Visitor Spending in Northwest Oregon

by Erik Knoder

November 15, 2021

Visitor spending fell to $953 million in Northwest Oregon in 2020. This was a decrease of 42.3% after adjusting for inflation from 2019. Visitor spending had been increasing since 2011 until the pandemic recession struck and businesses were curtailed in March of 2020. The fall in spending in 2020 followed growth that had averaged about 3% per year since 2011. The region had seen drops in spending before, such as during the Great Recession, but nothing compared with the collapse in 2020.

Leisure and hospitality was commonly the largest industry sector in Northwest Oregon. It provided nearly 13,300 payroll jobs on an annual average basis in 2020. This was about 15% of all jobs (excluding self-employment) in Benton, Clatsop, Columbia, Lincoln, and Tillamook counties combined. The two largest parts of the sector are the accommodation industry (e.g. motels and campgrounds), and the food services and drinking places industry (e.g. restaurants and bars). The industry’s health depends in large part on spending by visitors.
Visitors also spend money in other industries such as retail trade, transportation, and even health services when vacation accidents happen. But because visitors account for a smaller portion of spending in these industries, the leisure and hospitality sector is considered the bellwether for tourism.

Visitor spending peaked in 2006 at $1.37 billion (2020 dollars), and then fell 2% the next year. It was up and down during the Great Recession and recovery. It fell to $1.29 billion in 2011 and climbed from then until the pandemic hit in 2020. Travel and occupancy restrictions reduced the number of customers available for lodging and food service businesses, and many tourism businesses closed or dramatically reduced their offerings.
Benton County had the second-largest drop in visitor spending (-57.2%) of all counties in Oregon. Benton County’s leisure and hospitality industry remains one of the worst hit in the state. In September 2021 industry employment remained 18% below the level of September 2019. Multnomah County (Portland) is the only metro county that has a larger loss of jobs remaining. This is probably due to changes by students at Oregon State University. In person learning is just returning to OSU and it may take a while for their leisure and work activities to return to previous levels.

Employment in the leisure and hospitality industry can provide some insight into how visitor spending is faring in 2021 – and it’s improving rapidly but is still not completely recovered. Employment in the five counties dropped an unprecedented 55% from March to April in 2020. Employment in April 2021 was 100% higher than the year before, but it remained 14% lower than in April 2019 – the last year before the pandemic recession. As Northwest Oregon’s leisure and hospitality headed towards the winter of 2021 employment was starting its seasonal decline. Preliminary employment estimates show leisure and hospitality employment this September was 8% more than September 2020, but it remained 2,370 jobs below September 2019.

The long term outlook for visitor spending is good. The leisure and hospitality industry’s employment in Northwest Oregon is expected to grow 44% from 2020 to 2030. Most of that growth is based on the expectation that the industry recover to its former level. After that, the industry’s employment will probably growth at a little less than 1% per year. A major unknown factor will be how the pandemic recession and subsequent tight labor market will affect its adoption of labor-saving technology and business practices. Businesses may also be more likely to implement service models, such as takeaway food, that allow them more flexibility in adapting to any future pandemic. There is nothing leisurely in the work life of industry managers!

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