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October 6, 2020

Maine hospitality industry's lost revenue projected to be $1.7B

Photo / Peter Van Allen Maine's hospitality industry usually gets a boost from a steady stream of cruise ship visits. But the pandemic forced the cancellation of most visits this year. Overall, the crisis will cost the hospitality industry $1.7 billion, according to a new estimate.

Maine's hospitality industry was expected to take a big hit from COVID-19, and a new report has estimated the impact.

Industry revenues are projected to be $1.7 billion less as a result of the pandemic, with a loss of 28,000 direct and multiplier jobs, according to a report released Tuesday.

The losses come after 12 years of steady growth in the state's second-largest industry, after health care.

A man smiling with his arms crossed
Photo / Maureen Milliken
Steve Hewins, CEO and president, HospitalityMaine

Between January and July, Maine hospitality businesses generated $1.5 billion in taxable sales, a 34% drop from the $2.3 billion in the first seven months of 2019, according to an analysis by economics professors Todd Gabe and Andrew Crawley of the University of Maine and commissioned by HospitalityMaine.

It's a "big hole to dig out of," said HospitalityMaine CEO Steve Hewins. But Hewins also said he's optimistic about long-term prospects as the industry slowly improves, the numbers climbing since April's low point.

“The resiliency and innovation the industry is known for will be tested like never before,” Hewins said. "It is going to take time, but we will rebound because Maine has latent strength in its people, and as a destination and a place to live, we have equally strong attributes." 

The report projected that the Maine hospitality industry will generate a 2020 statewide economic contribution — including multiplier effects — of an estimated $5.2 billion in revenue, 51,033 full- and part-time jobs, and $1.8 billion in wages.

The estimate has some wiggle room to be a little better or a little worse, Gabe and Crawley said. Annual receipts for all of 2020 will likely fall within a range of $2.7 billion to $3.3 billion — the report's projections are based on the $3 billion mid-point.

"The high end of this range is based on a continuation of the upward trend from April through July," Gabe and Crawley said. "The bottom end of this range is based on a scenario where the loss in hospitality sales for all of 2020 is a little more severe than the 34% reduction between January and July."

Slightly upward trend

The report is an update to a June study on the impact of COVID-19 on Maine’s hospitality sector. That study was based on Maine taxable hospitality sales data from January through April. It also comes after a report a year ago that showed the industry generated $6.9 billion in revenue in 2018 and had grown steadily in the past 12 years.

From February to April there was a sharp drop in revenues compared to the same period the year before, as the state shut down most businesses to slow the spread of the COVID-19 pandemic. After April, the numbers trend back up, but are still much lower than the 2019 numbers.

Some of the takeaways:

  • Overall, the industry in 2020 is projected to provide 51,033 full and part time jobs — 36,174 direct jobs and 14,859 multiplier jobs — a loss of more than 28,000 from 2019. 
  • In March, taxable sales at restaurants and lodging establishments decreased by 35% compared to March 2019.
  • In April, taxable sales at restaurants and lodging establishments decreased by 62% compared to April 2019.
  • As of July, Maine hospitality sales were 34% lower compared to July 2019.
  • Lodging sales in April were down 80% compared to April 2019, as the state restricted out-of-state visitor. By July, there was a 40% difference. 
  • Restaurant sales fell by 58% comparing April 2020 to 2019; the July comparison was 30%.

HospitalityMaine 'will be a leader'

Hewins said that, going forward, HospitalityMaine, plans to be a leader in helping to turn the industry back around.

The organization, which represents more than 1,000 members in the restaurant and lodging industry has partnered in the past months on free online training for hospitality workers in each sector to help conform with state COVID-19 checklists.

It also was part of a group that released an $800 million plan, offered to the state, to help get the industry back on its feet.

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