Jobless claims jump as tourism faces long recovery

While tourism numbers show expected improvements during the coming year, experts say it may be 2024 before normalcy returns to the hospitality and leisure industries.

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  • | 3:30 p.m. January 30, 2021
Photo by Jesse Kunerth on Adobe Stock
Photo by Jesse Kunerth on Adobe Stock
  • Palm Coast Observer
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With first-time unemployment claims spiking last week, a top Florida economist is cautioning that the vital, but battered, tourism industry is in for another difficult spring because of COVID-19.

Amy Baker, coordinator of the Legislature’s Office of Economic & Demographic Research, told lawmakers Jan. 27 that despite improved tax-revenue numbers for December, big-spending foreign tourists aren’t expected to flock to Florida in the coming months because of the pandemic.

“It's possible we're going to see a greater negative impact coming from this quarter, but not necessarily a worsening of conditions,” Baker said, referring to the January-through-March period that typically ends with an influx of spring breakers. “But we're going to have lost the big volume of people that usually help us.”

The state has seen an uptick in people driving to Florida, which has been a goal of Visit Florida, the state’s tourism-marketing arm. But Baker said on average those tourists don’t spend the same amount of time or money as foreign travelers and others who fly into Florida. 

And Baker said during an appearance before the House Tourism, Infrastructure & Energy Subcommittee that while tourism numbers show expected improvements during the coming year, it may not be until 2024 before normalcy returns to the hospitality and leisure industries that have suffered the most from the pandemic.

“So, 2021 will still be low. By the time we hit 2022, you can see we have pretty sharp growth,” Baker said. “From that point forward, we think it'll be more slow recovery, but that we should be approaching normal enough to say that we've recovered by 2024. So, that's our current expectation.”

Baker’s comments came before the U.S. Department of Labor on Thursday released a report that estimated 57,824 first-time unemployment claims were filed last week in Florida, up 18,598 from the week that ended Jan. 16.

The federal agency, highlighting recent layoffs in construction and manufacturing industries in Florida, initially estimated 26,559 first-time claims were filed during the week that ended Jan. 16, but it bumped up the number Thursday to 39,226.

The state had been averaging just under 28,000 new claims a week since mid-November, according to the agency.

Last week, the Florida Department of Economic Opportunity said the state’s jobless rate improved from 6.3 percent in November to 6.1 percent in December. That reflected 614,000 Floridians qualifying as being out of work in December from a workforce of more than 10.14 million.

The recent unemployment estimates are far below the peak of the pandemic, when business ground to a halt and nearly 940,000 claims came in the weeks ending April 18 and April 25. During last year’s second quarter, travelers to Florida fell 60.3 percent from the same period in 2019, ending a nine-year run of year-after-year increases in tourism numbers.

The tally of tourists grew in 2020’s third quarter --- July through September --- as Gov. Ron DeSantis pushed to reopen the economy, but the overall estimate was still down 31.8 percent from the same period in 2019.

Baker said questions remain about the future of business travel as companies reacting to the pandemic continue to use remote working and communications technology instead of in-person meetings.

Preliminary fourth quarter tourism numbers have not been released.

Florida’s overall tax revenues have shown some positive signs in recent months.

Baker’s office on Tuesday reported the state brought in about $336.7 million more in general revenue in December than had been forecast in August. The $2.999.4 billion in overall revenue collected was also $154.4 million higher than what had been forecast before the pandemic hit. 


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