On November 17th, more than 100 workforce practitioners and stakeholders joined Workforce Professionals Training Institute (WPTI) and the New York City Economic Development Corporation (NYCEDC) to learn about the state of one of New York City’s most important sectors: Hospitality. This gathering was the second in our Employer Symposium Series spotlighting the impact of the COVID-19 economic downturn on different sectors across the city. Speakers and panelists representing a diversity of perspectives – economists, tourism executives, business associations, labor organizations, hospitality employers and more – shared detailed information on the current state of the sector, actions to support both businesses and workers, and prognoses for recovery . . . and how workforce development organizations can help in that recovery. We are pleased to share their insights below.
New York City’s hotels and restaurants are fundamental to the city’s identity and a huge part of what draws tens of millions of tourists to the city annually. At the beginning of 2020, as many as 400,000 New Yorkers worked in hospitality, the largest employer of entry-level and non-degree workers in the city. The in-person nature of hospitality, however, left it uniquely vulnerable to the downturn driven by the COVID-19 pandemic. Dramatic drops in both domestic and international tourism, restrictions placed on restaurants and bars for public health and safety, and a shift to virtual work for vast majority of office workers in the city’s central business districts have decimated many of the city’s restaurants, bars, cafes, and hotels. Job losses have fallen hardest on people of color and immigrants, who made up 80% of the sector’s workforce at the start of the year.
The Big Picture for New York City’s Hospitality Labor Market
Dr. James Parrott of the New School’s Center for New York City Affairs, one of New York City’s leading labor market economists, and Fred Dixon, President & CEO of NYC & Company, the City’s official tourism agency, detailed the impact of the hospitality sector on New York City’s economy.
- In 2019, more than 66 million tourists visited the city, contributing over $40 billion dollars to the local economy.
- In 2020, overall tourism spending will be down by more than two thirds, with tourism rates unlikely to return to pre-pandemic levels until 2023 or 2024.
- Hospitality job losses due to COVID-19 outnumber layoffs in multiple other sectors combined.
- Prior to COVID-19, New York City’s hospitality sector included 18,000 restaurants, 2,500 coffee shops, 1,500 bars, and 900 hotels. Together, these employed more than 370,000 workers.
- Pre-pandemic, full-service restaurants accounted for the largest percentage of hospitality jobs in the city, at 45%, with limited-service/fast food restaurants accounting for 30%, hotels 14%, and other jobs (including caterers, contractors, and bars) 11%. Job losses have also been most severe at full-service restaurants, accounting for 56% of the sector’s losses.
- The impact of COVID-19 on New York City’s hospitality workforce has been particularly severe, with hospitality jobs down 42% in New York City, compared to 17% nationally.
- The impact on workers of color and immigrant communities has been especially devastating, as the city’s hospitality workforce was 80% people of color, and more than 60% immigrants.
In light of the extreme hardship suffered by the hospitality sector, Parrott made several policy recommendations, including:
- State action to clarify rules regarding access to unemployment benefits – especially around partial unemployment – to ensure workers don’t lose benefits to which they are entitled. Better unemployment guidance is also needed for vulnerable workers for whom a return to the workplace prior to an effective vaccine is unsafe.
- Federal action is required to extend unemployment coverage and eviction moratoria, support small businesses as well as struggling local and state agencies, and enhance safety net components like childcare.
Panel 1: Leaders and Experts from the Hospitality Sector
Every day across the city, a wide variety of economic development initiatives, business associations, labor organizations, advocacy groups are helping hospitality employers and workers weather the downturn. Symposium speakers from these organizations emphasized that their work these days focuses primarily on survival.
- Sekou Siby, President and CEO of Restaurant Opportunities Centers United described the organization’s cash assistance program for displaced hospitality workers, many of whom are not eligible for unemployment insurance. In recent months, the organization has enhanced its virtual training to upskill workers for when the sector begins rehiring.
- Nikoa Evans-Hendricks, co-founder of Counter Culture Hospitality Group and Executive Director of Harlem Park to Park, which provides information and technical assistance, focused on developing innovative community partnerships to support local businesses.
- Sarah Diehl, Founder & Principal of Empowered Hospitality, and Jill Silman Chapman, Senior Performance Consultant with Insperity, emphasized the critical need for human resources support among hospitality businesses, especially those without in-house HR operations. Furthermore, Empowered Hospitality is helping hospitality businesses with diversity, equity, and inclusion initiatives.
- Amy Bokerman, attorney with the Hotel Trades Council labor union, stressed the importance of worker safety, personal protective equipment (PPE) and hand washing stations, and enforcement of social distancing rules within the workplace. With the overwhelming majority of union members currently out of work, the union has secured health insurance for furloughed and laid-off workers through the end of the year.
Panel 2: Hospitality Employers
Throughout 2020, hospitality employers have been forced to find new ways to operate safely and new sources of revenue. They have made painful decisions to furlough existing staff, and figure out how to bring staff back. Employers on the panel shared reflections on the impact of COVID-19 on their operations as well as potential opportunities for hiring in the future.
- Across the sector, health guidelines have resulted in significant changes around worker and customer safety, causing significant expenses for businesses and impacting customer experience. Multiple panelists mentioned the mandatory health checks, use of hand sanitizer, mask requirements, limited interaction between staff and customers, and other policy shifts.
- Businesses primarily serving tourist customers have been impacted the most over the past year. George Ntim, Market Director of Diplomatic and Community Relations at the Marriott Marquis, described the steep and ongoing drop in reservations among hotels across the city. Jeff LaPadula, co-owner of Times Square’s S. Kitchen, noted the devastating impact on restaurant business in the midtown area caused by the shuttering of Broadway shows.
- Businesses with a greater local (rather than tourist) clientele have been impacted less severely, and in many cases have successfully adapted revenue flows. Christopher Gandsy, Chef & Brewer at Brooklyn’s Daleview Biscuits and Beer, and Anita Trehan, founder of Harlem’s Chaiwali restaurant, both noted sharp increases in takeout orders that have led to the hiring of additional delivery workers.
- Chaiwali, Miss Mack Enterprises, WeClean Hospitality, and Insperity are still adding staff, while others like Marriott Hotels, P.S. Kitchen, and Empowered Hospitality are open to participating in a virtual job fair.
- Employers noted that operations changes adopted during the pandemic may continue when the sector recovers, changing both the needs of hospitality employers and jobseeker requirements around flexibility and sales skills.
- The majority of panelists expressed an openness to working with community-based workforce development organizations, either for internship opportunities or more long-term hiring partnerships.
The past year has shaken much of the hospitality sector. Across the city, hundreds of businesses have shuttered and hundreds of thousands of workers have been idled. Over time, however, the sector will rebound with widespread vaccinations and the return of tourists and office workers – New York City is too dynamic and too powerful a draw to keep people away forever. As the sector recovers, New York City’s workforce development community can partner with employers and intermediaries to prepare new workers and fill hiring needs.
What’s Next?
WPTI will host our next Employer Symposium in partnership with the New York City Economic Development Corporation, focused on the healthcare sector, on January 19, 2021 from 8:30-10:30am. Particularly at a time when healthcare workers are more essential than ever, employers in this sector are continuing to hire for a wide range of positions. Please CLICK HERE to register for our HEALTHCARE SECTOR symposium.
In the coming months, we will host two additional symposia, with a session focused on the TECHNOLOGY SECTOR on February 16, and one focused on MANUFACTURING AND CONSTRUCTION on Tuesday, March 16. Stay tuned for more information, including our guest panelists and other speakers.