Amazon's Influence on Northern Virginia's Lodging Market
By Chelsey Leffet Director, HVS | April 14, 2019
This article was co-authored by Chris Fernandes, Director, HVS Consulting and Valuation
In 2018, Amazon revealed two locations for HQ2-Long Island City, New York, and Crystal City, Virginia. Among the anticipated benefits of HQ2 is an influx of new hotel demand. This article examines the potential impact on northern Virginia's lodging market.
Following a nearly year-and-a-half Request for Proposal (RFP) process, Amazon announced that it would split the location of its new HQ2 campus between two cities in the Northeast-Long Island City, New York, and Crystal City, Virginia. The selection by Amazon is widely viewed as a "win" for these two cities, which expect to benefit from the addition of this major employer. Among the many anticipated benefits of the new HQ2 is the potential for a significant influx of lodging demand, comprising both transient and group travelers. The intent of this article is to provide an understanding of the potential effect on the lodging industry in northern Virginia.
Amazon's Crystal City HQ2 complex will encompass a neighborhood now referred to as National Landing, which includes Crystal City and parts of Pentagon City and Potomac Yards. Amazon reports that the initial footprint will comprise four million square feet of office space, with the opportunity to expand to eight million square feet of space. Smith, a publicly traded REIT based out of Chevy Chase, Maryland, owns most of the buildings within the immediate area and is expected to act as Amazon's development partner, property manager, and leasing agent going forward.
The following illustration depicts the planned location for Amazon's new HQ2 complex in Virginia.
With Amazon promising the creation of 50,000 jobs associated with HQ2, the company vowed in its dual-city selection that the economic impact would be divided equally among the two locations, suggesting that 25,000 jobs will be created in National Landing over the next decade.