Like the virus and its far-reaching effects, telling the story of the pandemic has been unprecedented. On social media, we receive and react to snapshots and momentary flashes, some of which are designed to evoke a visceral reaction rather than a reasonable viewpoint. So it is refreshing to find an academic study of pandemic effects on the economy that covers a more substantial period of time. The study conducted by a Salve Regina University economics class was commissioned by the Rhode Island Hospitality Association on the impact of COVID-19 on tourism and hospitality. It is revealing, as well as comprehensive.
While the headline is, “Rhode Island’s hospitality industry was one of the hardest-hit industries in the state during the COVID-19 pandemic,” Dale J. Venturini, CEO and president of the hospitality association, notes a significant point: The study examines the financial impact to the third-largest industry in Rhode Island. In doing so, it reinforces just how vital the industry is.
The study was completed by Salve students in the “Introduction to Econometrics” class taught by business professor Samuel Sacco. It was facilitated by Stacey Carter, strategic partnership officer at Salve, and Melissa Varao, chairwoman of Salve’s Department of Business and Economics. It encompassed a six-month period, beginning in January 2020, and measures the statewide effects across each of the industry’s four sectors, including food and beverage, events and meetings, lodging, and tourism and attractions. The researchers calculated the direct, indirect and induced monetary effects of the pandemic in all five counties in Rhode Island.
Sarah Bratko, the hospitality association’s senior vice president of advocacy and general counsel, noted that the study began prior to the pandemic shutdown. Restaurant business in the state was already down, as has been shown in other industry studies.
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A BRIGHT SPOT: “Al Fresco on the Hill” outdoor dining along Atwells Avenue in Providence has proved to be popular during the warmer months of the COVID-19 pandemic. / COURTESY FEDERAL HILL COMMERCE ASSOCIATION[/caption]
Some areas of the hospitality sector were hit harder than others in those six months studied by the students. Lodging, meetings and events, and tourism and attractions had decreases in revenue typically ranging between 40% and 60%. However, food services demonstrated a more moderate impact, with declines in revenue ranging from 5% to 25%.
“The students identified closely with this study,” Sacco said. “They’ve experienced the impacts of the COVID pandemic, as it has affected their college routines, personal lives and, in many cases, part-time employment income. The class found it interesting to correlate quantitative impacts of COVID to their own life experiences. I’m proud of their efforts to produce a quality economic impact study in an uncertain learning environment.”
Sacco’s statement is revealing in that it may be taken to unintentionally reflect the societal perception that the food service industry is a step along the way to a “real” career in other industries. This perception may have actually stood in the way of hospitality’s recovery. In other sectors, economic setbacks would be responded to by consolidations, diversifications, spinoffs and replacement of executives, as well as other moves to prop up share prices. With 90% of the nation’s restaurants independently owned – near 93% in Rhode Island – such a monolithic approach is not feasible.
In previous years, Sacco’s Introduction to Econometrics classes have completed economic impact studies for Newport’s famed Cliff Walk, the Naval Undersea Warfare Center Division Newport, Salve Regina and The Vietnam Veterans Memorial Wall in Fall River’s Bicentennial Park. It should be noted that the state’s food service industry is in some select company. This should give us all food for thought.
Bruce Newbury’s radio show and podcast, “Dining Out with Bruce Newbury,” is broadcast on WADK 1540 AM and several radio stations throughout New England. Email him at Bruce@BruceNewbury.com.
