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Tourism, engine for New York City economy, may not fully recover until 2025

NEW YORK (NYTIMES) – Double-decker sightseeing buses carried fewer than 10 passengers on runs around Manhattan on Monday (Nov 16). Big ferries arrived at the Statue of Liberty with their lower decks nearly empty. Some of the city’s largest hotels had few guests, while others were housing homeless men who had been cleared out of shelters to curb the spread of the virus.

The pandemic triggered a free-fall in tourism to New York City, one of the world’s most popular destinations. A new forecast predicts that the influx of tourists will not fully rebound for at least four years, a sombre assessment that reflects one of the biggest challenges to the city’s recovery.

The surge in tourism in recent years has been a vital pillar of the city’s economy, supporting hundreds of thousands of workers across a range of industries, from hotels to restaurants to Broadway.

New York drew a record 66.6 million visitors in 2019 and was on pace for even more this year, according to the forecast released on Monday by the city’s tourism promotion agency, NYC & Co. Now the city is likely to reach just one-third of last year’s total.

The collapse of tourism has been a key reason that New York’s economy has been hit harder than most other major US cities. Hundreds of restaurants, many of which rely on out-of-town visitors, and several large hotels have closed for good. Before the shutdown in March, the hospitality industry provided as many as 400,000 jobs and drew US$46 billion (S$62 billion) in annual spending.

Seven months later, at the end of October, more than 1.3 million residents were collecting unemployment benefits. The city’s unemployment rate is 14.1 per cent, more than double the national rate.

The challenge of luring visitors back to New York in significant numbers could become even greater with the virus surging again. The number of daily cases in the city has surpassed 1,000 for the first time since the spring.

Even when the pandemic ends, the return of international visitors, who stay longer and spend much more than domestic visitors, is likely to be sluggish. The number of foreign tourists in the city is not likely to reach its 2019 level before 2025, the forecast shows.

“It’s going to be a very slow build initially,” said Fred Dixon, chief executive of NYC & Co.

The revival depends on the distribution of an effective vaccine, Dixon said, which public health officials have said is not likely to happen until late spring or early summer. Until then, the flow of visitors will remain at a trickle, he said, auguring a difficult winter for many businesses.

The loss of tourism has been especially acute for less-educated workers, said James A. Parrott, director of economic and fiscal policy at the Center for New York Affairs. The hospitality industry added 130,000 jobs in 10 years before the pandemic, making it the largest employer of less-educated workers in the city, he said.

“The tourism boom in recent years meant that thousands of New Yorkers without a college degree saw substantial real pay increases,” he said.

The predicted slow recovery “means New York City is likely to go without tens of thousands of jobs in hotels and restaurants that, before the pandemic, were providing steadily rising wages to New Yorkers without a college degree, 80% of whom are workers of colour,” Parrott added.

Leisure and business travel skidded to a standstill in mid-March and has been on hold since then. NYC & Co. estimates that 12 million people visited the city this year before the shutdown, but the total in the ensuing nine months may only reach 10 million, a figure that includes all of the nurses and other essential workers who arrived in response to the coronavirus crisis.

More than 60 hotels have become temporary homes to roughly 9,500 homeless people who were moved out of crowded shelters to prevent the spread of the virus. The US$120 a night per room the city pays hotels that have taken in homeless people has provided badly needed financial relief, though in certain neighborhoods the policy has been a source of contention.

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The disappearance of visitors has ravaged businesses like TopView Sightseeing, which organises bus tours of the city. Overall business has dropped more than 90% since before March, said Jonathan Hengal, senior director of sales and operations.

Before the pandemic, tours would hold more than 80 people – often reaching full capacity at 89. Now, 35 people might show up on the most crowded weekend days, while on a Monday afternoon numbers could fall below 10, Hengal said.

“It’s been devastating,” he said. “And we don’t know where this is going. Everything’s been incredibly uncertain.” Statue Cruises, which ferries tourists to Liberty Island, has been carrying 8 per cent to 15 per cent of its pre-pandemic loads on weekdays, said Rafael Abreu, the company’s director of sales and marketing.

“It’s much worse than 9/11 or Hurricane Sandy,” Abreu said.

Still, there were some tourists to be found on Monday.

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At Duffy Square at the northern edge of Times Square, Siria Hidalgo was taking photos with her boyfriend, Luis Miranda, 32. The couple had arrived in New York on Sunday from Puebla, Mexico. Hidalgo, 33, said the combination of low airfares and pleasant late autumn weather lured them to the city.

“We’re taking all the precautions, and we’re trying to be as safe as we can,” she said. “But once the weather gets colder and if things get even worse, it’s going to be even harder to travel. So we wanted to still come while we can.”

NYC & Co. counts all overnight guests and anybody who travels from more than 50 miles away as a visitor. After the shutdown, the agency abandoned its forecast for this year and beyond. Its new forecast calls for 38.2 million visitors in 2021, rising to 69 million by 2024.

But fewer than 5 million of those projected 2021 visitors will come from outside the country, the forecast predicts. And by 2024, that number will still not have returned to the 13.5 million international visitors the agency counted in 2018 and 2019.

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