Colorado’s hospitality industry hardest hit by coronavirus unemployment, with claims up 600% in a week

Three weeks after Colorado’s first government-mandated shutdowns occurred, the state labor department continues to see no end to job losses blamed on the new coronavirus. And to little surprise, the hotel, restaurant and leisure industry were hit the hardest early on.

While the numbers are still coming in for this week — some 40,000 unemployment applications were filed between Sunday and late Wednesday — more details on who has been impacted were shared Thursday by the Colorado Department of Labor and Employment. 

“There was an industry that stood out,” said Ryan Gedney, senior economist with the agency, during a media call on Thursday. “Claims filed in leisure and hospitality, which includes arts, entertainment, recreation, hotels and restaurants, increased more than six times compared to the week prior and represented about 28% of the industry-level claims filed for the week of the 14th.”

Before COVID-19, the disease caused by the new coronavirus, leisure and hospitality unemployment claims were typically 9% of all claims, Gedney said.

Since Gov. Jared Polis’ first order for ski resorts to shut down temporarily on March 14, nearly every other industry has also had operations limited by government orders. Claims are coming in at a rate of between 10,000 to 15,000 a day, according to the labor department. 

In the three weeks since the coronavirus crisis began in earnest, there have been at least 121,000 claims filed. Of those, approximately 81,000 are considered official because labor agency staff verified the applicant’s employment and earnings. The 40,000 new applications received this week are still being processed.

CHART: We’re tracking Colorado’s coronavirus unemployment surge

Adjustments to the online filing system, such as asking folks to file on certain days based on their last name, helped ease some of the congestion, but there are still people unable to get through via phone. 

“The call volume to our call center is still overwhelming,” said Cher Haavind, the agency’s deputy executive director and agency spokeswoman. “Just for some perspective, pre-COVID on any given day, we were getting around 1,000 calls into our call center. On Monday, we had 225,000 call attempts. Some of those were successful calls, some people got busy signals. Some people were on hold.”

Staff has been doubled at the call centers and the agency may add workers from other state agencies or find a contractor to handle additional calls, Haavind said. 

Colorado also updated its unemployment numbers from last week to 61,583 initial claims, which differ from applications because claims have been verified.  The number is about three times higher than the prior week, which included the first round of layoffs due to the coronavirus.

Nationwide, unemployment also grew. The U.S. Department of Labor said Thursday that seasonally adjusted initial unemployment claims jumped to 6,648,000 for the week that ended March 28. That was double the number of claims from the prior week. 

And the numbers will continue to look grim for the state’s hospitality industry. 

Since Saturday, 2,451 jobs were cut by companies filing official warnings of temporary shutdowns with the state labor agency. The largest employer was The Broadmoor, with 1,411 positions slashed. On its website, the Colorado Springs resort noted that it “will temporarily cease all operations on Saturday, March 21 at noon,” but hoped to reopen for Memorial Day weekend. 

Other temporary closures and job cuts filed in the past few weeks included the Great Wolf Lodge in Colorado Springs, with 446 workers; several auto dealerships, including about 330 jobs at six Stevinson dealer locations; and restaurants like Pappas Restaurants, with 145 positions in Arapahoe and Douglas counties.

Most people out of a job will receive an additional $600 a week from the federal government on top of the state compensation. It’s part of the new “Coronavirus Aid, Relief, and Economic Security Act,” or CARES Act. Federal guidelines have not been released yet but the state labor agency said that anyone who has already filed for unemployment because of COVID-19 and has been approved needs to file again.

The labor agency also has been pushing its work-share and job-attached programs, which allow for reduced hours or seasonal workers who are expected to return to the same employer after a period of time. Those workers can still qualify for partial unemployment. Haavind said the state now has 300 work-share agreements with employers, up from about 10 before the spread of coronavirus.

Still, unemployment data affected by COVID is only just starting. Other industries are also getting hit, and Gedney said he expects more to come.

“Mining claims more than doubled the week of the 14th compared to the prior week. This is being driven by the steep drop in crude oil price,” Gedney said. “As time passes I fully expect the industry-level claims data to start reflecting steep increases for many other industry sectors. This includes, but is not limited to, retail, education, certain sections of health care, anything tied to travel, and other services, which has businesses like salons, barbershops and other personal services.”

This story was updated at 1:56 p.m. on April 2, 2020, with data from the work-share program.