Overview of Tourism and Hospitality Industries in

the US Microeconomy With a Background

Summary on COVID-19

By Yidong Zhang
 Interesting stats since 2019 to take into
consideration before blaming the global epidemic
for all the economic losses in this world!!!
Despite the viral spread of coronavirus coming from Wuhan
in China prior to Tuesday 31st of December 2019, this
simultaneously benefited the American economy by
investing in:

● $2.6 trillion spent on travel alone

● 15.8 million jobs on offer
● 2.9% GDP
 So what did the government do?

● Government responses to COVID-19 greatly affecting economic activities in

the US
● It includes lockdown period, monetary policy, travel restrictions significantly
impacting stock prices and stock market indices
● 20%-30% increase in unemployment rate within hospitality industry in labour
market
● SHOCKED reactions from 15 industries, including utilities, services,
restaurants, hotels, motels .etc., upon hearing first confirmed COVID case in
California on Wednesday 26th of February 2020
 BREAKING NEWS FROM 2020!!!

● 51.2% loss in hotel room revenue with 546,000

citizens losing their jobs
● 72% of hotel rooms across America in recession and
depression
● This resulted in some hotels having no more than
than 35% occupancy rate while others reported less
than 20%
● -29.67% negative cumulative abnormal returns in
US
In other words…
Income Elasticities of Demand
 Travel and agriculture income in COVID lockdown

● $51.5 billion lost in income from tourism industries

● -1.4% annual hotel occupancy rates commencing Saturday 13 th of March 2021
● Travel and tourism industries INCOME ELASTIC
● However, agricultural income didn’t decrease as much, since sales volume in
grocery stores significantly increased as COVID actually encouraged more
Americans (about half the population) and 35% of Canadians to spend on more
meals away from home by the dollar, despite many shops and supermarkets
being left eventually empty as a result, causing such industries to become
more INCOME INELASTIC
● This is in line with United Nations sustainability development goals 1 (no
poverty), 2 (zero hunger) and 3 (good health and well-being) in the sense that
these economics impacts did NOT cause any citizens to suffer from hunger or
poverty
Here comes the good news…
● US hotel occupancy rates rising to 52% in 2021
and 61% in 2022 after dropping down from 66%
2018-19
● 11% ($731.5 billion) of US economy yet to invest
in restaurant sales by 2021 following from $864.3
billion in 2019
● $100 billion invested in offering COVID-19 aid
provided by Trump Wednesday 18th of March
2020
Swiftly moving onto housing markets (Olick, D.
2021)
● Mortgage interest rates rising from 3.16% to 3.2% for fixed contracts of up to 30 years
with loans worth $548,250
● Mortgage application volume dropped from 2.8% throughout the past few weeks
● Refinance mortgage fell from 63.5% to 62.9%
● Mortgage applications from home buyers significantly increasing (National Association
of Home Builders, 2021)
● Higher housing demands and sales
● Overall mortgage rates recently raising by 1.7% (Cox, J. 2021)
● This greatly exceeded economists’ expectations of 1.4% increase in interest rates
following from 0.8% on October
 Links and references
Aharan, D. Y. Jacobi, A. Cohen, E. Tzur, J. Qadan, M. (2021) ‘COVID-19, government measures and hospitality
industry performance’, Plos One, 16(8)
American Hotel and Lodging Association (2020) New Data: Most of the Hotel Industry In Recession or Depression,
Retrieved: Monday 1st of November 2021 <https://www.ahla.com/sites/default/files/recessiondepression_0.pdf>
Clark, J. Mauck, N. Pruitt, S. W. (2021) ‘The Financial Impact of COVID-19: Evidence from an Event Study of Global
Hospitality Firms’, Research in International Business and Finance, 58
Cox, J. (2021) ‘Retail sales rise faster than expected in October even as inflation pushes prices higher’, CNBC. 16
Nov
Elflein, J. (2021) Coronavirus (COVID-19) in the U.S. - Statistics & Facts, Retrieved: Thursday 25th of November 2021
<https://www.statista.com/topics/6084/coronavirus-covid-19-in-the-us/#topicHeader__wrapper>
Goodell, J. W. Huynh, T. L. D. (2020) ‘Did Congress trade ahead? Considering the reaction of US industries to
COVID-19’, Finance Research Letters, 10(1016)
Dzhanova, Y. Pramuk, J. (2020) ‘President Trump signs coronavirus relief plan to expand paid leave’, CNBC. 18 March
Hotel Tech Report (2021) 58 Tourism Industry Statistics Showing COVID-19's Impact, Retrieved: Wednesday 3rd
of November 2021 <https://hoteltechreport.com/news/tourism-industry-statistics#hotels>
Huang, A. Madridistas, C. Baker, M. Medeiros, M. Guo, Z. (2020) ‘Understanding the impact of COVID-19
intervention policies on the hospitality labor market’, International Journal of Hospitality Management, 91
Olick, D. (2021) ‘Mortgage refinance demand continues its free fall, as interest rates rise again’, CNBC. 17 Nov
Ozili, P. K. Arum, T. (2021) ‘Spillover of COVID-19: Impact on the Global Economy’, SSRN, 10(2139)
US Travel Association (2020) Travel Facts and Figures, Retrieved: Tuesday 2nd of November 2021 <https://
www.ustravel.org/research/travel-facts-and-figures>
Weersink, A. Massow, M. V. (2021) ‘COVID-19 and the agri-food system in the United States and Canada’, Agricultural Systems,
188, pp. 2