As stay-at-home orders remain in place at the start of summer tourist season, COVID-19 takes a bite out of resort towns’ economies

Last month, Pioneer Institute showed that the hospitality and tourism sector is among the most negatively impacted industries from the COVID-19 pandemic in Massachusetts. Now, this trend is clear on even the smallest scale, with zip codes reliant on seasonal tourism, lodgings, and recreation to fuel their economies estimated to have some of the highest unemployment rates in the state. This is according to Pioneer Institute’s new COVID-19 Unemployment Tracker, which presents unemployment estimates modeled by Applied Geographic Solutions, Inc., based in Thousand Oaks, California. 

 

Take zip code 01247, mostly in North Adams, for example. It is home to the largest contemporary art museum in the United States, with several other history, science, and art museums and historic mansions dotting Main Street and the surrounding neighborhood.  According to the tracker, this area is estimated to have one of Berkshire County’s highest unemployment rates, 32.2%, as of May 9. Zip code 01236, largely coextensive with the mountain village of Housatonic, is the highest, at a projected 32.6%. Housatonic is a tourist attraction in its own right, featuring theaters, art galleries, and a scenic hiking trail. 

 

Figure 1: Unemployment rate estimates in Berkshire County among zip codes where the most common employment sector is Hospitality, March-May 2020

Sources: MassEconomix.org, Applied Geographic Solutions Inc. 

 

That said, many of the resort towns in the Berkshires maintain an estimated unemployment rate below the state average (see Figure 1). While it’s hard to trace the effect of reduced tourism on the region’s economy, for some parts of the Berkshires the worst may be yet to come. Zip code 01240 in Lenox, Massachusetts, home to the Tanglewood Music Festival, has a below-average unemployment estimation of 26.2% as of May 9, but concert season at Tanglewood was cancelled on May 15. Other towns in the area have ski resorts whose tourism season ended well before stay-at-home orders were implemented.

 

Meanwhile, Williamstown has begun moving its award-winning summer theater festival to a virtual platform, and has already seen its estimated unemployment top 30%. Resident artists and associated staff at music and theater venues, state parks, and other establishments oriented towards summer tourism may face additional layoffs, but opening the economy could still draw tourists from outbreak centers like Boston and New York City, aiding the spread of the virus. Furthermore, permanent residents of the Berkshires are disproportionately senior citizens, and thus are more vulnerable to the worst effects of COVID-19. 

 

Per capita case counts of COVID-19 in Berkshire County are still well below the state average as of May 20, and the county would likely see priority in a regional phasing plan for opening the economy. But while there has been a recent decline in new cases and hospitalizations in Massachusetts as a whole, the window of opportunity for a full-fledged summer tourist season in the Berkshires has likely already passed.       

 

The data used in this tracker and research was provided by Applied Geographic Solutions, Inc. (AGS), of Thousand Oaks, California, according to their weekly release including estimates through May 9, 2020, and is presented with their written authorization. The methodology that AGS used to model this data is described here. Because the federal government does not report unemployment rates by ZIP Code or community, and issues unemployment reports on a time-delayed basis, AGS has created an economic model to estimate real-time unemployment by state and municipality using a combination of federal employment sources. In its modeling, AGS uses data from the Bureau of Labor Statistics labor force by ZIP Code and occupation; weekly state-by-state initial jobless claims by occupation; and monthly labor force publications that provide detailed unemployment estimates by state, and major metropolitan areas. AGS says this about its methodology: “On a weekly basis for the next several months, AGS will be creating and making available an updated, rolling weekly unemployment estimate at the block group, ZIP code, and county levels of geography. While we do not pretend to have “on the ground” information to support these estimates, our initial tests on the data to date suggest that our methodology is a reasonable one – we are focusing on the distribution of employment by occupation and using a series of estimates of vulnerability curves to simulate what is being reported at a national and state level.”

 

Andrew Mikula is the Lovett & Ruth Peters Economic Opportunity Fellow at the Pioneer Institute. Research areas of particular interest to Mr. Mikula include urban issues, affordability, and regulatory structures. Mr. Mikula was previously a Roger Perry Government Transparency Intern at the Institute and studied economics at Bates College.