The back half of 2020 remains a horrible time to own a hotel in downtown Spokane.
The accommodation and food service industry was the hardest hit sector of the local economy, and it continues to suffer even though a number of jobs have returned, said Doug Tweedy, regional economist with the Washington state Department of Employment Security.
Based on numbers from September, hotels and restaurants are employing about 7,000 fewer employees than in 2019 in the Spokane region, which includes Pend Oreille and Stevens counties.
“That industry has been hit the hardest through the pandemic because of that personal contact,” Tweedy said.
Hotelier Walt Worthy can attest to that. Last year, he employed more than 1,200 employees on an ongoing basis at his five Spokane hotels, including The Historic Davenport.
“Now we have between 300 and 400 employees,” Worthy said. “I feel awful having to furlough people who have been around for years and years and years. But there’s nothing you can do. You need something for them to do.”
Gov. Jay Inslee recently eased some COVID-related crowd restrictions, and that has prompted some businesses to reach out to Worthy’s planners about some potential future business. His downtown properties, including The Davenport Tower, The Davenport Grand, The Davenport Lusso and The Centennial by Davenport Hotels require groups and business conventions to fill nearly 1,800 rooms.
“Leisure travelers are what we are relying on now, but there is not enough of them to fill up the rooms,” Worthy said. “We are not expecting anything but a long, cold winter before things get better.”
Tweedy said at the peak of job loss, about 6,000 workers from the accommodation and food services sector sought unemployment. About 4,000 of those sought assistance from the state and 2,000 from a federal program that for the first time provided unemployment benefits to part-time and self-employed contractors.
The most recent numbers show that about 3,200 people remain unemployed in that industry, meaning that 40% have gone back to work, he said.
“We are seeing some encouraging signs,” Tweedy said.
Grant Forsyth, chief economist for Avista Corp., said the accommodation and restaurant industry and others could benefit from another round of stimulus, which continues to flounder in Congress.
“What is going to fix this for hotels is that people are going to have to start traveling and mingling again,” Forsyth said. “Until we have a vaccine to get COVID under control, it’s going to be very hard to have that environment again.
“It takes time to both develop and distribute a vaccine and to convince people to take it,” he continued. “A second stimulus can lessen the blow between the time a vaccine is created and when it’s widely dispersed.”
A new survey of the American Hotel & Lodging Association echoed those concerns. About 74% of the respondents indicated they would be forced to lay off more employees without further economic assistance.
Worthy said the Payroll Protection Program, or PPP, helped him keep hundreds of employees on the payroll, but that funding has been spent.
“We are limping along,” Worthy said. “We are trying to keep the guests as comfortable as possible. But there is not much you can do about it.”
The PPP, administered by the U.S. Small Business Administration, pumped $525 billion into the national economy. Now all that money has been allotted, and employers have to decide how to proceed.
Business owners “have to look at employment levels again,” Forsyth said. “They either have to cut employment or shut down entirely.”
The federal grants funneled money directly to workers who couldn’t work because of safety restrictions related to the coronavirus.
“The research strongly shows that (PPP grants were) a major income replacement for a lot of workers,” Forsyth said. “That helps support consumption, which is an important driver of the economic activity.”
For now, Worthy said he is keeping his five hotels open – and only some of his restaurants – with a skeleton staff.
“We have lost some people who have been with us a long time,” he said. “You can’t blame them” for finding other jobs. “It will get better when people start flying again.”
“Leisure travelers are what we are relying on now, but there is not enough
of them to fill up the rooms. We are not expecting anything
but a long, cold winter before things get better.” Walt Worthy Spokane hotelier
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