Visitor Spending in Northwest Oregon

December 14, 2020

Visitor spending rose to $1.63 billion in Northwest Oregon in 2019. This was an increase of 2.1% from 2018. Visitor spending has been increasing since 2011, although data are not available to see if spending in 2020 has slowed. The the growth in 2019 was more than in 2018 but slower than in many preceding years. Slower growth in an industry is typical as an economic expansion matures, and growth in visitor spending has been generally slowing since 2014.

Leisure and hospitality is the largest industry sector in Northwest Oregon. It provided nearly 17,100 payroll jobs on an annual average basis in 2019. This was about 17% 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 $1.35 billion (2019 dollars), and then fell two percent the next year. It was up and down during the Great Recession and recovery. It was $1.28 billion in 2011 and climbed from then until the pandemic hit in 2020. Complete data on visitor spending since the pandemic in the spring of 2020 are not available yet, but it is probably safe to assume that it will be lower than in 2019. Travel and occupancy restrictions have reduced the number of customers available for lodging and food service businesses, and many tourism businesses have closed or dramatically reduced their offerings.
Employment in the leisure and hospitality industry can provide some insight into how visitor spending is faring in 2020–and it’s bad. Employment in the five counties dropped and unprecedented 53% from March to April. March is typically one of the months when industry employment is at its lowest. As restrictions eased employment grew until August. This was the high point for the summer season, but employment remained 10% below the level in March. In other words, high season employment remained slightly worse than the normal winter low point. As Oregon’s leisure and hospitality headed into another winter employment was falling again; October’s leisure and hospitality employment was 4% below the August peak. These economic conditions have not been sustainable for some businesses, especially in food service, and they have closed permanently.

Benton County’s leisure and hospitality industry remains one of the worst hit in the state. In October industry employment remained 24% below the level of March 2020. This may be due in part to changes in behavior by students at Oregon State University. The OSU Corvallis campus had 937 fewer students enroll in the fall of 2020 compared with the fall of 2019, even though total OSU enrollment rose by 585. More students were enrolled for online learning. It is also possible that students are socializing even less than other residents.

The long term outlook for visitor spending is good. The leisure and hospitality industry in NW Oregon is expected to grow 8% from 2019 to 2029. The short term outlook is much more challenging. It is almost certain that more visitor dependent businesses will close during the winter of 2020-2021, especially since many were unable to save money during the past summer. The end of the pandemic can’t come too soon for many businesses in NW Oregon.