Although the spread of Covid-19 has slowed around the US and in other countries, the damage that the global pandemic has cost increases as more reports analyze the various impacts that the virus has caused in different sectors.
Needless to say, the hospitality industry had been hit the hardest. With everyone forced to stay in to curb the infection, facilities like hotels, inns and all affiliated businesses were forced to close down even before nationwide lockdown measures were introduced.
The newest analysis from the Oxford Economics for the American Hotel & Lodging Association has calculated the exact number – $16.8 billion of tax revenue for federal and state governments in the US alone. California, New York and Florida sustained the greatest economic shock.
Tax revenue generated from the hospitality industry comes from lodging taxes, personal income tax, gaming taxes and much more. Like all other tax money, these revenues are what keep afloat many of the vital social services like education, transportation and public safety.
It is important to understand that this already large loss only looks into the economic damage that the pandemic has had on one sector. New York City officials have circulated reports that estimated the city could potentially lose out on some $11 billion for the next fiscal year.
This kind of unprecedented, unexpected cratering of public funds can have wide-reaching consequences. All major projects that were underway may have to be halted. Cities and states will likely hire much less civil servants – teachers, police officers, firefighters – because of budget constraints.
Forecasts for the future are as dim and worrisome, if not more so than the short-term predictions. Industry insiders expect that it will take several years before the tourism industry can return to a pre-Covid level.
Like virtually every other industry sans online retailers, the hospitality industry has asked for financial aid. Hotel owners around the US have urged for help, saying that their industry greatly contributes to the wellbeing and economic safety of the local communities.
While their call for help is logical, it remains to be seen if the government will respond to these calls as all sectors ask for federal support. Share your thoughts with us on this story in the comments, and be sure to follow us on Facebook for more news like this one.
Replaced!