Coronavirus Breaks Tourism Economy


The coronavirus has already changed consumers’ willingness to travel, and the fallout will wreak havoc on hotel workers and places dependent on tourism.

Why is it important: States like Hawaii and Nevada that depend on tourist dollars are seeing their economies upset by widespread unemployment and no relief in sight.

The big picture: A robust era for American tourism ended earlier in a few weeks. No one knows how long the upheaval will last, but economists expect tourism to be different once the country is completely out of isolation.

  • “I really only book for very advanced bookings,” for the end of this year and next year, Bruce Fisher, who has owned Hawaii Aloha Travel for 20 years, told Axios.
  • The unemployment rate in Hawaii has been below the national average in recent years. But Peter Fuleky, a professor at the University of Hawaii’s Economic Research Organization, predicts that the job situation will suffer in the state long after the rest of the US economy recovers.
  • Already one third of the workforce has applied for unemployment assistance since the closure, among the worst in the country.

Long-term, large numbers of workers may find their jobs less in demand. And states that are heavily dependent on tourists may try to turn to other industries to fill critical income gaps.

  • “Tourism will suffer everywhere, wherever you are,” says Fuleky.
  • “It is not clear that since you lost your tourism job in Hawaii, you will suddenly find a job in Florida, Vegas or some other destination. “
  • A tourist attraction – Orange County, Florida, home to Disney World – may not return to pre-pandemic levels until 2023, according to a WSJ forecast.

In numbers: Tourism represents 2.8% of the US economy. Its presence is concentrated in certain states and counties which depend heavily on it.

  • Nevada, where the Vegas Strip is still closed, has seen 30% of its workforce flock to unemployment.
  • The Brookings Institution estimated that the coronavirus recession would hit places like Las Vegas, Atlantic City and Maui the hardest.

Even for consumers Business and government plans to purge demand on purpose – by capping crowds – for security reasons.

  • MGM Resorts said it plans to reopen with only 25% of its rooms available for booking; Caesars Palace will deactivate all other slot machines and allow half the number of players at its blackjack tables.
  • Fisher of Hawaii’s Aloha Travel also operates a local tour bus company, which he says will cease operations once its support for a check payment protection loan expires. “Are people really going to want to get on a tourist bus with strangers? Asked Fisher.

Between the lines: Since September 11, some tourism-dependent sites have attempted to diversify their sources of income, so far with seemingly little success.

  • In Hawaii, one of the most expensive places in the country to live, Honolulu city councilor Kymberly Pine told USA Today that she and other lawmakers have warned the state that it is too dependent on tourism .
  • “We are going to have to prepare ourselves for a lot of people losing their homes, unable to pay for their rentals,” Pyne told the newspaper.
  • In Orlando, Florida, a campaign launched in 2014 with the slogan “You don’t know half of it” aimed to portray the city as more than just a tourist destination.
  • Sean Snaith, a professor at the Institute for Economic Forecasting at the University of Central Florida, told Axios he believed the pandemic would force officials “to double and triple their efforts in this regard.”

What awaits us: Places that depend on tourists may experience a slower recovery than those that do not.

  • Travel and hospitality “could lead to a longer and more painful contraction,” said Patrick Harker, president of the Philadelphia Federal Reserve this week.
  • “The impact on airlines, hotels and restaurants catering to travelers could be severe and lasting. “
  • A possible silver lining: social isolation could lead to better experiences for visitors to local attractions because there will be “more room just for you,” says Fuleky.


Please enter your comment!
Please enter your name here