Economist: While rest of SC’s economy is almost back, leisure & hospitality down 15%
COLUMBIA, S.C. (WIS) - Gov. Henry McMaster and other lawmakers have touted that South Carolina is, “open for business,” but one of the state’s largest industries is open and still suffering: tourism.
According to University of South Carolina economist Joey Von Nessen, large sectors of the state’s economy -- like manufacturing and construction -- are back to pre-pandemic employment levels or are close to it.
However, industries related to travel and tourism, which make up about 10 to 15 percent of South Carolina’s economy, are still not where they used to be before COVID-19.
“Except for leisure and hospitality and tourism, employment levels right now are very good,” Von Nessen said. “They’re actually within about one percentage point of where they were this time last year before the pandemic really hit us. But if we look and leisure and hospitality, though, it’s down still about 15% compared to where we were this time last year.”
Von Nessen added that employment levels for some industries like health care and education are still down about five percentage points, but on average -- when tourism and hospitality are excluded -- South Carolina is only down about one percentage point.
The economist said the missing piece to getting back to previous employment levels is based on biology rather than economics.
He said without a widely available vaccine, consumers might not feel comfortable going back to shopping, traveling, and dining out like they did pre-pandemic.
Von Nessen imagines two scenarios when it comes to South Carolina’s economic recovery: a wide-scale vaccine rollout that hits its stride before peak tourism season, and one that gets going right after it.
“If we see a vaccine rollout that really hits a tipping point and gets to most of the South Carolina population by Memorial Day, by the time we normally see tourism season really ramping up, then we see consumer confidence going up at exactly the same time that the normal tourism season ramps up,” he explained. “And so that’s a really a double benefit for leisure and hospitality and for tourism and can lead to a strong demand across the summer and can really help us to recover.”
Director for Parks, Recreation and Tourism in South Carolina, Duane Parrish, said he hopes the summer and spring will serve as an on-ramp for a successful Fall tourism and hospitality season.
“The cabin fever is at 10 months right now and it will be even higher soon. I expect visitors to come out in the late summer early fall, and I think the fall will be a big, big time for tourism, and quite frankly a time for our tourism industry to get back on its feet,” Parrish said.
However, Parrish doesn’t believe the state’s tourism industry can be fully turned on overnight.
It’s a gradual walk, jog, run process. It’s a gradual climb,” Parrish said. “Even if they are not traveling they make reservations in the summer for the fall. So I think there’s a lot of momentum going through the rest of the year,” he added.
Von Nessen said Parrish’s assessment makes sense, and he predicts South Carolina’s economy will recover by the end of 2021 regardless of when exactly the vaccine rollout hits its peak, but said a strong tourism season can be “key” to the state’s economic success.
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