PROVIDENCE — The pandemic took its greatest toll on Rhode Island’s hospitality industry, which saw food, arts, entertainment and recreation business plunge by 28 percent from 2019 to 2020, Roger Williams University students told state officials Friday.
“That is nearly one-third, so the industry lost its health,” RWU management professor Farbod Farhadi said. “It needs hospitalization.”
“Obviously, we all know that food services and entertainment definitely took a big hit,” RWU student John Noonan said. “But to me it’s just crazy to see that they dropped $730 million in one year – a 28 percent decrease.”
Students in the Analytics Club at RWU’s Gabelli School of Business came to the State House on Friday to present to information it had analyzed to the secretary of state’s office.
Overall, Rhode Island’s gross domestic product took a 3 percent hit in 2020, compared to 2019, the students said. And the data show the impact on some of the state’s largest industries, such as health care (8 percent GDP decrease) and manufacturing (3 percent GDP decrease), in that period.
But two other large industries saw improvement – real estate and rental (3 percent GDP increase) and finance and insurance (4 percent GDP increase).
And while plenty of companies declared bankruptcy or went out of business, Rhode Island actually ended 2021 with slightly more businesses than before the pandemic hit, the students said.
Dylan Kovacs, president of the Analytics Club, said that reflects an increase in the number of limited liability corporations in Rhode Island. For example, the number of new filings for domestic limited liability corporations shot up by 22 percent in 2020 and by 31 percent in 2021.
“What I found to be the reason behind this is a lot of people during COVID decided to leave their corporations and start their own business in order to make themselves more flexible with their time,” Kovacs said.
Maureen Ewing, director of business services in the secretary of state’s office, said it was surprising at first to see an increase in business entities during the pandemic. But she said people are changing the way their work and filling gaps in the economy.
The students presented a chart of active business entities by industry between 2017 and 2021. For example, they said a 7.7 percent increase in information companies included those who launch YouTube channels and podcasts, a 21 percent inc utilities such as solar power companies, and a percent increase 7.6 percent increase in agriculture included flower farms.
RWU student Phillip Call noted that while 19.9 percent of the white population tested positive for COVID-19, 42.4 percent of the Hispanic or Latino population tested positive and 30 percent of the Black population tested positive.
“This was one of the things that surprised me and made me sad to see,” Farhadi said, noting that nearly half of the state’s Latino population was impacted.
The data show Rhode Island’s unemployment rate spiked to 17.4 percent in April 2020 but dropped to 4.8 percent by December 2021. And the state unemployment rate stood at 3.4 percent as of March, which was below the US unemployment rate of 3.6 percent, according to the state Department of Labor and Training.