Alongside higher incomes, household savings in Nebraska have increased since the pandemic. Strong household finances, along with pent-up demand from the pandemic, has fueled discretionary spending on recreation and experiences, from going to sporting events and visiting museums to eating at restaurants and staying in hotels. That spending might have been even higher, but businesses have likely been constrained by labor shortages and high input costs, possibly limiting options or availability for buyers.

See the following for an update on the leisure and hospitality sector in Nebraska. Or download the charts here.

Household savings in Nebraska appear to be higher than before the pandemic, despite easing from a recent peak.

A line chart displaying savings per capita, defined as disposable income in excess of total consumption, for Nebraska and the United States. The chart shows that savings in Nebraska are hire than the nation and before the pandemic.

Sources: BEA, Haver Analytics, author’s calculations.

Higher savings have supported spending on recreation and experiences following pent-up demand from the pandemic.

A line chart showing per capita recreation and experience spending for Nebraska and United States with projections for 2023 and 2024 showing that higher savings have supported additional spending on recreation and experiences.

Note: Recreation and experience spending includes household spending on membership clubs, sports centers, parks, theaters, museums, gambling, package tours, purchased meals and beverages, and accommodations.

Sources: BEA, author’s calculations.

Inflation has contributed to some, but not all, of increased spending on recreation and experiences.

A line chart showing the rate of inflation for several recreation and experience categories displayed as a 3 month moving average of the year-over-year percent change. The categories displayed include all items, restaurant meals, drinks at bars, club dues, event admissions, and hotels and motels. The chart shows that inflation is elevated for some, but not all of these categories.

Sources: BLS, Haver Analytics.

Following a pandemic-induced decline, the share of disposable income spent on recreation and experiences has rebounded.

A line chart showing the share of disposable income spent on recreation and experiences for Nebraska and the United States, indicating that the share of disposable income spent on recreation and experiences has rebounded after the pandemic.

Note: Recreation and experience spending includes household spending on membership clubs, sports centers, parks, theaters, museums, gambling, package tours, purchased meals and beverages, and accommodations. Projection applies the 2020-22 average annual percent change.

Sources: BEA, Haver Analytics, author’s calculations.

Nebraskans spend less on recreation and experiences than other states, suggesting some potential for further growth.

A bar chart showing household consumption on various categories in 2022 for Nebraska and the United States. The chart shows that Nebraskans spend less on recreation and experiences than elsewhere in the nation.

Note: Numbers in parentheses refer to the share of per capita household consumption in Nebraska. Recreation and experience spending includes household spending on membership clubs, sports centers, parks, theaters, museums, gambling, package tours, purchased meals and beverages, and accommodations.

Sources: BEA, author’s calculations.

A text slide that says "Though spending on recreation and experiences in Nebraska has been strong recently, it might have been stronger had supply not been somewhat limited as businesses address a shortage of labor and elevated cost pressures."

Fewer businesses providing recreation and experiences have opened since the pandemic compared to the broader economy.

A bar chart showing the percent change in number of establishments in Nebraska from 2019 for all industries; arts, entertainment, and recreation; hotels; and bars and restaurants. The chart shows that fewer businesses providing recreation and experiences have opened since the pandemic compared to the broader economy.

Sources: BLS.

Nationally, it has been more difficult for businesses in the leisure and hospitality industry to fill open positions.

A line chart showing the job openings rate for the total economy and the leisure and hospitality industry in the United States. The chart shows that the rate of job openings in leisure and hospitality has been greater than the broader economy, especially recently.

Sources: BLS, Haver Analytics.

Some businesses providing recreation and experiences have raised wages notably in an attempt to fill job openings.

A line chart showing the growth in average hourly earnings in Nebraska for the total economy and the leisure and hospitality industry compared to the previous year. The chart shows that wage growth in leisure and hospitality has been greater than the broader economy recently.

Sources: BLS, Haver Analytics.

In Nebraska, employment at bars and hotels has been slowest to recover to pre-pandemic levels.

A bar chart showing the percent change in employment in Nebraska at recreation and experience industries including the total leisure and hospitality industry; arts, entertainment and recreation; hotels; bars; and restaurants. The chart shows that employment at bars and hotels has been slowest to recover since the pandemic.

Sources: BLS, Haver Analytics.

In addition to higher labor costs, businesses providing recreation and experiences also report elevated input prices.

A line chart showing the six month moving averages of the diffusion index for the wages and benefits and input prices indicators of the Tenth District Services Survey for tourism, hotels, bars, and restaurants. The chart shows that in addition to higher labor costs, businesses providing recreation and experiences also report elevated input prices.

Source: Federal Reserve Bank of Kansas City.

Reflecting constraints in the industry, activity in leisure and hospitality has grown more slowly than the economy overall.

A bar chart showing the percent change since 2019 in real gross domestic product for the broader economy and leisure and hospitality industry in both Nebraska and the United States. The chart shows that activity in leisure and hospitality has grown more slowly than the economy overall in both Nebraska and the United States.

Note: In 2023, Leisure and Hospitality GDP comprised 2.6% of GDP in Nebraska and 4.0% of total US GDP.

Sources: BEA, Haver Analytics.

Concluding Thoughts

Despite higher prices, consumers continue to spend on discretionary recreation and experiences, supported by strong income growth and elevated savings. Businesses offering recreation and experience-oriented services, however, may remain constrained by ongoing cost pressures and labor scarcity as economic growth in Nebraska has remained strong.

Author

John McCoy

Associate Economist

John McCoy is an associate economist in the Regional Affairs Department at the Omaha Branch of the Federal Reserve Bank of Kansas City. In this role, he supports research and ou…

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