Hospitality Management and COVID

A couple of months before the pandemic hit, I attended an employer advisory board meeting for our hospitality management program. Despite our location on the Jersey Shore, where summer tourism is a major industry, the program is only a few years old. At one point in the meeting, someone asked the department chair how many graduates she was expecting this spring. When she answered, one of the employers immediately piped up, “I’ll take all of them!” She was absolutely serious.

I mention this because the hospitality industry is one of the sectors hardest hit by the pandemic. Restaurants and hotels are all about sociability and travel; lockdowns and social distancing strike at the heart of their business model. And it’s likely to get worse before it gets better, at least in northern states, because outdoor dining that’s perfectly pleasant in September can get a bit brisk in December. With indoor dining strictly capped, and outdoor dining too cold to contemplate, the industry is suffering.

That hurts us in a couple of ways, but it could also be instructive.

Many of our students had part-time jobs in hospitality and tourism-related places, particularly restaurants and retail. When those places shut down in the spring, students lost those jobs and therefore those paychecks. Some activity came back over the summer, but now it looks likely to retreat again, just in time for spring tuition bills.

It also makes our employment-focused program in hospitality a harder sell to students. It’s one thing to go above and beyond to get a chance to jump into a booming industry; it’s quite another to try to fight for a slot in an industry in the midst of a contraction. In this case, the contraction is likely to be short term, which is good, but even if vaccines and warmer weather combine to bring the industry roaring back next summer, it will probably be smaller. Some places just won’t make it until then. A meaningful stimulus would help -- I certainly don’t see the usual argument about “moral hazard” applying in the context of a pandemic -- but it doesn’t appear imminent.

To the extent that the crisis is instructive, it reminds me of what happened at DeVry when the first tech bubble burst in 2001. DeVry had sold itself to students as a way to get a good job in a growing industry, and for a while, that was true. Then the industry took a steep turn, and within a few months, the market for telecom grads cratered. That led to a quick and severe enrollment drop, since people figured out quickly that the payoff wasn’t likely to be there.

The advantage community colleges have over places like that, other than not having to make a profit, is a wider range of offerings. That’s why I get twitchy when people -- even while meaning well -- reduce community colleges to job training centers. Job training centers are only useful when industries are hiring. But education is useful across the board. It’s why we insist on general education classes for degrees, even when the degrees are meant to be immediately applicable. If you have the rotten luck to graduate into a recession, you should at least have the kinds of transferable skills to move from one industry sector into another, and to move up relatively quickly. After all, knowing that an industry is likely to bounce back in a year or two doesn’t help much if you need an income now.

Financial advisers recommend diversified portfolios as hedges against risk. The same should apply to colleges. An industry that wanted to hire grads faster than we could produce them can turn cold within months, which is less time than a program of study takes. Best to include some skills that matter in every part of the business cycle, even the cold parts.