May 28, 2020 by Drew Repp
While economic impacts such as skyrocketing unemployment claims and a nosediving stock market came on rapidly, there are many ripple effects of Covid-19 that will be felt over time. As we move further away from the epicenter of restrictions, some of those ripple effects are beginning to show. The Hospitality industry is being hit hard, and provides a staggering example of the interconnectedness of our economy across industries.
Bearing the brunt of job losses, the Hospitality industry saw a loss of 7.7 million jobs in April alone. That’s 38% of all job losses for the month.
The direct impact on jobs of hotels, restaurants, performance venues, bars and many other establishments closing or limiting service is obvious. Especially in Food Services, which lost nearly 5.5 million jobs.
What is less obvious is how many other sectors rely on a thriving hospitality industry. In its weekly Data Download segment, Meet the Press recently highlighted how the pain in the hospitality industry is felt in other sectors as well. Using Emsi’s Input-Output (I-O) Model, Chuck Todd showcased how those job losses in leisure and hospitality result in job losses in other sectors.
As a result of these multiplier effects, our model estimates that the 7.7 million job loss in the Hospitality industry causes a total loss of 10.1 million jobs. The various sectors of the economy are all weaved together. On a certain level, we all know this. But unfortunately it sometimes takes a major event and the closure or near-closure of an industry, to grasp just how interdependent the economy is. We took a deep dive into what the likely impact will be of a three month shutdown of the Hospitality industry. We also have more details on how to use an I-O Model to assess a major event.
Our data can help show how your region’s industries are connected. Get in touch and we can discuss data tools and resources.