Page 7 - NBIZ Magazine December 2020
P. 7

          lining is that some Mexican National   • While Houston is the 5  largest   industry is dealing with low prices,
          tourism has returned.               Metro area, it was only 8  for Covid-  excess supply, declines in drilling,
        • Texas Medical Center – Covid-19 care   19 job losses.                  permitting hurdles, and weak overall
          continues at a high, but the good    Hotels need the driving forces to   demand. The energy field lost 25,000
          news is that standard medical care   return to get hotel demand back on   jobs and shut down 690 oil rigs due to
          and elective surgeries have returned.  track. As the proud Energy Capital of   Covid-19. Global oil demand is current-
        • Energy Industry – With the oversup-  the World, the energy industry is the   ly expected to reach pre-pandemic levels
          ply of oil, energy remains on hold   main driving force for Houston hotel   by the end of 2022 with the Houston
          until demand returns.             demand. Unfortunately, the energy    energy industry stabilizing in 2024.
        • Convention Industry – Conventions
          are currently on hold and will
          slowly return in 2021 with new
          social distancing requirements,
          safety protocols, and reduced atten-
          dance due to the fear of in-person
        • Sports Events – The events have
          returned but the fans have not. Hope-
          fully, 2021 will bring back the fans.
        • Performing Arts – Entertainment
          is gradually returning with limited
          in-person attendance and perfor-
          mances online.
        • Space Exploration – Yippee, we sent
          two astronauts into space! This is a
          bright spot for the future.
           Overall, we are in a holding pattern
        until a vaccine is implemented and
        business and “non-essential” travel
        have the green light.
        Return to Pre-Covid Levels
           The five-year economic forecast by
        Oxford Economics indicates a loss of -3%
        in employment and -5% in GMP for Hous-
        ton in 2020 with a potential increase
        of 1.9% and 5%, respectively, in 2021.
        Unemployment increased from 3.8% in
        June 2019 to 8.6% in June 2020. Accord-
        ing to the Greater Houston Partnership,
        Houston lost 350,000 jobs due to
        Covid-19, of which only 142,000 (40.7%)
        have been recovered as of October. The
        Houston hotel industry lost 9,100 jobs
        and has only recouped 1,700 (18.7%).
           As we search for signs of a Houston
        recovery, we find a few glimmers of
        hope, as follows:
        • The Purchasing Managers Index hit
          a new low of 34.6 in April; however,
          it rose to 53.4 in September. This
          is positive since anything above 45
          indicates economic expansion.
        • Airport Passenger Activity dropped
          90% during April but “recovered” to a
          decline of only 61% in September. (We
          will take what we can get.)

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