Oregon’s Leisure and Hospitality Industry
by Guy Tauer Regional Economist Coos, Curry, Jackson, and Josephine counties firstname.lastname@example.org
Leisure and hospitality businesses employed an average 160,200 workers in 2020. Of those, roughly one out of eight were employed in accommodations, about the same as in arts, entertainment, and recreation. Just more than three-fourths of leisure and hospitality workers worked in food services and drinking places. These annual average figures mask how the COVID-19 pandemic has disproportionally impacted this sector of the economy. Since spring 2020, mandated closures or curtailments for entire business categories as well as changing consumer spending patterns in response to the pandemic resulted in massive and ongoing job loss.
From December 2019 to December 2020 the leisure and hospitality sector shed 38.7% of payroll employment, compared with a loss of 9.1% across all Oregon industries. Leisure and hospitality had 211,000 jobs in December of 2019 and by December 2020 employment fell to 129,400, essentially erasing the industry’s previous 25 years of job gains. Of the 178,200 payroll jobs Oregon lost during that time, 81,600 of those, or 46.9%, were in the leisure and hospitality sector.
Nationally, data from the new Census Bureau’s Business Pulse Survey show the leisure and hospitality component industries of arts, entertainment and recreation, and accommodation and food services reporting the highest share of businesses stating the COVID pandemic has had a large negative impact on their business. During the most recent week of the survey, between 60% and 65% of leisure and hospitality businesses reported that the COVID-19 pandemic had a large negative impact, compared with 30.7% for all industries. However, earlier in the pandemic, back in late April when the first Business Pulse Survey data was published, 75% to 80% of leisure and hospitality businesses reported the pandemic had a large negative impact on their business. More can be found at https://www.census.gov/data/experimental-data-products/small-business-pulse-survey.html.
The saw-toothed look on the graph shows the seasonal nature of work in this tourism-related industry, as well as the precipitous declines seen in the past year.
During the Great Recession, employment in this industry fell by 6.1% from 2008 to 2010. Oregon’s all-industry employment decline was slightly steeper, with payroll jobs declining by 7.4% from pre-recession peak to trough. By 2018, leisure and hospitality employment rose by 30.1% compared with a gain of 19.3% for total industry employment. As of February 2020, the month before the pandemic hit our economy in earnest, leisure and hospitality was still showing modest over-the-year job growth, rising by 1.8% (+3,700 jobs).
Over the most recent 12 months ending in December 2020, the arts, entertainment, and recreation industry lost 17,500 jobs or a loss of 63.6%. Accommodations shed 8,900 jobs, a decline of 35.2%. Food services and drinking places employment fell by a staggering 55,000 jobs statewide, a decline of 34.9%. Within the food services component, the pain was uneven. Full-service restaurant employment fell by 35,600, or a decline of 50.5%. Limited service restaurants lost 9,100 jobs, or a loss of 12.8%.
One blessing in disguise occurred during the pandemic when the Almeda, Obenchain, and Slater fires hit Southern Oregon. Many of those who were evacuated or lost homes were able to find temporary or long-term shelter in the area’s hotels and other lodging places. Had it been a normal summer near the peak of tourist season, it is likely that many of those hotels would have been filled with usual summer travelers.
Connection to Tourism
We often think of leisure and hospitality as a tourism industry. While many jobs in this industry are reliant upon tourism, local spending also plays a significant role. The Oregon Tourism Commission contracts Dean Runyan Associates to produce travel spending impact analysis for Oregon. According to their Oregon Travel Impacts 1991- 2019 report’s preliminary estimates, travel spending generated 74,800 direct jobs in the accommodation and food services sector and 20,400 direct jobs in the arts, entertainment, and recreation sector in 2019. Combined, these jobs made up about 81% of total direct travel-generated employment that year. Retail and wholesale trade, professional and business services, and transportation were other industries that had direct travel-generated employment in Oregon. While tourism is undoubtedly critical to the growth and success of many leisure and hospitality jobs, there are likely even more that depend upon local business and customers. Dean Runyan Associates’ most recent visitor volume and travel impact report can be found at: https://www.travelstats.com/reports
Leisure and Hospitality’s Sales and Share of Oregon’s Gross Domestic Product
According to the 2017 Economic Census, sales in Oregon’s accommodation and food services industry totaled $11.8 billion among 9,261 firms. Five years earlier, total sales in Oregon were just under $8.5 billion. The arts, entertainment, and recreation industry had $1.7 billion in sales among 1,362 Oregon firms in 2017.
Oregon’s leisure and hospitality gross domestic product (GDP), the estimated value of all goods and services produced in the economy, approximately doubled between 2009 and 2019, when it reached $11.2 billion. The Great Recession drove industry GDP down 10% between 2007 and 2009. The industry fully recovered by 2012, with GDP totals above the pre-recession level and continuing to grow each year until 2019. With the growth in recent years, the relative share that leisure and hospitality contributes to Oregon’s overall economy has slowly risen from about 3.0% of total GDP in 1997 to 4.4% during the most recent three years. There’s no doubt that industry GDP changed in 2020 with the onset of the pandemic recession, but we don’t know yet how steep a drop the industry faced on an annual basis.
Most Oregon Leisure and Hospitality Establishments Are Small
In Oregon, there were just 128 leisure and hospitality establishments that had 100 or more workers at the beginning of 2020. Size of establishment data are published for only the first quarter of each year, typically the slowest season for leisure and hospitality, so that may skew these values. An establishment may have no paid employees during the slowest winter months, and then bring on seasonal workers during the busier summer months. The greatest number of establishments had between 10 and 19 workers and slightly fewer employed between one and four workers. Of Oregon’s 204,612 leisure and hospitality jobs in March 2020, 125,778 were in establishments with 10 to 49 workers.
Coast Most Dependent on Leisure and Hospitality
Clatsop, Lincoln, and Curry counties are the most leisure and hospitality dependent in Oregon, with more than twice the share of employment as in Oregon statewide. Other counties including Coos, Deschutes, Tillamook, Harney, and Hood River counties also have a strong concentration of leisure and hospitality jobs. With just 289 jobs (June 2020) in the leisure and hospitality industry in Harney County, a relatively high share of leisure and hospitality jobs reflect the smaller overall economic base in this less-populous Oregon county.
The map displays the location quotients for the leisure and hospitality industry within Oregon. Location quotients are a measure of industry employment concentration. If a county has a location quotient of 1.0 that means its relative percentage of leisure and hospitality jobs compared with the all-industry total is the same share of employment in that industry as the statewide total. Oregon as a whole has a very similar concentration of leisure and hospitality jobs to the United States. Tourism hot spot counties such as Hood River and Deschutes have strong leisure and hospitality location quotients.
Over 125,000 jobs can be found across Oregon’s more than 14,000 leisure and hospitality establishments. As the economy eventually recovers from the pandemic, we can hope that those lost jobs in this industry recover as well. Many Oregonians, including myself, started their careers working in restaurants. Those skills, such as getting along with coworkers, showing up ready and able to put in a full shift, providing quality customer service and countless more, are essential and transfer to many other industries and jobs. Recovery from the pandemic will bring many opportunities to apply those skills, in Oregon’s leisure and hospitality businesses and beyond.