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Economist claims state tourism industry needs a bailout to maintain jobs, quality of life


A University of Arkansas Walton College of Business economist contends the tourism and hospitality industry needs a greater and more targeted stimulus in order to survive the COVID-19 pandemic. (Photo: KATV)
A University of Arkansas Walton College of Business economist contends the tourism and hospitality industry needs a greater and more targeted stimulus in order to survive the COVID-19 pandemic. (Photo: KATV)
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University of Arkansas Walton College of Business economist Mervin Jebaraj contends the tourism and hospitality industry needs a greater and more targeted stimulus in order to survive, especially if Arkansas wants to maintain the quality of life amenities successful in attracting jobs prior to COVID-19.

Jebaraj, who heads the Center for Business and Economic Research, said the tourism and travel industry is facing strong headwinds likely to last well into 2021. For example, the recent Arkansas Tourism Ticker shows that the state’s 2% tourism tax is down 30.4% between January and June, and job numbers are down almost 14%.

“A lot of the PPP [Paycheck Protection Program] loans were meant to help people in the leisure and hospitality industry. There were a lot of questions about why large hotel chains were allowed to participate in the PPP loan program. It’s in large part because that sector includes hotels, restaurants, and those types of businesses that have been hardest hit by this pandemic,” Jebaraj said.

“The long-term prospects for recovery here are very slim, too. People are not returning to restaurants in large numbers. Business travel, which as you know, is the largest portion of the leisure industry or the hospitality industry, in terms of airline sales and hotel stays, that is not going to return to normal anytime within a year or even longer than a year,” he said.

Jebaraj noted that many cities and regions of the state have made huge investments in amenities to attract workers to their areas. Quality of life venues such as craft breweries, outdoor music venues, bed and breakfasts, and museums – things to do, in a nutshell – are important to growing the state’s workforce.

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