Maine’s hospitality industry could lose one-third of its revenue and tens of thousands of jobs this year because of the coronavirus pandemic, according to a projection from University of Maine economists.

The report issued Tuesday compares the likely performance of restaurants and lodging businesses this year with how they fared in 2018, the most recent year analyzed by economists for a report published last year for the HospitalityMaine trade group. The study found that Maine hospitality businesses experienced a drop in revenue of 35 percent in March compared with a year earlier, followed by a 63 percent drop in April.

Going forward, it predicts the Maine hospitality industry’s economic contribution for the full year will be $4.6 billion, about 33 percent less than two years ago. The total economic impact includes other businesses that benefit from the industry.

Employment in the state’s hospitality industry is expected fall by 42 percent this year to almost 46,200 workers, the report says, while their total earnings are expected to decline by roughly 23 percent for the full year to about $1.6 billion.

Hotels, bars and restaurants have been some of the hardest-hit businesses in Maine and across the country by the COVID-19 pandemic. In Maine, hospitality businesses were among the first to close in March as the state enacted a shutdown to limit the virus’ spread and they were forced to remain closed to the public longer than other enterprises, especially in southern Maine.

Some lodging business say their recovery is shackled by state requirements that visitors self-quarantine for 14 days or attest to a recent negative COVID-19 test. Gov. Janet Mills’ administration has said it is looking for alternatives, but that it needs to protect residents’ health by limiting travel from parts of the country that have a higher prevalence of the virus.


The pain will be worse if Maine reopens too fast and viral outbreaks lead to further shutdowns and economic disruption, the governor has said.

University of Maine Economics Professor Todd Gabe co-authored the report and said its findings are preliminary and based on revenue, payroll and employment for the first four months of 2020, as well as an economic recovery model developed by researchers at Harvard and Brown universities and the Bill and Melinda Gates Foundation.

“The analysis does not assume that the current travel restrictions will continue through the end of the year,” Gabe said. An updated report is expected in August, using May and June hospitality sales figures from Maine Revenue Services.

Cliff House Maine, an upscale resort in Cape Neddick, expects to fill about half of its 226 rooms over the Fourth of July weekend. It’s the highest number of guests the hotel has had since March, said Managing Director Nancy White. A year ago, nearly every room was booked.

In normal times, “we would be sold out right now,” White said.

The resort spent tens of thousands of dollars retrofitting its rooms, lobbies and public spaces. It has only about a quarter of its usual 450 workers on staff, White said, adding that guests call every day to cancel reservations because they feel they cannot meet Maine’s entry requirements.


Unless the state eases restrictions, such as by allowing guests to attest to self-quarantine at home for two weeks before arriving, the season seems like it is already over, White said.

“We have two or three weeks to book the rest of the season – after that it is gone,” she said.

The U.S. travel and hospitality industry has been pummeled by the combination of early closures to prevent the spread of COVID-19 and the suppressed consumer demand that led to the cancellation of group travel and large events such as weddings and conventions.

Nationwide, leisure and hospitality businesses shed more than 7 million jobs between March and May, according to the most recent jobs report from the U.S. Bureau of Labor Statistics. Restaurants created jobs as they reopened, but some of that progress may have been lost as spikes of COVID-19 cases in some states forced businesses to close or curtail services again and slowed reopening elsewhere.

Maine’s hospitality and leisure businesses have lost about 35,000 jobs since February, roughly 50 percent of employment in that sector.

While HospitalityMaine President and CEO Steve Hewins hopes Maine’s tourism economy can rebound between now and September, he already is looking forward to measures to help the industry recover for next year.


Last month, the industry group proposed an $800 million state aid package that includes financial support to businesses and employees. Hewins said the group is still pushing that proposal and fine-tuning the details of how it would be used. The proposal would consume more than half of the $1.25 billion in relief Maine was granted as part of the federal CARES Act, money that hospitals, schools, municipalities and other state agencies also want to use.

“The reason we had to put this out now is because this supports the need for massive recovery,” he said.

Hewins added that his group also is pushing the state’s congressional delegation for more federal financial support.

The economic report is a preliminary indicator of how much the state stands to lose in terms of tax revenue, employment and economic strength if hospitality continues an unsupported fall, Hewins said.

“The industry is so embedded in Maine’s economy,” he said. “The issues that are facing this industry are more acute than in any other sector. The longer they don’t get a chance to earn anything this season, the bigger the hole gets.”

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