NYC tourism plummeted in 2020 thanks to COVID, report says
New York City tourists dropped by more than 43 million visitors in 2020, costing businesses as much as two-thirds of their total tourism revenue as government restrictions during the COVID-19 pandemic changed consumer travel habits, according to a new report.
The report from state Comptroller Thomas DiNapoli found the city lost as much as $60 billion in economic impact due to tourism in 2020, when it was an estimated $20.2 billion compared to 2019’s $80.3 billion.
While the overall unemployment rate in the city rose to 20% in May and gradually declined to 12% by December, DiNapoli said the tourism industry lost a third of its jobs, or 89,000 jobs, due to the pandemic, losses in revenue and government-mandated restrictions.
“The Office of the State Comptroller estimates the drop in spending cost the city $1.2 billion in lost tax revenues,” the report reads.
While New York City visitors accounted for a quarter of the total tourists visiting the state in 2019, visitor spending in the city accounted for nearly two thirds (64.4%) of all tourist spending in the state.
DiNapoli’s office estimates tourism spending is unlikely to reach pre-pandemic levels before 2025. And that employment within the industry will not fully recover before visitor spending recovers.
According to the NYC Hospitality Alliance trade group, about 92% of all restaurants in the city could not afford rent in December. The alliance said eating and drinking establishments in the city, which were subject to strict capacity limitations and prevented from having indoor dining for part of the year, shed over 140,000 jobs in 2020.
DiNapoli approximated half of all tourism spending in New York City — $47.9 billion in 2019 — is spent in lodging, and food and beverage, while the balance is spent in arts and entertainment, transportation, retail and miscellaneous industries.
According to the state Department of Labor, the largest subsectors of the tourism industry — hotels, restaurants and air travel — were the largest sectors with overall employment declines in 2020.
However, these industries began to show positive signs of recovery in March when private sector jobs were added to the leisure and hospitality industry for the first time in 13 months.
International travel dwindles
Despite international travelers amounting to a lower total visitors to New York City, international travelers spend three times more than domestic tourists in the Big Apple, according to the report
DiNapoli said that historically, most visitors to New York City have come from the United Kingdom. But Chinese tourists have been the highest spenders in the city at $3,008 on average per visitor.
The comptroller reported that while national air travel declined by 96% by the middle of April 2020 and began to climb nationally in the spring and summer, New York City’s air travel volume was 10 percentage points lower than the national average in August and February 2021.
The number of international travelers to New York City declined from 13.5 million in 2019 to 2.4 million in 2020, while the overall spending declined from $23.1 billion to an estimated $4.7 billion.
“Among the five boroughs, Queens had the highest share of its gross product driven by tourism (7.2 percent), as both JFK and LaGuardia airports are located there,” DiNapoli reported.
DiNapoli said the city must address the reality and perceptions of increased crime and homelessness across boroughs to fully address an economic recovery to the tourism industry.
The comptroller recommended city officials build an infrastructure that not only addresses rising crime, but also moves the industry towards flexible adherence to health and safety guidelines due to the pandemic.
Mario Marroquin covers real estate and economic development. Click here to see his latest stories. He can be reached at [email protected] or @mars3vega