Hochul budget shows NYC hotels, tourism and retail won’t recover jobs until 2026

Gov. Kathy Hochul’s spend-happy $216 billion budget hides a more grim picture within — of New York City’s pandemic-ravaged and still lagging job market.

The hard-hit hotel and tourism industry and retail sectors — devastated by travel restrictions and lockdowns during COVID-19 outbreaks since the spring of 2020 — won’t recover all the lost pre-pandemic jobs for another three to four years, according to the governor’s economic revenue and outlook submitted with her budget proposal

“While other sectors have improved markedly, the retail, wholesale, and leisure and hospitality and other services sectors lag the most in their recoveries and are not projected to recover before 2026,” the governor’s forecast said.

During a presentation on Tuesday, state budget director Robert Mujica said the leisure and hospitality industry lost 30 percent of its jobs during the pandemic “and they are recovering the slowest.”

Hochul budget shows NYC hotels, tourism and retail won’t recover jobs until 2026
New York’s restaurant and nightlife industry has a long road to recovery according to Andrew Rigie, executive director of the NYC Hospitality Alliance.
James Keivom

“The impact and that sector is important across the state, but in the downstate region, particularly. So we’re watching those,” he said. “Sectors that where you had to show up and face to face. Those areas suffered the most.”

Overall, New York state is projected to recover another 5.6 percent of its lost jobs this year, progress but not enough to recover the gargantuan job losses in 2020 and 2021.

“At this pace, the State is projected to reach its pre-pandemic February 2020 peak by 2024,” the forecast said.

Vijay Dandapani
Vijay Dandapani, CEO of the NYC Hotel Association, said 125 city hotels and 18,000 rooms remain closed.
Getty Images for Hotel Associati

The tourism-heavy hotel industry, in particular, faces a long, steep climb to recover job losses.

“Under 20,000 of 55,000 jobs have returned in the hotel sector. So far, 125 hotels and 18,000 rooms remain closed,” said Vijay Dandapani, CEO of the NYC Hotel Association.

Dandapani said there are glimmers of progress, with 20,000 planned hotel rooms coming on line over the past two years despite the pandemic.

Rich Maroko, president of the 40,000 member Hotel and Gaming Trades Council, said, “It’s no secret that the hospitality sector is suffering. That’s why it’s so important to have leaders in government who recognize that fact and take action to aid hospitality workers, help the industry get back on its feet, and look for ways to create new hospitality jobs. So far, Gov. Hochul is prioritizing all three, with jobless aid, reopening incentives, and a smart approach to gaming expansion.”

Maroko also supports Hochul’s move to license up to three casinos in the New York City region, providing new potential job opportunities for laid-off hotel workers.

Hilton Garden Inn
Under 20,000 of 55,000 jobs have returned in the hotel sector.
Getty Images

Hochul previously announced a $450 million recovery package intended to bolster the state’s beleaguered tourism industry which, among other measures, directs $100 million in payments to unemployed hospitality workers, adds $100 million in incentives to employers to rehire laid-off tourism workers and provides $25 million in grants to help convention centers attract events.

But it’s not time to say cheers, according to representatives from the bar, restaurant and nightlife industries.

These venues are not only hurting from the dramatic drop in tourism but also the absence of COVID-fatigued New Yorkers hunkered down at home or fleeing the city altogether instead of going out and spending money amid several outbreaks, with the latest Omicron strain ruining the Christmas holiday season.

Empty restaurant
The hospitality industry has lost 30 percent of its jobs during the pandemic.
Christopher Sadowski

“New York City’s restaurant and nightlife industry have been absolutely devastated by the pandemic and there’s clearly a very long road to recovery for the industry,” said Andrew Rigie, executive director of the NYC Hospitality Alliance.

“That’s why we need ongoing support from all levels of government, and also need every day New Yorkers and visitors to eat, drink and support our local businesses. Our city won’t recover unless our hospitality industry is the core of the recovery,” he said.

One New York City business leader said many of the in-person and brick-and-mortar jobs lost during the pandemic may never return, and the Big Apple has to adapt to a rapidly emerging online economy.

“We are transitioning to a digital economy where work and consumer activity will increasingly happen online. It is important to focus on training and re-employment of people who have lost their jobs or their businesses and lack the skills required to succeed in this new, technology-driven economy,” said Kathryn Wylde, CEO of the Partnership for The City of New York.

Vacant spot in NYC
New York state is projected to recover another 5.6 percent of its lost jobs in 2022, although it’s not enough to make up for 2020 and 2021.

“This is the next industrial revolution, it is global not local, and we need to roll with it, not get lost in denial. Things have changed for good.”

Wylde recently told The Post that 11 percent of all new job postings for New York City firms were for remote positions — nearly triple the rate of at-home assignments listed before the pandemic.

New York State’s unemployment rate in November was 6.6 percent, lagging the national rate of 4.2 percent. New York had the fourth-highest unemployment rate in the country, behind California, Nevada, and New Jersey, the governor’s forecast noted.