News for the Hospitality Executive
|by Jim Clark
Recently, economist Gary Horvath of Broomfield-based Business and Economic Research released a Colorado Economic Analysis and Outlook for the first six months of 2011.
As we know, Colorado is faring better in employment than the rest of the nation, but we are not immune to slow job growth that is plaguing the nation.
According to Horvath, Colorado jobless claims are trending downward, but the unemployment rate remains high and the job situation in our state is weak.
As you might imagine, some sectors of the economy are performing better than others. Losing the most jobs are construction, finance, federal government (Census jobs) and information technology.
Leading the way in job growth for the last two quarters are, in order, tourism, health and private education, mining and employment services. This also parallels the national picture with tourism industry employment currently the fastest growing sector of the economy.
Why, you may ask? There are a number of factors. First, the tourism and travel industry took a major hit in 2008 and 2009.
Businesses often look to travel expenses as a cost saving measure. As a general rule, travel freezes last for several months to a year, and then begin to disappear.
Taking sales people off the road may save a few dollars up front but has revenue implications down the road.
The same applies to training and professional education. Some short-term financial savings realized by cancelling or cutting travel expenses can bite a business back by the loss of touch with markets, technology, industry trends and other opportunities.
The negative publicity associated with the "AIG Effect" resulted in massive cancellations of meetings in resort destinations and destinations like Las Vegas and Orlando. Now resorts have seen meetings return, and jobs come along with those meetings.
A strong ski season in 2010-11 and abundant snowfall helped, too. Higher gas prices seem to have had limited effect on auto travel to Colorado and may have even helped our state.
Colorado was one of the few states to hold steady in terms of overall visitors during the recession, even though spending was lighter.
This is good news for Colorado and our region. Increases in travel result in healthier sales tax collections for our state and local governments.
Seasonal tourism jobs help keep young people off the street in summer and provide income for students to continue their education. And, they can provide a second income in tough economic times like we face now.
At some point, other sectors will surpass tourism in job
growth. But for now, tourism is helping keep Colorado working.