By Gwyneth Burns
BU News Service
Unemployment has increased on Cape Cod since the COVID-19 pandemic collided with the region’s seasonal economy. Now, legislators, community leaders and residents are trying to predict an uncertain future.
Many businesses on the Cape were shut down for months after Gov. Charlie Baker’s state of emergency declaration and mandated closures. They slowly began reopening in early June, and although the region’s economy has not yet been able to run at full capacity, visitors are being welcomed back.
“The workforce is here, the infrastructure is here, the customers just need to be invited and have confidence to come because we have a strong ethos of safety and following health practices,” said Wendy Northcross, CEO of the Cape Cod Chamber of Commerce.
The chamber encourages safe travel to the region to boost the economy and expects employment rates to increase as more guests return to the Cape and Islands.
“Tourism is very resilient and more easily restarted through targeted marketing than other sectors where supply chains are greatly disrupted,” Northcross said. “A nimble marketing plan, where we can present the current state of travel and assure guests of their safety, will contribute to our resiliency.”
When COVID-19 interrupted routines in March, Massachusetts had a 2.8% unemployment rate. But by May, the rate increased to 19.6% in Barnstable County. The county had an 11.5% unemployment rate in September, according to the U.S. Bureau of Labor Statistics.
In October, the national unemployment rate declined to 6.9%, as economic activity resumed.
Accommodations and food and beverage sectors have been hit hardest, Northcross said. More than 2,350 people remained unemployed in the sector at the peak of the Cape’s tourist season in August, according to the Cape Cod Chamber of Commerce.
“Now, the unemployment number is closer to 10%, which is a vast improvement over the nearly 30% some towns, like Provincetown, experienced in April and May,” Northcross said. “Still, we are working to get employees in accommodations and food and beverage services reemployed by stimulating safe travel to the region.”
Before the pandemic hit, tourism on the Cape was expected to grow by 7%, partly in anticipation of celebrations honoring the 400th anniversary of the Mayflower’s arrival, according to the chamber. But in March, the chamber began projecting a roughly 50% loss from last year’s business due to the pandemic.
“We have a real economic cycle here, and for 23 years I owned a bed and breakfast, so I was part of the cycle,” state Rep. Sarah Peake, D-Provincetown, said. “They talk about 100 golden days to make the money, and then many businesses close or operate at a far reduced capacity.”
The economy depends on summer capital to sustain businesses and livelihoods through the winter until the start of the following season, but this was disrupted during the pandemic, Peake said.
“The Cape and Islands have some of the highest rates of unemployment in the off-season, given our seasonal economy,” state Sen. Julian Cyr, D-Truro, said. “We expect to see higher levels of unemployment here, and we may have an even higher level this year, given COVID-19.”
Many businesses that traditionally open in the spring didn’t do so this year, as the state was still in the first phase of its reopening plan. Because of this, Peake said, many employees were unable to start working at the beginning of the season. This led legislators to extend unemployment insurance to aid business owners and independent contractors.
Peake is focused on securing more support for small businesses.
“With the exception of a few large banks and a couple corporations or educational institutions, everybody is a small-business owner down here,” Peake said. “My concern is that come next April, the state has to have an economic development package in place to assist seasonal communities and business owners to be able to get open again.”
State legislators are working across party and district lines to design packages to assist seasonal small businesses, knowing that a one-size-fits-all approach to aid won’t be applicable in all areas of Massachusetts, especially in tourism hot spots, Peake said.
“There are industries that are inherently seasonal, and that is especially true on the Outer Cape and on the Islands, but across the region there is an inherent seasonality,” Cyr said. “We worry less about that, certainly that is always a concern, but we are moreso worried about longer-term unemployment.”
It is too early to predict whether 2021 will allow for a closer-to-normal summer, Cyr said, as everything is dependent on the status of the pandemic. The state is in the midst of a resurgence of coronavirus cases, including on the Cape and Islands.
Northcross said the Cape Cod chamber is lobbying the Baker administration to release allocated tourism marketing funds in the Tourism Trust Fund by Jan. 1 and to move the state Senate’s economic development bill for recovery tourism marketing into action. The bill includes $4 million for regional tourism councils such as the chamber.
The chamber also has submitted a grant request to the Economic Development Administration, part of the U.S. Department of Commerce, in an attempt to replace lost dollars from state funds, Northcross said.
Restarting the economy is dependent on financial support, but also on visitors’ trust and willingness to return to the Cape and Islands.
“The local hospitality industry has strictly followed protocols in order to reopen, stay open and generate business,” Northcross said. “The consumer needs to know this and understand how testing and contact tracing has worked to keep our residents and guests safe, increasing resiliency to our economy.”
This article was originally published in the Cape Cod Times.