conference Center, the valley’s premier conference-hosting hotel.
“Thinking about the conferences and everything that takes place at the Hotel Roanoke every week, we could be having essentially double that happening if we have another one of those large, full-service meeting hotels,” Lucas said.
Hotel Roanoke, in downtown Roanoke, has two components: the hotel, which is owned by Virginia Tech, and the conference center, which is jointly owned by Virginia Tech and the city of Roanoke.
“I don’t think we can understate how important both of those things are,” Nelson said. “We derive a lot of revenue from the conference center, but we also get a lot out of the very meaningful partnership we have with Virginia Tech.”
Nelson said Hotel Roanoke hosts most of the city’s conferences now. If more hotels with conference space opened, Hotel Roanoke could “up their ante” and book larger conferences, he said, especially now with biomedical industry draws like the Virginia Tech Carilion School of Medicine.
Among other tourism services, VBR bids on events to come into the area. Eshelman said there are events that the region will miss out on if it doesn’t have the hotel room capacity necessary to host that event.
“More hotel inventory in our city and region is not just a convenience for any specific locality, it’s really kind of critical to us capturing economic value throughout the region, regardless of where the event takes place,” Eshelman said.
Harveycutter said the traveling public is generally “brand loyal” and will book a room a couple miles further from their event if it means staying at their trusted hotel chain. Wright said the region’s customers “don’t see county lines and city limits.”
Howard said in places like Asheville and Raleigh, North Carolina, competition among localities in a market is an issue, but in Roanoke, the valley is considered one market. Nelson echoed this idea — if there’s a large event in the region, people are going to stay in different localities.
“They’re going to eat in the restaurants all over the valley, go visit the different attractions, see different places,” Nelson said. “And we’re not a big enough place where we can be sectioned off like that.”
