Growth in Hospitality Sector Sluggish
After nearly three years of almost continuous growth, the leisure and hospitality sector is slowing down.
That explains some of why the Leading Economic Index for August from the James Hull College of Business remained unchanged in Augusta and only up by 0.2 percent from a year ago.
In a news release, Simon Medcalfe, associate professor of finance at Augusta University’s Hull College, said that the second quarter of 2016 saw a return to strong growth in leisure and hospitality but August had poor numbers.
He added that the local economy has been struggling to add jobs for the last couple of years. In 2014, the economy created about 6,000 new jobs. In 2015 it was fewer than 2,000. To date this year, there have been about 2,500 new jobs created.
A recent report from the Federal Reserve Bank of Atlanta mentioned a similar trend across the southeast. Hotel construction fell in the wake of the financial crisis but demand rebounded quickly resulting in rising revenue per available room for hotels as well as high occupancy rates. Now, construction is catching up, which will dampen hotel revenues but may mean more jobs.
The Fed report identifies nine planned hotel construction projects in Augusta.