Report: NM leisure, hospitality jobs still lag
Pandemic-hit industry awaits travel recovery
Even as local governments continue to ease restrictions on restaurants, bars and other entertainment venues, leisure and hospitality job losses remain far starker than in other sectors.
And it may take some time before those jobs return in New Mexico and across the Mountain West, according to a new report published by the Federal Reserve Bank of Kansas City.
“This was absolutely unprecedented as far as an economic shock,” said Nick Sly, Denver branch executive at the Federal Reserve Bank of Kansas City and one of the authors of the report, about the effects of the COVID-19 pandemic.
The report, titled “Recovery in Rocky Mountain Leisure and Hospitality Employment,” notes that more than 98,000 jobs at leisure and hospitality businesses across New Mexico, Colorado and Wyoming haven’t returned since the start of the COVID-19 pandemic, even as the overall economic picture has improved.
Sly said consumer demand is likely to be strong as business restrictions ease, but declines in business travel, fewer people attending conventions and fewer employees working out of offices could constrain the growth of the sector going forward, particularly in city centers.
Leisure and hospitality has been the hardest-hit economic sector since the pandemic began, and New Mexico’s sector has lagged behind its peers. In New Mexico, 60% fewer small hospitality businesses were open this January compared to a year earlier, compared to a 50% drop in Colorado and a 40% drop in Wyoming, according to the report.
Sly said New Mexico’s comparatively stringent business restrictions, combined with the virus’ impact on consumer confidence, contributed to the particularly steep loss of jobs in the state.
The report notes that restaurants and hotels in urban centers face a particularly uncertain future. Sly said suburbs and communities that rely heavily on leisure travel, including Taos and Santa Fe, may fare better than downtowns, which tend to rely more heavily on business travel and offices.
“I think there is a risk for some downtown ... areas that we want to monitor,” he said.
One risk that goes along with a stagnant leisure and hospitality sector is that workers who can’t find jobs in the industry often gravitate to the retail and health care fields, which also face an uncertain future coming out of the pandemic.
“Those other opportunities that we tend to see workers take advantage of just aren’t as vibrant as they have been in other recoveries,” Sly said.
Despite the challenges, Sly said the industry is adding jobs quickly as consumer confidence grows. Employment in leisure and hospitality increased by 280,000 jobs nationwide in March, the largest increase in any sector, according to U.S. Bureau of Labor Statistics data released Friday.
Sly said the sector will likely be the last to recover from the effects of the pandemic, but the timeline will depend on how much pent-up demand there is for restaurants, movie theaters and other entertainment venues.
“It does really remain a key sector to return our regional economy back to its full vibrancy,” he said.