‘Back to work in the flames’: The hospitality sector in a pandemic
A conversation with José Andres and Arne Sorenson
For many American businesses, the COVID-19 pandemic has morphed from a temporary break from “normal” into a protracted struggle for economic survival. And no industry is more impacted than leisure and hospitality—the event venues, hotels, restaurants, and travel activities that rely on group social environments and in-person interaction.
“Essentially, the industry blew up,” said an Atlanta-based chef. “And then, as we are putting it back together, people were asked to go back to work in the flames, for the sake of the economy.” Indeed, indoor service at restaurants and bars has become a leading source of community outbreaks, so it is critical that we get smarter about how we address this sector.
This post pulls together Brookings content and other research that can inform efforts to counteract the disproportionate impacts of the pandemic on the leisure and hospitality sector, including its workers, business owners, and surrounding communities.
THE INDUSTRY’S MOST VULNERABLE PEOPLE AND PLACESThe leisure and hospitality sector includes not just global hotel chains, but local arts venues, recreation, restaurants, and bars. In 2017, small businesses (firms with fewer than 500 employees) comprised 99.5% of the sector, and 60.6% of employment within the sector. We estimate that women- and minority-owned businesses (WMBEs) comprise 63.5% of accommodation and food services businesses and 46.5% of arts and entertainment businesses.
Many of these firms have been forced to lay off most or all of their workers, and sometimes completely shut down. In May, 52.1% of small businesses in the leisure and hospitality sector reported temporarily closing, and 35.2% reported a decrease in the number of paid employees. As with business owners, Black, Latino or Hispanic, and female workers are overrepresented in hospitality occupations, as are youth and workers with less education. Thus, the impact of these closings and layoffs has deepened inequality across multiple dimensions.
American communities that are travel and tourism destinations—both urban and rural—have been hit especially hard as tourism has ground to a halt. Cities and states that are highly dependent on tourism and events for revenue will also disproportionately struggle in the absence of adequate federal fiscal aid, because those communities do not have enough alternative sources of economic growth to help keep business revenue streams and household incomes stable.
Seventy percent of U.S. metropolitan regions have at least 10% of their workforce in leisure and hospitality. Beach communities are highly vulnerable, with more than a quarter of workers in leisure and hospitality in Atlantic City and Ocean City in New Jersey, the island of Maui in Hawaii, and Myrtle Beach, S.C. However, the largest workforce with this level of exposure is in Las Vegas.