Orange County’s tourism industry experienced significant job loss caused by pandemic, report shows

Orange County’s tourism industry took a major hit because of the coronavirus outbreak, losing the largest chunk of employment across the job market from 2019 to 2020 with the biggest impact felt most in younger, diverse areas of the county, according to a countywide report.

The pandemic’s disproportionate impact on this industry is one of the key findings of the report published in October by the Orange County Center of Excellence, which analyzed labor market data from a variety of proprietor and public sources. The report includes historical data but zeroes in on the time period between when the pandemic began in the United States, in early 2020, to July 2021.

The report, created by the OC CEO, a regional campaign aimed at raising awareness about career education at O.C.’s community colleges, concluded junior colleges should target these displaced workers and show them available training opportunities.

“I’m a big believer in continual education and in today’s environment, we have to stay fresh with our skill set,” said Gary Sherwin, president and chief executive of Visit Newport Beach, the local tourism bureau. “I do think for for displaced workers learning a new skill set, even if they come back to the hospitality industry, it’s a good time to reinvent what you want to do and how to live your life.”

In Orange County, the tourism industry is one of its main economic drivers with its 42 miles of coastline, lush parks, sports arenas, amusement parks such as Disneyland and John Wayne Airport.

Historically, the county experienced a steady increase in retail, hospitality and tourism employment following the Great Recession. That trajectory changed when the pandemic paralyzed the economy with state and local stay-at-home orders.

From 2019 to 2020, retail employment declined by 14,056 jobs and hospitality and tourism employment dropped by 66,155 jobs, according to the report.

Eleven job categories within the industry accounted for nearly half of O.C.’s job losses from 2019 to 2020 where all have entry-level hourly earnings below the current living wage of $20.63, according to the report.

It also found that Costa Mesa was among the “younger, more racially and ethnically diverse” areas with lower levels of income when compared to the county average that had the highest number of unemployment insurance claims filed by employees of the retail, hospitality and tourism industry.

“We experienced the hurt like everyone else,” said Kelly Miller, president and chief executive of Visit Huntington Beach, the local tourism bureau.

Before the pandemic, Miller said the tourism industry in Huntington Beach represented about three quarters of a billion dollars of total economic impact, roughly about $730 million. But when restrictions started rolling out, the average daily rate of visitations dropped, barely logging single digits on hotel occupancy, he added.

In Newport Beach, hotel cancellations came “fast and furious,” in 2020, said Sherwin, who’s been in the industry for 30 years. Hotel occupancy of about 83% dropped to 5% within a two-week period in March 2020, he said. By April of that year, layoffs had already taken place. Hotels that once employed hundreds were down to about five people.

“It was stunning,” he said. “It’s something we had never seen before.”

By 2021, the Golden State launched its campaign “Calling All Californians” to encourage interstate travel to help jump-start the economy after shutting down hotels and tourist attractions for more than a year. Surf City followed suit, highlighting its abundant open space for fun activities and noticed how the shift resonated with people.

“Our average daily rate surpassed pre-COVID numbers,” Miller said. “Occupancy is still down — up to 20% — but the willingness of people to stay in a safe and clean hotel environment was an uptick. People were willing to pay to have that confidence and assurance that Huntington Beach hotels take safety seriously.”

Newport Beach also started ramping up marketing this spring and Sherwin said they experienced a “robust” summer.

The emergence of the new variant of the coronavirus behind the pandemic has complicated things, but Miller and Sherwin both agree labor shortage is the next big concern. As of July 2021, the report found data showing over 2.9 million jobs openings nationally within the industry from the U.S. Bureau of Labor Statistics.

“We’ll have to live with this and find ways to adapt,” Sherwin said. “Initially they thought the industry wouldn’t recover until 2025 but I tend to be more bullish on that. I think, depending on the Omicron variant and whether we have another outbreak, there’s a reasonable chance of seeing recovery by next year and I think we’ll be back 2023.”

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