RALEIGH – Throughout Wake County, more than 28,000 hospitality and tourism jobs previously supported entirely by visitation and related visitor spending were put into permanent jeopardy by the impacts from COVID-19 spread.
That’s according to a report presented to the Wake County Board of Commissioners by Dennis Edwards, president and CEO of the Greater Raleigh Convention & Visitors Burea.
“2020 unemployment figures in the area have been staggering — at great costs to the livelihoods of area workers and their families who depend on the local tourism economy and its daily arrivals,” the report from the Greater Raleigh Convention & Visitors Bureau says.
Yet, despite these positive trends, Edwards addressed potential challenges for the industries during a Q&A period with Commissioners, noting that at one point in 2020, 66 percent of people in the hospitality and leisure industry were either furloughed or laid off. “What companies are finding is that many of the people they were hoping to rehire have found other jobs,” he added.
“Employment issues are going to become a challenge, not just here, but nationally, in trying to find enough employees in the tourism and hospitality sector,” predicted Edwards. “We’re going to have to find new, quicker ways to match people looking for employment with our hospitality and tourism industry because that demand is now coming back and they’re having a hard time finding the right employees to fill those positions.”
The dark months
According to the report, during the first six months of 2020 Wake County area hotel occupancy tax collections dropped 48.5 percent, and area prepared food and beverage tax collections had dropped by 25.7 percent.
Area hotel supply and demand figures were starting to rebound from their historic lows by late summer. But historical, national insights from past economic recessions or crises suggest that cuts made to Average Daily Rates (ADR) during the COVID-19 pandemic will require years of time to reverse, as the traveling public can only be coerced gradually to pay higher and higher room rates, the report notes.
“This means that the impacts of COVID-19 will overshadow the local and national hotel industry for years to come, with overall revenue growth and thus hotel tax revenue growth also rebuilding gradually,” the report said. “One estimate for the return to pre-COVID levels of hotel revenue was late 2023.” Restaurant industry forecasts are less clear, it added.
Brighter days ahead?
But not everything is grim.
“We are becoming more optimistic, particularly because vaccines are hitting the marketplace and trends are looking more positive,” Edwards noted. In fact, said Edwards, there are early measures that consumer confidence, particularly when it comes to tourism, is increasing.
A February study referenced by Edwards on the call found that 81 percent of Americans reported planning to take a trip this year, which Edwards said was an increase of 16 percent in responses from the same survey conducted one month earlier.
And, Raleigh and Wake County have begun to host in-person events, that bring more people to town from out of the area. The first event in a year that was held in the Raleigh Convention Center this past weekend, said Edwards, which brought 2,500 people into town for a volleyball tournament, and concurrently, 800 people for a swimming event that same weekend.
Hotel occupancy reached 82 percent for that weekend, reported Edwards, which compares quite favorably to the baseline from prior weekends of 48 percent during the COVID-19 closures, based on the data Edwards shared with the Commissioners.
Edwards highlighted additional events that will be occurring in the coming months, including the Major League Bass Pro Fishing Tournament in April, and the men’s and women’s NCAA College Cup held in the Town of Cary, as well as 15 competitions scheduled by USA Baseball, including the first-ever draft combine held by Major League Baseball.