Apart from our heroic hospital and first-response workers who show up tirelessly and selflessly on the front line every day to care for those sickened by coronavirus, no service sector personifies the impact of the pandemic more than hospitality.
The widespread shuttering of local hospitality businesses — our central gathering places and meeting spaces, our community grounds for ceremony, commemoration and celebration — has brought home the fact that hospitality is the cornerstone of our community life.
Normal circumstances may have let us take this cornerstone for granted. After all, we’ve come to rely on plenty of available options to host our festivities — a wedding or bar mitzvah, a graduation or quinceañera. We expect hospitality businesses to be there to enrich our daily lives — grabbing a quick meal before soccer practice, going to Easter brunch, catching the game among friends, or finally breaking bread together again after staying apart for so long to keep our neighbors safe.
But we are far from normal circumstances, and the temporary closure of hospitality businesses gives us a harrowing glimpse of what our communities could look like — on a long-term basis — once this pandemic subsides. Unless, that is, lawmakers take action to make it rational economically for our favorite local restaurants and bars, hotels and inns, breweries and coffee shops to remain in business through this quarantine economy and beyond.
As the largest private employer in our state, the hospitality industry and the 296,600 jobs it provides also form the backbone of Washington’s economy. Notably, 40% of our restaurant employees are minorities.
Few sectors drive as much economic value through as far-reaching a web: Our industry forms a hub that links sellers, farmers, distributors, suppliers and service providers, where more than 96 cents of every dollar spent in a typical hospitality business flows right back into the economy. More than one-third of our businesses are minority-owned, and more than 60% of our businesses are women-owned or co-owned. In a single quarter in 2019, before the pandemic hit, restaurants and hotels were responsible for $3.5 billion in total sales in Washington.
While our value to the community and economy is our great strength, it’s also what’s made us more vulnerable than almost any other sector to the impacts of the pandemic. Early data are sobering — and represent the initial slide into what may well become a free fall.
Hotels, inns and bed & breakfast homes lost an estimated $194 million in sales and more than 29,473 jobs in March. Even though Gov. Jay Inslee didn’t close in-house dining in restaurants until March 17, restaurants still lost an estimated $404 million in sales and more than 78,000 jobs. Our sector has seen almost twice as many unemployment claims as the next closest industry — this, while many businesses still retain some of their employees for takeout and delivery.
But the fact is, while takeout and delivery may keep some restaurants on life-support during this hemorrhaging, it will not be enough to bring them to full health. Lodging businesses are standing nearly empty. Fixed costs don’t evaporate when revenue does. Ramping up operations after being shuttered will require a ramping up of costs — and restaurants and hotels will not quickly return to previous levels of business when the stay-at-home order expires.
The vast majority of the hospitality sector is made up of small businesses. All are trying everything they can to rebuild their operations and keep their doors open. Yet the tragic fact remains: The cost of staying in business plus constrained revenues for the foreseeable future will cause hospitality businesses throughout our state to shut down — and cause our communities to become less vibrant and thriving, less social and connected as a result.
Yet, even while reckoning with these massive impacts, hospitality businesses across Washington are still serving food and serving communities, extending hospitality in new and needed ways by donating food and lodging for those in need — including hospitality for hospital workers.
Because hospitality businesses are so intertwined with the fabric of our local economies, it’s no stretch to say that if our sector is failing, so is the broader economy — and if our sector is thriving, so is the broader economy. At a time when economic stimulus is needed most, state lawmakers should remember that stimulus happens through hospitality.
How can lawmakers help?
• With little to no cash flow and accumulating debt, hospitality needs relief from — not deferment of — expenses, including tax and utility credits, and rent relief;
• New agency rules and requirements on hospitality must be deferred until businesses are returned to health, and new proposals that would further compound economic harm should be reconsidered;
• Stimulus funding to promote our state’s many great experiences and encourage Washingtonians to rediscover Washington when it’s safe to travel again.
What can you do?
• Let lawmakers and council members know how important the hospitality business is to you and your community, and how important it is that they take the steps outlined above;
• You can help our employees, who need support today;
• If you travel this summer or fall once it’s safe to do so, take the opportunity to explore Washington and support our communities into recovery.
When the pandemic passes, Washingtonians will expect — and need more than ever — our gathering places and meeting spaces to be there for them.
With help from you and our state lawmakers, when we reach the other side of this crisis, your favorite local establishments will be there to welcome you and the community, ready to serve.