Jobs increase in leisure and hospitality sector, indicating a strengthening real estate market
Total nonfarm payroll employment increased by 304,000 in January, and the unemployment rate edged up to 4.0 percent, according to the U.S. Bureau of Labor Statistics.
The impact of the partial federal government shutdown contributed to the uptick in these measures. Among the unemployed, the number who reported being on temporary layoff increased by 175,000. This figure includes furloughed federal employees who were classified as unemployed on temporary layoff under the definitions used in the household survey. There were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings from the establishment survey.
Job gains occurred in several industries, including leisure and hospitality, construction, healthcare, and transportation and warehousing. In January, employment in leisure and hospitality rose by 74,000. Within the industry, job gains occurred in food services and drinking places (up 37,000) and in amusements, gambling, and recreation (up 32,000). Over the year, leisure and hospitality has added 410,000 jobs.
The holiday season increased travel to the hotel sector, building on an increase in the summer season, according to Marcus & Millichap. Hotel property performance generally slows during the fourth quarter, but the beginning of the holiday travel season likely supported additional room nights through year end. Overall, occupancy continued to remain at record levels as healthy employment gains and rising wages support consumer spending.
Summer occupancy, between the months of June and August, rose 70 basis points from the same time period last year as room demand rose at a healthy clip. The strong travel season generated a 3.3 percent increase in RevPAR compared with the prior year.
More Americans were expected to travel this holiday season. In particular, an estimated 48.5 million planned to drive to their destinations on Thanksgiving. Those with longer drives may choose to stay at interstate hotels en route. Interstate hotels registered considerable improvements recently, and annual occupancy was up 80 basis points ending in September.
Some families choose to spend their holiday vacations in warmer locales. Markets like Miami, Phoenix and San Diego generally benefit from rising room demand from these travelers. Phoenix in particular generates most of its room demand outside the summer months.
Across the globe, international tourism arrivals grew by nearly 6 percent to 1.4 billion last year, according to preliminary figures out Jan. 21 from the United Nations World Tourism Organization. That’s on top of 7 percent growth in 2017, and higher than the 4 percent to 5 percent growth the tourism body expected to see that year. Arrivals to the Americas increased by 3 percent to 217 million. North America increased by 4 percent, or 142.8 million, compared to 2017, which totaled 137 million.
