FIU Chaplin School of Hospitality & Tourism Management ...COVID-19 pandemic on the hospitality...

F L O R I D A I N T E R N A T I O N A L U N I V E R S I T Y

Economic Impact of COVID-19 on the Hospitality Industry in Miami-Dade County

-March through August of 2020-

C H A P L I N S C H O O L O F H O S P I T A L I T Y & T O U R I S M M A N A G E M E N TF L O R I D A I N T E R N A T I O N A L U N I V E R S I T Y

Background

• The purpose of this study is to estimate the economic impact of COVID-19 pandemic on the hospitality industry (Hotel and Restaurant sectors) in Miami-Dade County, FL

• A collaboration including input from the following:• Florida International University Chaplin School of Hospitality & Tourism

Management

• STR Inc.

• GMCVB (Greater Miami Convention and Visitors Bureau)

• Lee Pillsbury of Thayer Ventures

• Kalibri Labs

• Adara

C H A P L I N S C H O O L O F H O S P I T A L I T Y & T O U R I S M M A N A G E M E N T

Economic impact area: Miami-Dade County


Economic impact focuses on two hospitality sectors in Miami Dade County:

• Focused on impacts on two specified hospitality-related sectors in Miami-Dade County

• Hotel sector and restaurant sector

• Impact measured from March 2020 through August of 2020


Economic impact focuses on two hospitality sectors in Miami Dade County:

• Direct losses in sales revenue (year over year) are applied to the IMPLAN economic model to calculate the overall economic impact of revenue loss in the hotel and restaurant industry (in Miami-Dade County).


Measuring impacts using IMPLAN

• The revenue losses for the hotel and restaurant sectors (March-August 2020) were analyzed using IMPLAN economic impact modeling software

• Models such as IMPLAN (Impact Analysis for Planning) allow researchers to specify the impacts of events or activities on geographic areas (specifying cities, entire counties, regions or states) (Crompton, 2019).

• The total economic impact of COVID-19 includes about $3.36 billion as a result of hotel and restaurant sales revenue losses (March-August 2020) in Miami-Dade County.

Economic Impact: COVID-19

Direct Effect -$2,046,057,364

Indirect Effect -$664,672,206

Induced Effect -$651,785,279

Total Effect -$3,362,514,849

• Direct impacts of $2.05 billion includes losses (year over year) in direct spending on hotels ($1.3bn) and restaurants ($742m) in Miami-Dade County.





Total Effect -$3,362,514,849

• A total of $664.7 million in indirect spending from a reduction in hotel and restaurant business expenditures on raw materials, supplies and other operating expenses.





Total Effect -$3,362,514,849

• A total of $651.8 million in induced losses occurred as a result of the ripple effect (multiplier effect) of reduced worker incomes (not spending on the local economy).





Total Effect -$3,362,514,849

• A total of $1.2 billion in worker paychecks and income (in hotel and restaurant-related sectors) were lost as a result COVID-19 in Miami-Dade county (in March thru August of 2020).

Economic Impact: COVID-19 and labor income

Direct Effect -$783,757,372



Total Effect -$1,202,084,281

• Losses of $783.8 million in direct hotel and restaurant employee paychecks in Miami-Dade County





Total Effect -$1,202,084,281

• Loss of $216.5 million in indirect worker incomes of workers in other businesses supplying raw materials, supplies, and other operating goods and services to restaurants and hotels.





Total Effect -$1,202,084,281

• Loss of $201.8 million in induced worker income as a result of the ripple effect (multiplier effect) of direct & indirect income loss in the local impact area (Miami-Dade County).





Total Effect -$1,202,084,281

• Tax Impacts: A total of $53.2 million in county taxes were lost as a result of the reduction in hotel and restaurant revenue in Miami-Dade County.

Economic Impact: COVID-19 and tax effects

County Level -$53,150,019

State Level -$111,143,898

Federal Level -$263,957,942

Total Tax Effect -$428,251,859

• Tax impacts: A total of $111.1 million in state taxes lost as a result of the reduction in hotel and restaurant revenue in Miami-Dade County.






• Tax Impacts: A total of $264 million in federal taxes were lost as a result of the reduction in hotel and restaurant sector revenue in Miami-Dade County.






F L O R I D A I N T E R N A T I O N A L U N I V E R S I T Y C H A P L I N S C H O O L O F H O S P I T A L I T Y & T O U R I S M M A N A G E M E N T

Direct losses via gross sales reduction in restaurants and hotels resulted in US$3.36 billion removed from the local economy of

Miami-Dade County, Florida.


Miami-Dade County - hospitality impacts:

Restaurant and hotel sectors

COVID-19 March-August 2020 Economic Impacts by the Numbers

$3.36 billionTotal economic loss

from the reduction in

revenue/sales in the

hotel and restaurant

sectors.

$1.2 billionTotal worker

paychecks lost in

the hotel and

restaurant sectors.

$428.3 millionTotal County, State &

Federal taxes lost

from the reduction in

revenue in the hotel

and restaurant

sectors.

• Total hospitality employmentfrom January thru August 2020 in Miami-Dade County

The percentage change comparing 2019 to 2020 is included (reduction in the hospitality workforce, year over year).

Hospitality 2020 employment:

147,100 150,100 142,700

80,300

93,500

117,500112,500 109,400

January, 2.4%

February, 2.9%

March, -3.6%

April, -45.4%

May, -37.3%

June, -18.5%

July , -21.7%

August, -23.7%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST

Miami Dade County Hospitality Employment: January thru August 2020

Source: Bureau of Labor and Statistics

• These are unemployment rates comparing Broward Co., Palm Beach Co., Miami Dade Co., the tri-county area and the national average

Aug 2019 vs. Aug 2020

Unemployment Rates:

Source: Bureau of Labor and Statistics

3.8%

3.0% 3.2%3.6%

2.6%

8.5% 8.5%9.2%

8.1% 8.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

United States Miami MSA BrowardCounty

Palm-BeachCounty

Miami-DadeCounty

Unemployment-Rates: August 2019 vs. August 2020

Aug-19 Aug-20


• 5.87 million international arrivals March thru August 2019

• 752,099 international arrivals March thru August 2020

• 87.2% decrease from 2019

• 5.89 million domestic arrivals March thru August 2019

• 1.66 million domestic arrivals March thru August 2020

• 71.8% decrease from 2019

Decline in inbound flights to MIA


Future Challenges

• Mitigation of future outbreaks• Improvement: Does the phase 3 reopening succeed?

• Effectiveness of vaccine, therapeutics

• Government policy/support for hospitality-related business

• Consumer ability to travel

• Consumer confidence (safe to travel, attend hospitality-related business?)• International travel

• Leisure and business travel for those with medical conditions and the elderly

• Group business (Corporate, trade shows)

• Events (Festivals, community events)


• Andrew Wobensmith

• Lee Pillsbury

• Robert Mandelbaum

• Michael Cheng

• Milan Patel

• Vince Cusma

• Duane Vinson

Special Thanks


The report’s authors/editors:

Eric Beckman, Ph.D.Assistant Professor, Chaplin School of Hospitality & Tourism Management

Florida International University

Jinlin Zhao, Ph.D.Professor, Chaplin School of Hospitality & Tourism Management


Twila-Mae Logan, Ph.D.Assistant Professor, Chaplin School of Hospitality & Tourism Management


Michael Cheng, Ph.D.Dean, Chaplin School of Hospitality & Tourism Management


Tianyu Pan, M.S.Chaplin School of Hospitality & Tourism Management


FIU Chaplin School of Hospitality & Tourism Management ...COVID-19 pandemic on the hospitality...

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