Record-low unemployment for American workers and a thriving global economy has led to stunning growth in tourism jobs over the past year. Ironically, the same economic success that’s given rise to a booming tourism industry also means there aren’t enough workers to satisfy the demand.
The Tourism industry depends, and is depended upon, by just about every economic sector one can imagine: travel (which includes energy costs), retail sales, entertainment, restaurants, hotel accommodations, and the list goes on.
Because of the deeply interdependent nature of the tourism industry, it makes for a good barometer of the U.S. employment situation. Right now it’s pointing to a dire labor shortage, which has both positive and problematic economic implications.
Tourism Jobs Aplenty
Lots of American workers depend on the tourism industry for employment, in one way or another.
A quick look at the multiplier effect of the tourism industry—the direct, indirect, and induced contributions to employment—reveals the true magnitude of its importance to our economy. In 2017, the direct impact of travel and tourism on employment, which consists of spending on air travel for leisure purposes, hotels, restaurants, and attractions supported by tourists, generated about 5.3 million jobs—3.4% of total employment. But, when one includes all of the jobs created throughout the supply chain resulting from tourism, that figure jumps to 13.7 million, or 9% of total employment in the U.S., putting it on par with Retail Trade and Healthcare, two of largest Industries by employment in the country.
Based on data collected by ZipRecruiter, the number of tourism jobs increased both nationwide and in nearly every major metro area in the U.S. so far this year. Tourism jobs are up 36% year-to-date in New York City, for instance. Over the same period, tourism job opportunities spiked 46% in Los Angeles, 37% in San Francisco, and 52% in Washington D.C.
But are there enough workers to fill them?
The Looming Labor Shortage
Although major economies like San Francisco and New York are adding tourism jobs at a steady clip, ZipRecruiter data shows the number of employees to fill those positions is in decline. New York is a prime example. While tourism jobs in the Big Apple soared over the past year, the number of applicants seeking those jobs was cut in half.
It’s a similar story in nearly every metro we studied, providing compelling evidence of a tightening labor market. As headline unemployment continues to drop, a lack of labor supply has become problematic for just about every industry. But tourism businesses are hit especially hard since demand for leisure and hospitality services increases as a result of more people being employed.
But the big cities are still doing relatively okay thanks to their large and diverse populations. Looking at the ZipRecruiter Opportunity Index, which compares the current number of open jobs to the number of job seekers, there are about six applicants competing for each open tourism job in New York City, for example.
It’s in the rural areas of the U.S., many of which have communities that depend on tourism for the lion’s share of their revenue, where the labor shortage has already hit hard. In Upstate New York, just a few hours from the city, there are nine tourism job openings for every one applicant. The same is true in the rural vacation destinations of Colorado, Washington State, and Utah, where the number of available tourism jobs far outpaces the labor supply.
The Ups and Downs in the Aviation Industry
Between increasing business activity in the U.S., along with the tremendous spike in demand for leisure and hospitality, aviation employers have been hit especially hard, although there are signs of improvement when it comes to the shortage among Airline Pilots.
In 2017, Pilot job openings increased 363% while the applicant pool for those jobs shrunk by 30%, according to ZipRecruiter data. This troubling trend of growing demand for skilled pilots combined with the yawning labor shortage continued throughout most of 2018. By August of 2018, in fact, the Pilot shortage widened to the point that there were six job openings per applicant.
But the tide has appeared to turn as we approach the end of the year. Pilot job openings have continued to increase, up 75% year-to-date through November. But the applicant pool has increased as well, up 27% over the same period.
According to the ZipRecruiter Opportunity Index, which compares the number of job openings to applicants, the industry has gone from about six jobs for each applicant in August to just over one job per applicant as of November. This ratio is still indicative of a tight job market for Airline Pilots, but a vast improvement nonetheless.
The Aviation industry as a whole has not fared so well this year. Among all of the job titles within the Aviation industry combined, from Aircraft Technicians to Counter Agents, jobs continue to increase while applicants decline. Overall, Aviation jobs are up 39% year-to-date in 2018, while applicants have declined 16%.
What’s To Be Done?
In one respect, this is good news for American workers. Although the Leisure and Hospitality industry accounts for a large percentage of the American workforce, it is also one of the lowest paying. The labor shortage in the industry is indicative of the fact that more people are finding better paying, steadier work elsewhere.
But given the multiplier effect of the industry, we need tourism business owners to be able to meet demand so higher paid workers who indirectly benefit from a strong tourism industry (airline pilots for example) can keep their well-paying jobs.
Thankfully Congress has already responded by increasing funding for about 100,000 more H-2B visas, which allow foreign-born workers to fill temporary service jobs. So far the Department of Homeland Security has issued about 15,000 of additional visas, which have already been gobbled up by employers. The funding exists for thousands more to be released, which would satisfy many in the industry who crying out for them.
Another option is for employers is to offer higher wages to entice more local applicants. Sometimes that’s easier said than done, especially for small businesses. But at the current levels of demand and the labor shortage such as it is, they may have no other choice.