Monthly Labor Review • April 2011 49

The 2007–09 Recession: Leisure and Hospitality

Employment in leisure and hospitality 

departs from historical trends 

during 2007–09 recession

From the start of the second half of the 20th century till early 2008, 

employment growth in the leisure and hospitality industry had been 

interrupted only a few times by short and shallow declines. Industry 

job losses from the 2007-09 recession, however, were both severe and 

prolonged, continuing 6 months beyond the end of the recession

Eliot Davila

Eliot Davila is an economist in the 

Division of Current Employment 

Statistics, Office of Employment 

and Unemployment Statistics, 

Bureau of Labor Statistics. Email: 

davila.eliot@bls.gov.

Employment in the leisure and hospitality industry1

 fell by 454,000 

during the recession which began 

December 2007 and ended June 2009.2 

Like total U.S. employment, industry job 

losses did not coincide with those start 

and end dates. In fact, leisure and hospitality employment reached a cyclical 

peak in January 2008, 1 month after the 

start of the recession, and fell to a cyclical trough in January 2010, 7 months 

after the end of the recession.3 The industry employment peak coincided with 

the peak in total nonfarm employment, 

while the industry employment trough 

preceded the trough in total nonfarm 

employment by 1 month.

Compared with the previous 2 recessions, the 2007–09 recession had a sizeable impact on employment in the leisure 

and hospitality industry. The reduction in 

jobs during the 2007–09 recession, as a 

percentage of pre-recession employment, 

was significantly greater than during the 

1990–91 and 2001 recessions. Employment in leisure and hospitality fell by 

more than 2.2 percent on an annualized 

basis during the 2007–09 recession. By contrast, the annualized decline in employment 

during both the 1990–91 and 2001 recessions 

was roughly 0.4 percent.

Chart 1 shows the pace of job losses during 

post-World War II recessions. The eight recessions before 1989 had little discernable impact 

on employment in the leisure and hospitality 

industry. While the broader economy shed jobs 

during those economic downturns, employment in leisure and hospitality tended to hold 

steady. After 1989, however, employment in 

leisure and hospitality began to track cyclical changes in overall economic activity more 

closely. In both the 1990–91 and 2001 recessions, employment in leisure and hospitality 

fell and did not fully recover to pre-recession 

levels until about a year and a half after the 

start of the recessions. (Both recessions lasted 

8 months and total nonfarm employment continued to decline after the end of both recessions.) By the end of the 2007–09 recession, 

leisure and hospitality employment was 3.5 

percent below its pre-recession level. As of 

January 2011, a full 37 months after the start of 

the recession, employment in the industry was 

still 3.5 percent below its pre-recession level. 
The 2007–09 Recession: Leisure and Hospitality

50 Monthly Labor Review • April 2011

During the 2007–09 recession, a little more than 

half of the decline in leisure and hospitality employment was in the food services and drinking places 

subsector, where 230,000 jobs were lost. (See chart 2). 

Accommodation employment lost 129,000 jobs, or 

more than 28 percent of all jobs lost in leisure and hospitality, while arts, entertainment, and recreation shed 

95,000 jobs, or nearly 21 percent of the industry total. 

The remainder of this article analyzes the employment 

changes that occurred during the 2007–09 recession in 

each of these industries.

Food services and drinking places

From January 1990 to December 2007, food services 

and drinking places generated nearly three out of every 

four jobs gained in leisure and hospitality. Employment 

in the food services and drinking places subsector fell 

for 3 or more consecutive months only once between 

1990 and 2007. In contrast, during the 2007–09 recession, the subsector experienced 10 consecutive months 

of job losses. From the onset of the recession in December 

2007 until August 2008, food services and drinking places lost 

an average of 8,000 jobs per month. When the financial crisis 

deepened in September 2008, monthly job losses in the subsector accelerated.4

 From September 2008 to December 2009, 

food services and drinking places lost an average of 18,000 jobs 

per month. Altogether, food services reduced its workforce 3.8 

percent during the December 2007 to December 2009 period. 

Since January 2010, food services and drinking places had recovered 97,000 jobs5

 but remained 2.7 percent below its peak 

employment level, which was posted in December 2007. 

Employment declines in food services roughly coincided 

with declines in seasonally adjusted real personal consumption expenditures on food services, as measured by the Bureau 

of Economic Analysis. (See table 1.) Changes in subsector 

employment also roughly tracked with changes in retail sales 

at food services and drinking places, as measured by the U.S. 

Census Bureau and deflated by the BLS Consumer Price Index.6

 The sales and employment data series reflect the close 

correlation between consumer spending on leisure and hospitality services and employment in the industry.

 Chart 1. Leisure and hospitality index of employment, seasonally adjusted

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36

Index

 (start of recession =100)

107.5

105.0

102.5

100.0

97.5

95.0

2007–2009 recession

2001 recession

1990

 recession

1948–1989 recession average

107.5

105.0

102.5

100.0

97.5

95.0

Number of months from start of recession

Index

 (start of recession =100)

NOTE: The start of recessions is determined by the National Bureau of Economic Research (NBER).
Monthly Labor Review • April 2011 51

Accommodation

Accommodation lost 6.8 percent of its workforce during 

the 2007–09 recession, which was the largest percentage 

decline in employment of any subsector within the leisure 

and hospitality industry. Although employment in accommodation accounts for only about 14 percent of total 

industry employment, it contributed close to one third of 

the job losses during the 2007–09 recession. 

The decline in accommodation employment coincided 

with a decrease in demand for the subsector’s services during the recession. Real personal consumption expenditures 

on accommodations fell 6.5 percent from December 2007 

to March 2009, reflecting wide-scale cutbacks in domestic 

business and leisure travel during the recession. In addition, 

international visitation to the United States declined sharply 

from the fourth quarter of 2008 to the third quarter of 2009.7

Arts, entertainment, and recreation

The arts, entertainment, and recreation sector8 lost 4.8 

percent of its jobs during the 2007–09 recession. Employment in the sector reached a peak in March 2008, 3 

months after the official start of the recession, and then 

declined until reaching a trough in January 2010. Over 

the course of the year, sector employment showed little 

net change. The sector’s largest subsector—amusements, 

gambling and recreation—accounted for 80 percent of 

the decline. This subsector made up 72.5% of arts, entertainment, and recreation employment at the start of 

the recession and lost proportionately more jobs than 

the other two industry subsectors, performing arts and 

spectator sports, and museums, historical sites, zoos, and 

parks.

THE DEPTH AND DURATION OF JOB LOSSES in the 

leisure and hospitality industry during the 2007–09 recession was without precedent in the post-WWII era. Declines in food services and drinking places employment, a 

subsector which had contributed the majority of the job 

gains posted by leisure and hospitality between 1990 and 

2007, accounted for half of the leisure and hospitality jobs 

lost during the recession.

 Chart 2. Distribution of leisure and hospitality employment decline during the 2007–09 recession

Food services and 

drinking places

50.7

Arts,

entertainment,

and recreation

20.9

Accommodation

28.4

Percent
The 2007–09 Recession: Leisure and Hospitality

52  Monthly Labor Review • April 2011

Notes

1 Consists of North American Industry Classification System 

(NAICS) sector 71 (arts, entertainment and recreation) and NAICS sector 72 (accommodation and food services); the leisure and hospitality 

supersector will be referred to as an “industry” throughout this article. 

2 The employment data used in this article are from the BLS Current Employment Statistics (CES) program, a monthly survey of about 

140,000 nonfarm businesses and government agencies representing 

approximately 440,000 individual worksites. For more information 

on the program’s concepts and methodology, see “Technical Notes to 

Establishment Survey Data Published in Employment and Earnings,” 

www.bls.gov/web/cestn2.htm (visited Feb. 17, 2011). CES data are 

available at www.bls.gov/ces (visited Feb. 17, 2011). The CES data used 

in this article are seasonally adjusted. 

3 Recessions are identified by the National Bureau of Economic 

Research (NBER). According to the NBER, the most recent recession 

began in December 2007 and ended in July 2009. The previous two 

recessions were from March 2001 to November 2001 and from July 

1990 to March 1991. For a complete list of business cycle dates, consult 

the NBER webpage at www.nber.org/cycles/cyclesmain.html (visited 

Nov. 2, 2010).

4 For a more complete overview of financial activities employment 

trends during the 2007–09 recession, see George Prassas, “Employment in financial activities: double billed by housing and financial 

crises,” Monthly Labor Review, this issue, pp. 40–44, www.bls.gov/

Leisure and hospitality employment and real personal consumption expenditures, over-the-quarter changes, 

seasonally adjusted, fourth quarter 2007–second quarter 2009

Industry subsector

2007 2008 2009

Quarter IV Quarter I Quarter II Quarter III Quarter IV Quarter I Quarter II

Change in employment (in thousands)1

Arts, entertainment, and recreation...................... 21 6 –14 –36 4 –15 –40

Accommodation........................................................... 19 7 –15 –23 –31 -48 –18

Food services and drinking places......................... 45 –12 –31 –49 –86 –62 10

Change in real personal consumption 

expenditures (in millions of dollars)2

Recreation services...................................................... 39 –298 –1,108 –4,027 –3,128 434 –2,500

Accommodations......................................................... 2,027 588 1,249 –891 –2,507 –2,639 –234

Food services................................................................. 3,254 –8,086 716 –3,973 –7,282 –3,516 –4,743

1

  Employment data are from the Current Employment Statistics

(CES) program, a BLS monthly survey of approximately 140,000 nonfarm

businesses and government agenciesrepresenting approximately 440,000

individual worksites. 2

  Personal consumption expenditures data are from the Bureau of

Economic Analysis. SeeNational Income and Product AccountsUnderlying

Detail Table 2.4.6U, “Real Personal Consumption Expenditures by Type of

Product, Chained Dollars [Millions of chained (2005) dollars; quarters and

months are seasonally adjusted at annual rates],” http://www.bea.gov/

national/nipaweb/nipa_underlying/SelectTable.asp .

SOURCE:  Bureau of Labor Statistics and Bureau of Economic Analysis.

Table 1.

opub/mlr/2011/04/art7full.pdf.

5 For an overview of overall employment trends during the 2007–09 

recession, see John Eddlemon, “Payroll employment turns the corner 

in 2010,” Monthly Labor Review, March 2011, pp. 23–32, www.bls.

gov/opub/mlr/2011/03/art2full.pdf.

6 By deflating the Census data with CPI data, the effects of menu 

price increases on the changes in retail sales in food services and drinking places are removed. The seasonally adjusted “food away from home” 

component of the CPI-U for all U.S. cities was used to measure real 

personal consumption expenditures.

7 Reference is to data released by the Department of Commerce’s 

Office of Travel and Tourism Industries. See “2008 Monthly Tourism Statistics,” Table C and “2009 Monthly Tourism Statistics,” 

Table C.

8 The arts, entertainment, and recreation sector includes a wide range 

of establishments that operate facilities or provide services to meet varied cultural, entertainment, and recreational interests of their patrons. 

As defined by NAICS, this sector comprises (1) establishments that are 

involved in producing, promoting, or participating in live performances, 

events, or exhibits intended for public viewing; (2) establishments that 

preserve and exhibit objects and sites of historical, cultural, or educational interest; and (3) establishments that operate facilities or provide 

services that enable patrons to participate in recreational activities or 

pursue amusement, hobby, and leisure-time interests.