Maine hotels, restaurants and bars will lose $1 billion in direct taxable revenue in 2020 compared to last year as the coronavirus pandemic ends 12 consecutive years of growth, according to an industry report released Monday.
The hospitality industry is expected to contribute roughly $3 billion in direct taxable revenue to the Maine economy, down about 30 percent from $4 billion last year, according to the University of Maine study commissioned by the industry group HospitalityMaine.
HospitalityMaine CEO Steve Hewins said the industry has a big hole to dig out of, but his group remained optimistic about the long-term prospects of the state’s second-largest private sector.
“It is going to take time, but we will rebound because Maine has latent strength in its people, and as a destination and a place to live, we have equally strong attributes,” he said.
The 2020 analysis by University of Maine economists Todd Gabe and Andrew Crawley forecasted that revenues including multiplier effects for industries benefiting from the hospitality sector will be $5.2 billion, down $1.7 billion from 2019. The industry will provide 51,000 full- and part-time jobs, a loss of more than 28,000 from 2019. This new information ends a string of 12 straight years of record growth.
Last year the Maine hospitality sector, which includes hotels and motels, restaurants, and bars, contributed $6.9 billion to the state’s economy, including multiplier effects. It also provided 79,000 full- and part-time jobs, about one in 10 jobs in the state and 17 percent of taxable retail sales.
When HospitalityMaine released its first industry report last October, the sector was facing a workforce shortage because it was doing so well. This year it is facing a workforce shortage because hotel and restaurant managers say employees are afraid to return to work for fear of catching the virus or because they need to homeschool children.
An updated UMaine report in June 2020 after the virus took hold in Maine and Gov. Janet Mills began imposing restrictions on businesses and individuals, reflected a much different situation than the October report before the pandemic.
Hospitality sales in the state fell by 35 percent between March of 2019 and 2020 and by 63 percent between April of 2019 and 2020. That earlier report predicted the Maine hospitality sector, with multiplier effects, would generate $4.6 billion in revenue. The report released Monday revised that estimate much further downward.
In July, a national hotel association report predicted the state would lose nearly half of its lodging tax revenues this year amounting to $65.9 million less taxes. While summer tax revenues were higher month-to-month for both restaurants and hotels after the governor relaxed virus restrictions, they are still down significantly from last year. Hewins expects more of a falloff until the end of the year.
Restaurants paid $253.6 million in tax revenues in July, up from $188.1 million in June but still 30 percent below the $361.5 million they paid in July 2019, according to new Maine Revenue Services data released last week. Hotels paid $146.5 million in tax revenues in July, more than double the $58.3 million in June, but far less than the $244.3 million in July 2019.