This week’s article is from Paul Turek, the Washington Employment Security Department’s statewide economist.  

For direct access to employment and emoployee candidates visit www.worksourcewa.com 

An economist’s assessment of the hospitality industry 

As you know, leisure and hospitality (L&H) is an industry based on guest experience: service, people, atmosphere and products. Do them right and customers return. Do it wrong and you won’t be in business long.  

Our measuring tools 

Economists measure L&H’s demand for workers primarily by determining how busy you are,—also known as derived demand. Based on this, economists can track employment numbers and get a sense of how busy an industry is.  

Using the U.S. Bureau of Labor Statistics system to separate industries, we group businesses (like L&H) that produce similar products and have similar customers. Then we analyze employment and workforce data to measure the overall health of a derived demand industry.  

L&H is classified as a major industry and has two parts: 

  • Arts, entertainment, and recreation, and 
  • Accommodation and food services.   

L&H’s product is a service we measure by consumer satisfaction. The effort to get more customers depends upon tastes and preferences, but also on customers’ ability and willingness to make time for leisure activities and to spend money.  Consumer demand ultimately drives people to purchases in your industry.  

National L&H scene 

The national economy has continued to expand in 2017 and consumer incomes have risen as the job market boosts wages and salaries. Surveys say that consumer confidence continues to rise, prompting consumers to spend more — much to the benefit the leisure and hospitality industry.  

Additional evidence shows in statistics collected for the U.S. hotel industry and from visitor associations. Hotel occupancy rates reached record levels in 2015 and stayed close to those levels in 2016. Currently to date, the rate is ahead of last year and just behind the record year in 2015. 

Tourist-centric Las Vegas and Orlando are experiencing high numbers of visitors. In fact, visitor traffic in Las Vegas lags only slightly behind the 2016 record and 10 percent above the pre-recession peak. Convention attendance is the same: In Orlando, tourism grew widely during the first half of 2017 compared to the same time last year. Convention center attendance, total passenger traffic, and hotel occupancy all reported an uptick. 

Washington’s leisure and hospitality numbers 

In 2016, Washington’s L&H industry employed an average of over 323,000 workers. When we break down these numbers, we see:  

  • Roughly 10 percent of those were employed in accommodations. 
  • Slightly more are categorized in a group called arts, entertainment, and recreation. 
  • More than three-fourths of those workers were in food services and drinking places.  

To see how L&H is doing now, we look back at the most recent recession. Employment in L&H industry fell by 7.4 percent from its 2008 peak to a low in 2010. Since that time, L&H employment rose by 21.4 percent through 2016 versus a gain of 14.3 percent for all employment in Washington. This shows just how much leisure spending has rebounded. 

In the last year through August 2017, L&H employment rose by 2.3 percent (+7,800 jobs). 

A look to the future: WorkSourceWA.com can help 

The 2018 outlook for the economy calls for continued growth. L&H is likely to continue to expand and compete for customers who have more disposable dollars, which means the demand for workers increases. With fewer potential workers available, the likelihood of higher wages also increases. Seems both employers and employees will win in the long run.  

WorkSourceWA.com can help the L&H industry attract new workers. Last May, ESD and WorkSource worked with the Hospitality Association to build an “Industry Spotlight,” featuring career ladders, training and job opportunities to encourage workers to consider a career in hospitality. You can check out that spotlight at www.WAHospitalityCareers.com 

You can also visit ESD’s Labor Market Information page on Employment Security’s website to see more about specific trends in the L&H industry.