Written by Connor Dudas
Edited by Gabe Agüero
Although Connecticut’s traditional professional and service sectors are progressively recovering from the pandemic’s economic contractions, the hotel industry is a notable exception to the Nutmeg state’s steady revitalization. The hospitality industry’s comparatively anemic job recovery is best illustrated by the American Hotel & Lodging Association’s projection that CT will have regained, by the year’s expiration, 72% of the 26,225 hotel sector jobs eliminated during the pandemic.
Importantly, because the association’s projections exclude jobs generated by restaurants, tourist attractions, and other businesses dependent on the lodging industry, they underestimate the ramifications of the hospitality industry's underwhelming recovery. Business-related travel comprises 60% of CT hotel’s customer demographic, which may be permanently diminished due to the increasing adoption of remote work accommodations and digital conferences. Eric Gjede, a specialist in labor and taxes for the Connecticut Business and Industry Association, identified uncertainties about the business travel situation as a significant source of vulnerability for CT’s hospitality sector.
The recently authorized two year state budget and federal coronavirus relief funding have collectively appropriated $60 million to CT’s hospitality industry as well as tourism promotion resources. Specifically, the tourism promotion initiative is subsidized by hotel occupancy tax revenue. The CT state government directly deposited an additional $150 million into the state unemployment fund.
The state has borrowed approximately $700 million to maintain the fund, a substantial debt that is expected to exceed $1 billion by year’s end. Normally, businesses are assessed to cover such debts, so that $150 million deposit effectively functions as direct tax relief to Connecticut businesses.
Additionally, the state legislature’s Finance, Revenue, and Bonding Committee approved a bill allowing restaurants and hotels to maintain a 1% surcharge on the standard state sales tax, estimated to represent $50 million in potential revenue for CT businesses, although restaurants are expected to be the primary beneficiaries of this exemption. Regardless, Ginny Kozlowski, executive director of the Connecticut Hotel and Lodging Association, described the sentiment around the hospitality sector’s performance as “an acute awareness that we’re in serious trouble.”
Works Cited
Phaneuf, Keith M. “Analysis: COVID-19 Hit Hotel Industry Harder in CT.” Connecticut Post, Connecticut Post, 10 May 2021, www.ctpost.com/news/article/Analysis-COVID-19-hit-hotel-industry-harder-in-CT-16164833.php.
Phaneuf, Keith M. “CT Hospitality Jobs Struggling to Recover from Pandemic, Report Shows.” CT Insider, CTInsider, 24 July 2021, www.ctinsider.com/news/article/CT-hospitality-jobs-struggling-to-recover-from-16337019.php.