The Summer Without Vacations and the Hospitality and Leisure Industry

Between June 2009, the end of the Great Recession, and February 2020, the start of the COVID Recession, total nonfarm employment grew by over 16%. In the private sector, employment grew almost 20%.  The figure below depicts employment by industry indexed to the respective industries’ employment in June 2009. Employment in Transportation and Warehousing posted the largest percentage gain by to February of this year at 35%, Professional and Businesses Services employment grew 31% and employment in Leisure and Hospitality grew 29%.  The noticeable spike in federal government employment in May of 2010 is associated with the 2010 Census. The rollercoaster of employment growth and declines in the Mining and Logging industry tracks the fluctuations in oil prices.

The abrupt, substantial drop in employment in each industry since February of 2020 is seen at the tail end of each series. April 2020 saw the largest declines.  April employment in Leisure and Hospitality fell to 65% of its June 2009 value and was only 51% of its February 2020 value. In April, employment in Other Services was 77% of its value in February and employment in Retail Trade was 85% of its February level. Total nonfarm employment in April was 99.5% of its value in June of 2009 and in July, it was 106.5% of the June 2009 value. However, nationwide nonfarm employment in July was 91.6% of February’s level, down 12.9 million workers.  

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Metro areas that rely heavily on tourism have seen some of the largest employment declines given the importance of their Leisure and Hospitality industry.  In June, employment levels in Las Vegas and Orlando were 86% and 85% of their respective February levels. Nationally, June’s employment was 90.4% of February’s level.
 
The next figure quantifies the increases (with the exception of utilities) in industry employment counts between June 2009 and February 2020 and the employment losses (with the exception of the federal government) from February 2020 to July 2020.  Between the end of the Great Recession and February 2020, Professional and Business Services added 5.1 million jobs, Education and Health Services added another 5 million jobs, and Leisure and Hospitality added 3.8 million jobs, accounting for 23.6%, 23.2% and 17.7% of the employment increase, respectively. Since February, all of the job gains in Leisure and Hospitality since the end of the Great Recession have been erased. In July, Leisure and Hospitality employment was down 4.3 million from its February level, and down over 500 thousand workers compared to the end of the last recession. Other industries with large numeric losses include Professional and Business Services and Education and Health Services with declines of 1.6 million each since February.

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The Leisure and Hospitality industry and its employees are suffering through a hard spring and summer.  Looking forward, concerns about all types of travel, the associated accommodations, and dine-in restaurants will continue to hamper the prospects for this industry. 
 

Posted: August 11, 2020 by Andrew J. Rettenmaier