Study shows hospitality and tourism industry resilience, post-COVID, in Rhode Island

In partnership with the RI Hospitality Association (RIHA), the Spring 2023 ECN-307 Introduction to Econometrics class at Salve Regina University has conducted a comprehensive analysis of Rhode Island’s hospitality and tourism industries’ recovery post COVID-19, under the guidance of Samuel Sacco, Senior Lecturer of Business and Economics; Stacey Carter, Strategic Partnership Officer; and Dr. Melissa Varao, Chair of the Department of Business and Economics. 

The study’s findings, comparing fiscal years 2019 (pre-COVID) and 2022 (post-COVID), shed light on the intricate dynamics of the state’s economic resurgence. The evaluation encompassed direct, indirect, and induced monetary effects on a statewide level, as well as within individual counties: Bristol, Kent, Newport, Providence, and South County (Washington County). The study also considered the broader macroeconomic landscape and industry transformations.

Economic Impact:

●        Rhode Island’s hospitality and tourism spending in 2022, adjusted to 2019 equivalent dollars, has reached 93% of pre-COVID levels, yet remains $550 million below 2019 figures.

●        Despite lower corporate travel and major event revenues, lodging experienced a surge in leisure travel, while food and beverage thrived with increased delivery services and outdoor dining.

●        Counties such as Bristol (-11%), Kent (-10%), Newport (-14%), and South County (-31%) saw overall adjusted 2022 revenue below 2019 levels, whereas statewide revenue for Lodging (-19%), Events & Meetings (-4%), Tourism & Attractions (-14%), and Food & Beverage (-5%) remained depressed.

●        Statewide adjusted 2022 revenue for Lodging (-19%), Events & Meetings (-4%), Tourism & Attractions (-14%), and Food & Beverage (-5%) remained below the 2019 levels.

Impact of Additional Macroeconomic Factors:

●        The post-COVID travel surge drove high demand for hotel rooms, yet construction of new properties remains limited, contributing to tight supply dynamics.

●        Inflationary pressures, notably escalating energy costs and rising expenses for goods and services, have further shaped the economic landscape, impacting industry operations and cost structures.

●        Corporate travel continues to lag due to limited travel and reduced large-scale events, necessitating a compensatory increase in leisure travel to offset losses.

Employment Impact:

●        COVID-19 resulted in the loss of 35,000 – 40,000 hospitality and tourism jobs in Rhode Island.

●        Current employment levels stand at 85% – 90% of 2019 figures, although labor shortages continue to challenge recovery.

●        The study anticipates ongoing recovery in 2023, especially in personal and leisure travel, while corporate travel and professional meetings lag behind.

Conclusion:

●        Despite challenges, Rhode Island’s hospitality and tourism industries demonstrate resilience.

●        Continued revenue and employment recovery are projected for 2023.

●        Personal and leisure travel spearheads the resurgence, while labor shortages and inflation are expected to moderate but persist.

Rigorous adjustments accounting for inflation and industry-specific conditions from 2019 to 2022 have been applied to the raw 2022 data. These adjustments, 18% for inflation and 25% for industry conditions, enable a direct comparison of 2022 spending to equivalent 2019 figures, mitigating the impacts of inflation and industry shifts during this period.

“The students were thoroughly engaged in the study since many of them work part-time in the hospitality and tourism industries as well as live in Newport and surrounding communities,” said Samuel Sacco, Senior Lecturer of Business and Economics, Salve Regina University. “They found it interesting to correlate revenue and spending data for these industries with their own personal observations during different times of the year and prior pandemic experiences. The study was complex and nuanced given changes in the industry business models and varying economic conditions, but the students exhibited diligence, teamwork, intellectual curiosity, and a sense of ownership throughout the project. I am very proud of their professionalism and commitment to quality analysis. Everyone contributed in a meaningful way.”

“The collaboration between Salve Regina University and the RI Hospitality Association has yielded invaluable insights into the trajectory of our state’s hospitality and tourism industries post-pandemic,” stated Dale J. Venturini, President/CEO, RI Hospitality Association. “The information provided by the diligent work of the students provides not only a statewide snapshot of recovery, but drills down into localized progress, empowering our industries’ stakeholders to make informed decisions.”

About the RI Hospitality Association (RIHA):

With more than 900 foodservice, hotel, vendor, and other hospitality members in Rhode Island, the RI Hospitality Association (RIHA) has been the voice of the hospitality industry in the state since 1963. For more information on RIHA, please call (401) 223-1120, or write to: RI Hospitality Association, 94 Sabra Street, Cranston, RI, 02910, or visit www.rihospitality.org. 

About Salve Regina University:

Salve Regina University is a Catholic, coeducational institution of higher education founded by the Sisters of Mercy in 1947. For more than 75 years, Salve has offered rigorous and innovative academic programming in the liberal arts tradition that prepares students to be global citizens and lifelong learners. More than 2,700 undergraduate and graduate students are enrolled at Salve from across the U.S. and around the world in 48 undergraduate majors, 13 master’s degree programs, numerous combined bachelor’s/master’s programs, and doctoral programs. 

Each undergraduate student participates in the Salve Compass Program, a four-year transformational framework through which students explore their strengths and interests, developing the experience, skills, and wisdom required for a long, fulfilling career and to make a positive difference in the world.

Salve is also home to the Pell Center for International Relations and Public Policy, designed to generate new ideas, to expand public understanding of important issues and, ultimately, to help the public and its leaders make better decisions. Dedicated to honoring Sen. Claiborne Pell’s legacy, the Pell Center is animated by his belief that politics is about translating ideas into action to help people.