Projections hint at long recovery for US tourism hot spots

A global pandemic that fell disproportionately on low-income Americans is likely to lead to a recovery that will leave communities heavy on those same workers struggling to keep up.

A new analysis of projected job growth over the next decade shows growth slowing over the next decade among workers in the accommodation and food businesses, and especially so in states that rely heavily on tourism to fund their budgets.

The report, an analysis of Bureau of Labor Statistics data by the Metropolitan Policy Program at the Brookings Institution, forecasts slowing growth in every state in the country over the next decade because of the pandemic. 

But some states fare than others: Job growth is expected to slow by about 1.5 percent in states like Massachusetts, New York and Connecticut, and by only 1.1 percent in the District of Columbia. Those areas have higher percentages of their workforce in technology, government and financial sectors, industries that have held steady or thrived in the last year.

Job growth is expected to slow the most in states like Nevada, Hawaii, Florida, Wyoming and Montana — the states where tourism dollars spent at hotels, restaurants and bars make up more significant shares of gross domestic product.

“This is Vacationland America,” said Mark Muro, director of the Metropolitan Policy Program. “These places are highly specialized in tourism and therefore vacations and food, and those are areas where the BLS is projecting some hesitancy.”

The BLS projects slowing growth across most industries, and especially in accommodation, food service, arts and recreation and retail trade. Information and professional, scientific and technical industries are the exceptions likely to see faster growth in the next decade.

About 16 percent of Nevada’s gross domestic product comes from tourism, and a quarter of its workers are employed in the leisure and hospitality industry, according to figures from S&P Global. About one in five workers in Hawaii are in the hospitality business, which generates 10 percent of the state GDP. Both states rely more heavily on those industries than any other.

The metropolitan areas likely to experience the least disruption are all centered around college towns and manufacturing hubs. Among those areas are Princeton, N.J., Silicon Valley, Elkhart, Ind., Ann Arbor, Mich., and the Research Triangle in North Carolina. 

Among those likely to see the steepest drop-offs in growth are the places where Americans go to relax: Atlantic City and Ocean City in New Jersey, Las Vegas, Myrtle Beach and Flagstaff, Ariz.

“It’s pretty clear, tech-y science-y places get a little bump, but on balance the food, drink, accommodations hit is significant across the southern half of the country,” Muro said.

The slow recovery is likely to exacerbate the gap between coastal mega-metro cities that thrived in the aftermath of the financial crisis a decade ago. Even in the face of so much positive news about a sped -up vaccination process and the prospects of record-level growth, the BLS data represents a downshift of earlier projections.

Even if life returns to normal, the BLS projections suggest that Americans’ psyche may remain damaged in the long term.

“The profound damage that places have gone through, not just in the labor market but psychically, could have after-effects on the return to normal behavior, and especially food, drink and vacation,” Muro said. “Overspecialization in leisure and hospitality turns out to be a dangerous focus for some places.”


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