Sam Sacco is a senior business and economics lecturer at Salve Regina University. Sacco’s students, in partnership with the Rhode Island Hospitality Association, recently released a data-driven study showing that the statewide hospitality industry suffered a projected $114 million loss in revenue during the first 12 months of the partial closure of the Washington Bridge. Sacco spoke with Providence Business News about the study and its findings.
PBN: What was the impetus for creating this study? Did the hospitality association or local businesses connect with you on this topic?
SACCO: Salve Regina University emphasizes experiential learning. To actively support this academic focus, the business and economics department has conducted several economic research studies that have underscored and strengthened our community partnerships throughout Rhode Island. The recent Washington Bridge closure study was our third project for the hospitality association, at their request.
The Washington Bridge closure represented a significant regional event that affected several towns, cities, citizens and local businesses. Given the hospitality association’s advocacy for the lodging, restaurant and tourism industries, estimating the impact on local businesses within the Interstate 195 corridor and throughout the state became an important economic question.
Our initial RIHA/Salve study examined the statewide economic impact of the COVID-19 pandemic on the hospitality and tourism industries. A subsequent study studied the degree of statewide economic recovery post-COVID.
PBN: What was the most striking data you feel stands out among the data results in this study?
SACCO: The students and I were very curious as to what we would discover and began the study without any preconceived opinions. That made the project both exciting to tackle and a real-life challenge. Once the data were examined at a local level, a few findings became apparent and were unknown to us.
First, not all towns and counties were negatively affected. As consumer spending and travel patterns shifted to accommodate the bridge restrictions, certain towns and counties benefited from [an] increased “stay local” attitude. Bristol County is an example of this shift.
Second, Rhode Islanders are resilient and adjusted relatively quickly to the bridge closure. Within a couple of months, I-195 traffic volumes near the Washington Bridge had recovered to 90% of normal levels.
PBN: H
ow concerning is the bridge situation for the hospitality industry, especially after some businesses are still reeling and recovering from the COVID-19 pandemic?
SACCO: Rhode Island’s hospitality industry and related activities are major economic drivers. It contributes significant tax revenue through the meals and beverage tax and thousands of direct full-time and part-time job opportunities. In addition, hospitality industry activities create demand for supporting business activities that also contribute to Rhode Island's overall economic health.
The Washington Bridge closure, ongoing travel restrictions, pending demolition and reconstruction warrant continued attention by all involved parties to mitigate impacts to local businesses, but current economic activity has moderated from the decrease experienced during the first few months. There has been a geographic shift in hospitality spending patterns as commuting and travel patterns have adjusted to the Washington Bridge situation. Some areas have witnessed increased local hospitality business activity while others have shown decreased activity because of the revised routes.
PBN: While the state has provided some grant support for some small businesses impacted by the closure, do you feel this study argues that the state needs to provide impacted businesses more direct funding to help financially recover from the closure?
SACCO: The Salve Regina University/RIHA study was intended to research changes in overall economic activity related to hospitality spending in a comparative manner. The data were adjusted to account for inflation and examine levels of hospitality-related business activity by town, city, county and statewide for annual periods prior to the Washington Bridge closure and post-closure.
Our objective was to estimate economic impacts by spending levels and geographic areas. The report, hopefully, provides a foundation for continued discussion by all responsible private and public entities. It was not intended to offer policy recommendations.
PBN: Do you plan to bring this study to the state’s attention? If so, when?
SACCO: [Gov. Daniel J. McKee’s] office has seen the study. The report was shared with them at their request this week.
James Bessette is the PBN special projects editor, and also covers the nonprofit and education sectors. You may reach him at Bessette@PBN.com. You may also follow him on X at @James_Bessette.
