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Hotels and Lodging
 

National Industry at a Glance

Hotels and other lodging are homes away from home for business travelers and vacationers, offering both temporary lodging and relief from housekeeping chores back home. In attending to guests and guestrooms, hotels and other lodging places in the United States employ 1.8 million workers, most of them either preparing and serving food or cleaning rooms and otherwise maintaining grounds and premises. More than 45,000 hotels and motels in the United States offer travelers over 3.6 million guestrooms on any given day, ranging from basic lodging in "no frills" budget motels to apartment-size hotel suites. Several hundred "super" hotels can accommodate large conventions and meetings during which attendees rent 500 guestrooms or more each day. Within this continuum are bed and breakfast inns, cabins and cottages, and resorts. In addition to the hotels and motels grouping are the numerous recreational vehicle parks and camp facilities and rooming and boarding houses.

In 1998, the hotel and lodging industry employed about 1.8 million workers nationwide. Among the state leaders in hotel and lodging employment are California, Nevada, and Florida with more than 150,000 hotel and motel workers each. Along with Texas, New York, and New Jersey, these six states together account for more than two-fifths of the industry’s workers.

Small and mid-size lodging places—employing fewer than 50 employees each—are numerically important, constituting seven-eighths of the nation’s 45,000 hotels and motels; establishments of that size, however, have a much smaller share (slightly less than one-fourth) of the hotel and motel employment total.

Guestroom rentals accounted for nearly three-quarters of the $98 billion in total hotel and motel receipts from its customers in 1998. The rest of the total largely came from sales of meals and beverages in hotel restaurants and bars. Room rentals were a much larger share of total receipts in motels and motor inns, many of which lack eating and drinking facilities, than in traditional hotels. In 1998, Seattle was the 24th largest hotel market in the U.S. with 249 hotels and 28,900 rooms (Las Vegas was ranked 1st with 265 hotels and 112,000 rooms).

Figure 1

U.S. Hotel & Lodging Receipts and Pre-tax Profits, 1986-1998
Sources: U.S. Census Bureau; Smith Travel Research

For more detail of above graphic


Current Status

The hotel and lodging industry has undergone a strong recovery in recent years. In 1998, the lodging industry achieved a national occupancy rate of approximately 64.0 percent, with an average daily rate of $78.60, making the sixth consecutive year of strong growth. Industry profitability (pre-tax) soared to beyond the $20 billion threshold, making 1998 the most profitable years in the history of the hotel and lodging industry. The sharp increase in construction activity during the last few years is beginning to bring the supply of rooms more in line with consumer demand. As a result of the new capacity, competitive pricing will be increasingly evident, particularly among mid-market and lower-price lodging segments.

Figure 2

U.S. Hotel Construction Expenditures, 1986-1998 (Billions of 1998 dollars)
Source: U.S. Census Bureau

For more detail of above graphic

 In 1998, 1,500 hotel and lodging establishments consisting of 102,000 rooms employed 28,000 workers statewide in Washington. Of this total employment, 95 percent were in hotels and motels; the remainder was divided among rooming and boarding houses, sporting and recreational camps, RV parks and campgrounds, and organizational hotels and lodging (e.g., campus fraternity and sorority houses). Since 1981, the hotel and lodging industry has added 9,600 employees, with significant employment growth occurring during the late 1980s. Growth in the industry has slowed during the 1990s; thus far, hotel and other lodging has averaged 1.6 percent employment gains each year.


Figure 3

Establishments in Washington Hotels & Other Lodging Places, 1981-1998
Source: Washington Employment Security Department

For more detail of above graphic

Note: Other lodging includes rooming houses, sporting and recreational camps, recreational vehicle parks and camps, organizational hotels and lodging. 

Figure 4

Employment in Washington Hotel & Other Lodging, 1981-1998
Source: Washington Employment Security Department

For more detail of above graphic

Note: Other lodging includes rooming houses, sporting and recreational camps, recreational vehicle parks and camps, organizational hotels and lodging.

Like other tourism and travel industries, hotel and lodging is susceptible to fluctuations in the national economy. In recent years, annual growth in hotel and lodging employment has mirrored closely the overall growth in nonfarm statewide employment. With the exception of 1996, hotel and lodging industry has gone from recession in the early 1980s, recovery and strong growth in the late 1980s, to slower growth in the 1990s.

Figure 5

Annual Change in Washington Total Nonfarm and Hotel & Lodging Employment, 1982-1998
Source: Washington Employment Security Department

For more detail of above graphic

In general, hotel and lodging is a low-wage industry. Average annual covered wages and salaries for hotel and lodging workers was $15,890 in 1998, among the lowest in the state. More than three quarters of the hotel and lodging workers earn less than $10 per hour, compared with the rest of the state where roughly one-third earn less than $10 per hour. With the state unemployment rate at historically low levels and a further hike in the federal minimum wage rate, labor cost pressures will be rising for operators of hotels and lodging facilities.

Table 1

Real Average Wages for Washington Hotel & Other Lodging Workers,
1981-1998 (1998 dollars)
Sources: Washington Employment Security Department,
U.S. Bureau of Economic Analysis
Sector

1981

1983

1985

1987

1989

1991

1993

1995

1997

1998
Hotels & Motels
 

$12,632

$13,120

$13,083

$13,284

$13,068

$13,755

$13,863

$14,197

$15,679

$16,088
Rooming houses
 

$10,726

$10,007

$10,817

$9,781

$9,360

$13,828

$12,583

$13,973

$15,223

$13,784
Sporting & recreational camps
 

$21,979

$11,861

$16,422

$18,722

$14,848

$15,226

$15,763

$12,934

$12,309

$13,291
RV parks & camps
 

$20,456

$11,303

$15,675

$16,234

$14,676

$13,819

$12,312

$12,277

$12,302

$12,670
Organizational hotels & lodging
 

$7,351

$8,428

$6,736

$13,701

$19,355

$14,475

$19,693

$9,708

$10,364

$10,313
Total, Hotels & other lodging
 

$13,031

$13,080

$13,146

$13,421

$13,149

$13,795

$13,995

$14,081

$15,483

$15,890
Total Services
 

$22,525

$21,216

$20,583

$21,493

$21,592

$23,948

$24,908

$26,490

$30,653

$35,244
Total Nonfarm
 

$28,783

$27,789

$27,313

$27,304

$27,167

$27,928

$28,575

$29,046

$31,504

$33,922

Figure 6

Average Hourly Wages of Hotel and Other Lodging Workers in Washington, 1997
Source: Washington Employment Security Department

For more detail of above graphic

The labor force in the hotel and lodging industry is dominated by service workers. Common hotel and lodging occupations within the services group include maids and room cleaners, janitors and maintenance, waiters and waitresses, cooks and food preparation workers, and laundry workers. Common clerical and administrative occupations in hotel and lodging are hotel desk clerks, reservation workers, and bookkeeping clerks.

Table 2

Occupational Profile of Hotel and Lodging Workers in Washington,
1998 and 2008
Source: Washington Employment Security Department

Estimated 1998

Projected 2008
Hotels & Lodging Places, SIC 70

Estimated Employment

Percent of Total Employment

Projected Employment

Percent of Total Employment
Managerial & Administrative

2,284

8.0%

2,476

7.9%
Professional, Paraprofessional & Technical

467

1.6%

509

1.6%
Sales & Related Occupations

1,187

4.1%

1,293

4.1%
Clerical & Administrative Support

5,160

18.0%

5,626

17.9%
Service Occupations

16,381

57.1%

17,943

57.2%
Production, Operating & Maintenance

1,160

4.0%

1,286

4.1%
Operators, Helpers & Laborers

987

3.4%

1,087

3.5%
Undefined Occupations

1,057

3.7%

1,141

3.6%
TOTAL

28,683

100.0%

31,361

100.0%


Hotel and Lodging’s Contribution to the Washington Economy

Hotel and lodging is part of the state’s tourism industry. Tourism is an "export" industry in that it is responsible for the inflow of wealth from outside the state. It is estimated by Dean Runyan Associates that travelers were responsible for $9.6 billion in economic activity in 1998. Hotel and lodging expenditures by travelers amounted to $1.4 billion; about one-seventh of the total.

Figure 7

Tourism Expenditures in Washington, 1991-1998 (Billions of 1998 dollars)
Source: Washington State 1991-1998 Travel Impacts and Visitor Volume, Dean Runyan Associates

For more detail of above graphic


Outlook

Although the current state of the hotel and lodging industry is very healthy, cautionary flags are beginning to be raised given concerns of overbuilding, easing demand, and overall market softness. For Washington hotel and motel operators, long-term growth will be dependent upon the state’s ability to increase year-round tourism activities through the creation and successful marketing of its natural resource attractions. Another area of year-round tourism trade comes in the form of convention and exposition-related travel. The Professional Convention Management Association estimates that the convention/meeting travel industry generates more than a third of the hotel and lodging industry’s annual revenues. In a highly-competitive industry, Washington can increase its share of business-related travel through increased marketing of its convention resources.

During the last ten years, employment in the Washington hotel and lodging industry has grown slower than statewide nonfarm employment. For the next ten years (2000-2010), forecasters project a continuation of this comparative growth; annual employment growth in the hotel and lodging industry is expected to average 0.7 percent; compared with statewide nonfarm employment gains of 1.7 percent annually. However, during the last ten years in the forecast period (2010-2020), hotel and other lodging is expected to decline slightly to 29,600 workers.

Figure 8

Washington Hotel & Other Lodging Wage & Salary Employment Forecast, 2000-2020
Sources: Washington Office of Financial Management,
Washington Employment Security Department

For more detail of above graphic
 
 

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