NW Oregon Tourism Revenue Forecast For 2021: $1.46 Billion

Tourism Revenue: A total of $1.46 billion was spent by tourists in Northwest Oregon in 2021. After adjusting for inflation, this was a gain of 46.4% from 2020 levels. After the global economic crisis hit and firms were forced to close in March of 2020, tourism spending fell by 42% that year.

NW Oregon Tourism Revenue Forecast For 2021: $1.46 Billion

While the increase in expenditures in 2021 was the biggest seen in the available data, it was still lower than 2019’s total expenditures of $1.73 billion. Since 2011, the average annual growth in visitor expenditure has been around 3%. Expenditure declines had occurred before in the region, such as during the Great Recession, but nothing like the fall of 2020.

Prior to the global recession, the leisure and hospitality industry in Northwest Oregon was the largest employer in the region. However, in 2020 and 2021, this industry was only marginally smaller than the trade, transportation, and utility sector.

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The leisure and hospitality industry averaged 14,906 payroll positions in 2021. Including Benton, Clatsop, Columbia, Lincoln, and Tillamook counties, this accounted for almost 16% of all non-self-employed positions. The hospitality industry (including hotels, resorts, and campers) and the food service and drinking establishments industry make up the bulk of this market (e.g. restaurants and bars). Visitor expenditure is crucial to the industry’s success.

The retail sector, the transportation industry, and even the healthcare system all benefit from the money that tourists spend while on vacation. However, as tourists only spend a relatively small percentage of their money in these sectors, the leisure and hospitality industry is often used as a stand-in for the tourism sector as a whole.

A total of $1.43 billion (in 2021 dollars) was spent by tourists in 2006, the year before spending declined by 2%. There were dips in spending during the Great Recession and recovery, followed by a steady increase from 2012 until the pandemic struck in 2020.

Customers for hotels and restaurants were cut in half due to travel and occupancy limitations, therefore many firms in the tourism industry either shut down or drastically decreased their services. In 2020, visitors spent only $998 million in the region of Northwest Oregon, a decrease of 42% from the previous year. Only slightly higher than in 1992.

NW Oregon Tourism Revenue Forecast For 2021: $1.46 Billion
NW Oregon Tourism Revenue Forecast For 2021: $1.46 Billion

Visitors’ expenditure in Benton County fell by the second-greatest amount (-57.2%) among all Oregon counties in 2020. A 158% increase in tourist expenditure to a record $148 million in 2021 helped the county recover tremendously.

Students at Oregon State University are likely responsible for both the decline and subsequent recovery; in-person attendance was temporarily halted in 2020 before being reinstated the following year. There was a significant uptick in tourist expenditure in the neighboring counties of Northwest Oregon in 2021, but it was still below the levels before the pandemic.

Jobs in the hotel industry are often directly proportional to the amount of money brought in by tourists. It’s getting better quickly but hasn’t fully recovered yet, with the exception of Benton County. Five counties in Northwest Oregon saw a 54% reduction in employment from March to April 2020.

Since then, employment has increased. The price index in September 2022 was 8.6% higher than in September 2021, although it was still 1.2% lower than in September 2019 โ€” the final year before the worldwide economic collapse.

In 2022, as winter approached, the leisure and hospitality industry in Northwest Oregon began its annual fall in employment. Employment in the industry is expected to return to pre-pandemic levels by the end of next year, and long-term growth in the sector seems promising.

In fact, there is considerable evidence to suggest that the tight labor market, rather than a lack of visitor spending, maybe the primary limitation on employment growth in 2022. Surveys of employers in 2022 found an abundance of job vacancies compared to the number of unemployed.

There is positive anticipation for tourist spending in the future. Northwest Oregon anticipates a 44% increase in leisure and hospitality jobs between 2020 and 2030. The majority of that expansion is predicated on the market returning to its pre-downturn state. Afterward, it’s expected that annual employment growth in the sector will slow to below 1%.

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How the sector reacts to the global recession and the resulting tight labor market remains an important open question. It’s possible that businesses will be more likely to adopt service models, like takeout food delivery, that give them greater leeway to deal with a pandemic.

For those who work in the leisure and hospitality industry, there is no such thing as a relaxing workday.

Regional Economist Erik Knoder works for the Oregon Employment Department. In order to get in touch with him, dial 541-351-5595.

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