D.C.'s Hospitality and Tourism Industry and COVID: Where Do Large Businesses Stand?
Hospitality and tourism is a primary sector in the D.C. job economy, supporting approximately 80,000 jobs. Primary sub-sectors areas of employment include accommodations, food services, restaurants, arts, and entertainment.
The industry has seen strong growth for the past decade in the District, but in March 2020, everything was brought to a screeching halt once non-essential services were shut down. Limited hospitality services were permitted to continue, but as consumer and B2B demand diminished, thousands of jobs were impacted.
Let us take a look at how large businesses in the hospitality and tourism sector performed before, during, and what it is likely to look like once the COVID-19 pandemic is behind us.
Booming before COVID-19
D.C. welcomes almost 25 million visitors annually and, on average, hosts about 1,000 annual conventions, meetings, and tradeshows. Previously, plenty of jobs could be found with many positions not requiring college degrees.
Large hospitality companies employed roughly 35,000 people in 2017. This comes as no surprise since D.C. hotels provide 30,000 rooms, and neighboring Maryland and Virginia hotels boost DMV room numbers to a whopping 180,000. Additionally, several large hospitality companies maintain headquarters in D.C.
Prior to the pandemic's arrival, the industry was booming, having enjoyed 10 straight years of record tourism, along with hospitality related B2B growth.
During the pandemic
Once COVID-19 shut everything down, depending on which statistics you read, hotel occupancy in the city fell to record lows at a point between 8 and 18 percent. Downtown hotels experienced a 94 percent drop in revenue. With essentially no one visiting the city for most of 2020, visitor numbers across all sub-sectors were nothing remotely close to what they had been in 2019.
This drop dramatically impacted tens of thousands of employees with widespread furloughs and layoffs. Remote work was not an option for most, as the majority of hospitality and tourism jobs must be performed in-person. Restaurants, deemed an essential service, could remain open, but without the ability to fill their dining rooms, most could not sustain full operations.
Social distancing and capacity restrictions prevented D.C.’s large businesses from maintaining their normally robust level of jobs. Top hotel chains sent thousands of workers home and other large hospitality businesses laid off their workers:
- Washington Hilton – 533 employees
- Omni Shoreham Hotel – 599 employees
- Aramark, which services Capital One Arena, Washington Convention Center, and the Georgetown Hotel and Conference Center – 900 employees
- Four Seasons – 413 employees
To cope with this major disruption, industry giants leveraged technology to market contactless experiences (relying on mobile apps) and offer limited hospitality services.
In the end, the cancelations of dozens of conventions, conferences, and other events cost the city more than $420 million last year.
Looking to the future
Experts largely expect big businesses in this sector will need time to recover or even reach the break-even point. While the industry will receive a boost as the city reopens, tourism demand is not expected to immediately flourish. It also remains to be seen whether companies, which have largely become accustomed to Zoom-style gatherings, will revert back to business-related travel or choose to continue remote meetings and events for the foreseeable future.
Looking forward, there are bright spots on the horizon. Reopening is slowly happening. Larger gatherings are now allowed under D.C.’s Phase Two protocols in effect on May 1. This enables museums, entertainment, conference, and wedding venues to bring back employees. The Smithsonian announced seven museums will reopen in May, the Kennedy Center announced its 2021-22 season, and other attractions are operating with safety precautions. Maryland and Virginia have no travel restrictions, providing opportunity to bring back regional jobs.
Beyond the horizon, large hotels and chain restaurants will likely turn to technology to help keep operations flowing, even in times of disruption. Since hospitality giants have historically turned to D.C.'s tech-savvy workforce to support innovative ventures, this has potential to offer job opportunities in loosely-related hospitality roles.
After more than a year in quarantine, pent-up travel demand may come to fruition—at least to some level. How and when that happens directly impacts how many jobs big businesses are willing to fill.
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