Oregon’s Leisure and Hospitality Industry

by Guy Tauer

August 13, 2018

Leisure and hospitality businesses employed 206,000 workers, annual average, in 2017. Of those, roughly one out of eight were employed in accommodations, about the same as in arts, entertainment, and recreation. The largest share, three-fourths, works in food services and drinking places. The saw-toothed look on the graph shows the seasonal nature of work in this tourism-related industry.
During the Great Recession, employment in this industry fell by 6.1 percent from 2008 to 2010. Oregon’s all-industry employment decline was slightly steeper, with payroll jobs declining by 7.4 percent from pre-recession peak to trough. By 2017, leisure and hospitality employment rose by 26.9 percent compared with a gain of 16.9 percent for total industry employment. As of June 2018, leisure and hospitality is still showing strong job growth, rising by 4.8 percent (+10,200 jobs) since June 2017. Over the most recent 12 months ending in June, accommodations employment increased by 7.1 percent.  Slightly slower but still solid job growth was estimated in arts, entertainment and recreation (6.0 percent) and there was a 4.6 percent gain in payroll employment in food service and drinking places, up by 8,500 jobs. Leisure and hospitality is now 44,300 jobs above its pre-recession peak.
More Older and Fewer Younger Workers

The largest cohort of workers in the leisure and hospitality industry are 25 to 34 years old. This group is just over one-quarter of all workers. This share was essentially unchanged since 1991. The share of workers age 22 to 24 (10.7%) and 35 to 44 (18.1%) in the second quarter of 2017 was also little changed from two decades earlier.

The larger changes in age composition of the leisure and hospitality workforce occurred in the older and younger age groups. In the second quarter of 1991, 28.1 percent of workers were ages 14 to 21. By the second quarter of 2017, only 17.2 percent of the industry’s workforce was in this younger group. On the other extreme, workers 45 and older composed 16.2 percent of the industry’s workers in the second quarter of 1991. The most recent data show that workers age 45 and older accounted for 28.8 percent of leisure and hospitality jobs in the second quarter of 2017. Detailed data regarding demographic composition of the workforce are available from the Census Bureau’s Local Employment Dynamics program.

Connection to Tourism

We often think of leisure and hospitality as a tourism industry. While many jobs in this industry are reliant upon tourism, local spending also plays a significant role. The Oregon Tourism Commission contracts Dean Runyan Associates to produce travel spending impact analysis for Oregon. According to their Oregon Travel Impacts 1992-2017p report’s preliminary estimates, travel spending generated 71,200 direct jobs in the accommodations and food services sector and 19,400 direct jobs in the arts, entertainment and recreation sector in 2017. Combined, these jobs made up about 81 percent of total direct travel-generated employment that year. Retail and wholesale trade, professional and business services, and transportation were other industries that had direct travel-generated employment in Oregon.  While tourism is undoubtedly critical to the growth and success of many leisure and hospitality jobs, there are likely even more that depend upon local business and customers. Dean Runyan Associates’ most recent visitor volume and travel impact report can be found at: www.deanrunyan.com/doc_library/ORImp.pdf

Leisure and Hospitality’s Sales and Share of Oregon’s Gross Domestic Product

According to the 2012 Economic Census, sales in Oregon’s accommodations and food services industry totaled $8,466,788,000 – nearly $8.5 billion. Five years earlier, total sales in Oregon were just over $7.5 billion.

Since Oregon doesn’t have a sales tax, information regarding sales for many industries is rather scant. Data from the Economic Census, such as number of establishments, annual payroll and number of paid employees, are available to the five-digit NAICS industry level for many industries statewide. Go to census.gov for more details about the components within the leisure and hospitality industry from the Economic Census.

Oregon’s leisure and hospitality industry’s gross domestic product (GDP) declined steeply from 2007 to 2009, down nearly 10 percent. The industry fully recovered by 2012, with GDP totals above the pre-recession level. In its seventh year of expansion in 2017, total value of all goods and services from Oregon’s leisure and hospitality industry was 47.8 percent above the recession’s low point in 2009, at more than $13.4 billion. Surprisingly, even with the growth in recent years, the relative share that the leisure and hospitality sector contributes to Oregon’s overall economy declined from 7.2 percent in 1997 to 6.3 percent in 2017.

Gross domestic product data are one of the most widely cited economic indicators. These data capture the estimated value of all goods and services produced in the economy. GDP is less than total sales because it does not include the cost of inputs to an industry. The Bureau of Economic Analysis produces Gross Domestic Product data by industry category.
Most Oregon Leisure and Hospitality Establishments are Small

In Oregon, there were just 123 leisure and hospitality establishments that had 100 or more workers at the beginning of 2018. There were about 10 times as many establishments with no paid employees. Size of establishment data are published for only the first quarter of each year, typically the slowest season for leisure and hospitality, so that may skew these values. An establishment may have no paid employees during the slowest winter months, and then bring on seasonal workers during the busier summer months. The majority of establishments had between one and 19 workers and slightly fewer employing between 20 and 49 workers. Of Oregon’s 204,209 leisure and hospitality jobs in March 2016, 124,737 were in establishments with 10 to 49 workers.
Coast Most Dependent on Leisure and Hospitality

Lincoln and Clatsop counties are the most leisure and hospitality dependent in Oregon, with more than twice the share of employment as in Oregon statewide. Curry and Tillamook counties also have a strong concentration of leisure and hospitality jobs.

The map displays the location quotients for the leisure and hospitality industry within Oregon. Location quotients are a measure of industry employment concentration. If a county has a location quotient of 1.0 that means its relative percentage of leisure and hospitality jobs compared with the all-industry total is the same share of employment in that industry as the statewide total.

Tourism hot spot counties such as Hood River and Deschutes have strong leisure and hospitality location quotients. Sherman and Wasco counties, along the I-84 corridor, also have relatively strong concentrations of leisure and hospitality employment.

Oregon as a whole has a very similar concentration of leisure and hospitality jobs to the United States.
Conclusion

Over 200,000 jobs can be found across Oregon’s 13,800 leisure and hospitality establishments. Many Oregonians, including myself, started their careers working in restaurants. Those skills, such as getting along with coworkers, showing up ready and able to put in a full shift, providing quality customer service and countless more, are essential and transfer to many other industries and jobs. While the overall workforce is aging, the leisure and hospitality workforce is also going through its own aging, with jobs held by older workers steadily increasing over the past 20 years.

 


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