The collapse of tourist activity during Covid has benefited employment in rural hospitality

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While the COVID-19 pandemic has dealt a massive economic blow to the US tourism sector, some rural communities have benefited from the crisis in terms of employment gains, according to a team of researchers from Penn State and West Virginia University . Their study, which is the first to document the economic impact of COVID-19 on tourism in the United States at the county level, can help guide the development of rural tourism and destination management strategies that improve the resilience of communities. communities.

“As regional economists, we are interested in how communities are affected by and recover from economic shocks, such as a natural disaster or a recession. The COVID-19 pandemic has been a whole new type of shock that is unique in many ways, including its impact on the leisure and hospitality industry in different places,” said Luyi Han, lead author of the study and postdoctoral researcher at the Northeast Regional Center. for Rural Development (NERCRD), based at Penn State’s College of Agricultural Sciences. “For example, while Americans avoided air travel and crowded destinations, they flocked to places with outdoor amenities and low population density or places far from population centers. We wanted to better understand this variation in space, in terms of economic impacts.

The researchers focused on two key economic measures – employment and wages in the leisure and hospitality sector – and how these measures have changed from county to county in response to the pandemic. . They found that while recreation and hospitality employment fell by an average of 12% across all counties, it rose in 332 counties. They also found that where job losses were greatest, wages were more likely to rise, indicating that leisure and hospitality workers who managed to keep their jobs in hard-hit places affected received wage increases.

To conduct their study, which was published online June 16 in the journal Tourism Economics, the researchers used the Quarterly Census of Employment and Wages, which provides county-level data by industry and allowed them to focus specifically on the leisure and hospitality sector. They compared employment and wage data from the third quarter of 2019 to the third quarter of 2020 to capture the peak months of July and August, Han said.

“We found that the pandemic had very different economic effects on tourism in the United States, with some places experiencing tourism-related job losses of up to 71%, and other places experiencing an increase of more than double. these types of jobs,” says Han. “Generally, the places that saw the greatest employment gains started out with very low tourism employment, but our study found a lot of variation from place to place.”

To better understand this variation, the researchers conducted a statistical analysis to examine whether any location-related factors may have played a role. They considered each county’s status on a continuum from urban to rural, distance from metropolitan areas, population density, average household income, the extent to which the local economy is diversified, and the stock of “social capital” of the community, a measure of networks. and links that promote cohesion among residents.

“Our key finding is that the tourism economy in rural counties has weathered the shocks of the pandemic better than their urban counterparts. Not so surprising, given the risks posed by COVID and the need for social distancing measures, which tourists might perceive as easier to accommodate through outdoor recreation and visiting rural communities in low population density,” said Jason Entsminger, assistant research professor of agricultural economics. , sociology and education at Penn State and associate director of NERCRD. “What was really surprising was the job growth in some of the more rural and less populated counties. Rising employment and wages in these communities show growing tourism demand for rural spaces – suggesting that people were not just looking to avoid the crowds, but were looking for remote and isolated places they thought they could explore safely.

Entsminger noted that this increase in demand presents both challenges and opportunities for the well-being of the rural community, and that for some rural areas, their new status as a tourist destination and the associated employment gains do not weren’t necessarily for the best.

“We know from previous research that tourism can be an effective strategy for rural communities to diversify and build their resilience to economic shocks. However, some communities may not be ready for the sudden influx of visitors and may struggle with the effects over time. For example, there are early indications that this influx is impacting the housing market, quality of life and environmental quality in some areas,” Entsminger said. “Our results show that the COVID-19 pandemic offers communities an opportunity to consider their resilience as a tourist destination. Can they withstand a sudden influx of tourists, as well as a sudden slowdown? Policies that take into account both perspectives are clearly needed in many rural areas.

Besides Han and Entsminger, other members of the research team include Stephan Goetz, professor of agricultural and regional economics at Penn State and director of NERCRD; Daniel Eades, Rural Economics Extension Specialist at West Virginia University (WVU); and Doug Arbogast, Extension Specialist in Rural Tourism Development at WVU. The research was supported in part by funding from the USDA’s National Institute of Food and Agriculture and Penn State University’s College of Agricultural Sciences.

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