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The U.S. hotel sector’s unemployment rate is once again on the rise, as experts point to a slower-than-expected vaccine rollout hindering the industry’s recovery.
American hotels lost a combined 18,000 jobs in January, moving the industry unemployment rate up to 23.1 percent, the U.S. Bureau of Labor Statistics reported Friday.
The hotel industry continues to remain out of step with the national unemployment rate average — the U.S. unemployment rate fell to 6.3 percent last month — but still significantly lower than the 48.9 percent seen last April, the first full month of the pandemic.
January also marks the first time the hotel unemployment rate increased since a steady decline from the April high.
“At the end of the day, it’s no big secret hotels did start to reopen in anticipation of the vaccine rollout, and the rollout hasn’t worked out as planned,” said LW Hospitality Advisors CEO Daniel Lesser. “This proves it’s going to be a longer recovery than many had hoped for than when the vaccine was announced.”
Hotel unemployment recovered from its April high to 18.9 percent in December, a trend partially fueled by hotels that had temporarily suspended operations reopening from springtime closures and bringing workers back. But the virus spiked again with a winter surge, and vaccine distribution missed early federal government projections of getting 20 million people vaccinated by the end of 2020.
Overall hospitality jobs, including those in restaurants and bars, are down 22.9 percent, or 3.9 million jobs, since February of last year. Hotel performance is still well off pre-pandemic levels: U.S. hotel occupancy rates last week were just over 40 percent — nearly 30 percent lower than the same time last year, according to STR.
The so-called jobs recovery in the hotel industry until last month was also not actually entirely driven by hoteliers bringing back employees. The hotel industry still lost 24,000 jobs in December despite a better unemployment figure, a sign workers gave up their search for a hotel job and no longer counted in the industry’s labor pool. That trend continued into 2021.
“Covid-19 has wiped out 10 years of job growth in the hotel industry. Today’s jobs report further underscores the crisis our industry faces,” said American Hotel & Lodging Association CEO Chip Rogers. “The leisure and hospitality sector is down nearly 4 million jobs since this time last year. That’s why we are eager to work with the new administration and Congress on policies that will bring back travel, and with it jobs and economic development.”
The industry remains optimistic over a $1.9 trillion stimulus bill in the works from the Biden administration, which includes ramping up vaccine distribution. The upcoming spring and summer months are also likely to revive travel demand, as outdoor activities are once again possible in even northern parts of the U.S. There is even some optimism around the convention business reviving in the latter half of 2021 — assuming enough people are able to take the vaccine.
“It’s all a game of confidence,” Lesser said. “Once confidence comes back into play, it’s a foregone conclusion. I think travel is going to come back with a vengeance across all sectors. Timing is the big question.”