D.C.'s Hospitality and Tourism Industry and COVID: Where Do Medium-Sized Businesses Stand?

A popular location for conferences and conventions, D.C. is huge draw for visitors seeking to visit D.C.'s museums, monuments, memorials, and other landmarks. Let us take a look at how mid-sized hospitality companies have performed before, during, and what they will likely look like after the pandemic.

Booming before COVID-19

Prior to COVID-19 becoming a part of our daily lives, D.C. was a travel hotspot. For the last 10 years, hospitality and tourism enjoyed consistently healthy growth. The city was named the top destination of the New York Times' global list of "52 places to go in 2020." In 2019, D.C. welcomed about 25 million visitors.

Hospitality and tourism is responsible for roughly 80,000 jobs in Washington D.C. Before the pandemic, mid-sized companies, those that employ 50 to 499 employees, contributed 30,000 – 35,000 jobs to the local market.

Suddenly, everything changed. The pandemic arrived during D.C.'s most popular tourism season, the peak of the stunning cherry blossoms that dominate the National Mall every March (or April). Peak bloom also generally coincides with spring break and 8th-grade trips to our nation's capital. These events bring billions of hospitality and tourism dollars to the city and have historically contributed to the stability of jobs in this market.

During the pandemic

Unfortunately, as the coronavirus threat spread, travelers planning to visit D.C. were forced to cancel. The loss of the 2020 cherry blossom season alone cost D.C. about 1 million visitors. Like its small and large counterparts, mid-sized companies were drastically impacted, suffering huge revenue and job losses. By April 2020 60 D.C. hotels closed. The local luxury and boutique hotel market, comprised of numerous mid-sized companies, was heavily impacted by the loss of visitors in 2020 and early 2021. While D.C. is generally considered to be recession-proof, it turns out it wasn't "pandemic proof," Ally Schweitzer of WAMU said in an interview with NPR in March 2021.

• Numerous mid-sized hospitality-based businesses suffered large layoffs, including the Hay-Adams and Trump International Hotels; between these two alone, there were roughly 420 layoffs.
• The Jefferson, a boutique hotel, remains closed and is currently establishing a safe reopening policy.
• DC Improv, a local comedy club, laid off its entire staff of 50 employees last spring and then pivoted to live virtual shows on Zoom, showcasing big names in the industry and charging attendees $5 a show.

Hospitality and tourism took another huge blow in early 2021 between travel restrictions and businesses temporarily shuttering through inauguration week. No visitors on any large scale, no galas, no parades. The inauguration is normally a huge revenue generator for local hospitality companies, but in the end, was referred to as an "economic washout."

According to BLS, D.C. saw about a 3.5 percent higher rate of job losses in the hospitality and leisure industry between October 2019 and 2020 when compared with the rest of the U.S. Drilling down those numbers, in May 2020, there were 59 percent fewer hospitality and leisure jobs in D.C. than the previous May. By December, there were still 36 percent fewer jobs in this sector, which equates to about 30,000 less jobs. This fall will likely show somber numbers once inauguration and this year's spring tourist season are factored in.

Looking to the future

While positive signs of recovery are on the horizon, we are not out of the woods just yet. Hospitality and tourism is usually the last to recover after an economic downturn. In September, Washington Business Journal reported industry experts anticipate full recovery for hospitality and tourism to take roughly five years. However, domestic visitation could jump to 20 million people by next year, and "group bookings [are] key to getting back to normal."  

However, AAA recently ranked D.C. as a "most desired" U.S.-based destination for 2021. Domestic travel and the so-called “revenge travel” may enable hospitality and tourism to begin to recover to some extent. As of May 1, D.C. also entered Phase Two reopening. This means entertainment, movie theaters, weddings, and other venues can now allow 25 percent capacity. Once consumer demand returns, mid-sized businesses can slowly start to rebuild and rehire their workforce.

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