While occupancy and meals tax income for the Outer Banks is back in line with pre-pandemic levels after back-to-back record high years, the same can’t be said across the rest of the country.
Recent research from the U.S. Travel Association reports that while travel spending nationally through October remains 3 percent above 2019 levels, and domestic leisure travel forecasts remain positive, domestic business travel will experience a slight slowdown in 2023 as the economy enters a mild recession.
As well, overseas arrivals still remain 30 percent below 2019 levels. The forecast for international travelers to the U.S. remains sluggish with a full recovery not expected until 2025.
Though the overall jobs market in the U.S. has surpassed pre-pandemic levels, the leisure and hospitality sector (L&H) remains behind pre-pandemic levels. This sector has a higher share of jobs still lost than nearly all other industries. Accommodations remain the farthest behind “sub-category” within L&H in terms of employment with a 17 percent share of job loss since February 2020.
*Note that L&H is used as a proxy for the travel industry as they have historically followed similar trends
Despite ongoing losses in L&H jobs, the number of job openings has increased. In September 2022, L&H’s share of job openings (job openings rate) was 9.3 percent compared to a 6.5 percent opening rate for the overall economy. This sector has experienced a disproportionate number of “job quits” as a result of the pandemic and the “job quits” rate remains elevated. Of the 4.1 million Americans who quit their job in September, 21 percent of them were jobs in the L&H sector. There are not enough unemployed people to fill these new positions.
As a result of the competition for L&H employees, wages in this sector have grown significantly. In October 2022, L&H wages were 23 percent higher than 2019 levels while overall private sector wages were up 15 percent.