Portland had the wind at its back in the years before COVID-19. The city was buoyed by an influx of highly educated workers, a resurgent technology sector, an active construction industry and by Portland’s robust food and beverage scene that attracted visitors from around the world.

That hospitality sector collapsed during the pandemic, when restaurants and bars all shuttered indoor dining to contain the spread of the deadly virus. Portland’s hospitality jobs never fully recovered and now the rebound has stalled. City economists warn that is an ominous sign for Portland’s broader comeback.

“It is difficult to imagine a resurrection of the Portlandia economy of the 2010s without a recovery in this industry,” they wrote in a budget forecast last month.

Multnomah County’s hospitality workforce shed nearly 35,000 jobs in April 2020, according to state data, a 50% plunge in the pandemic’s first month. A similar decline took place across Oregon and across the country in response to the threat posed by COVID-19.

Business began bouncing back almost right away and by early 2023 Multnomah County had recovered almost 80% of the hospitality jobs it had lost. In most places, the rebound continued. But not in Portland.

Multnomah County’s hospitality workforce remains 13% smaller than it was in 2019, according to data from the Oregon Employment Department, and hasn’t grown at all in the last two years. In contrast, the statewide hospitality industry has fully recovered all the jobs it lost during the pandemic — if you exclude Multnomah County.

Though Portland lost some well-known restaurants in the pandemic years, lots of the city’s favorites remain and many more well-regarded establishments have opened in recent years. This past week, The New York Times hailed Portland as one of “52 Places to Go in 2026,” describing it as “one of the most culturally dynamic cities in the country.”

The Times noted the pending arrival of the James Beard Public Market near Pioneer Square, a year-round market that will showcase Oregon’s culinary bounty. Backers hope the market will provide a downtown draw similar to Seattle’s Pike Place Market, and generate significant economic benefits.

There are other signs that Portland’s bars and restaurants are coming back. The number of licenses to serve alcohol at bars, restaurants, hotels and brewpubs dropped by 15% between 2019 and 2023. But a 9% jump in licensed establishments last year erased most of the prior years’ decline.

Still, the city is struggling from reputational damage it suffered during the pandemic, when crime and homelessness surged, and from a decline in business travel. While crime has fallen sharply over the past two years, homelessness continues to rise and many business leaders say the city’s taxes are deterring investment.

Hospitality jobs aren’t especially lucrative. They pay about $40,000 annually in Multnomah County, state figures show, a little less than half the average wage across all industries. But hospitality work plays a vital role for people entering the workforce, those who want part-time jobs and for some workers with limited English proficiency.

The hospitality sector is also central to Portland’s identity. Residents and visitors savor Portland’s reputation for finely crafted meals, drinks and desserts.

Hospitality also helped fill the city’s coffers during the last decade, thanks to a 5% lodging tax paid on hotel rooms and short-term rentals.

“In the decade prior to the pandemic, (lodging tax) revenues more than doubled as tourism within the city thrived,” Portland’s economists wrote last month. “However, this revenue stream has still not fully recovered post-pandemic.”

The budget forecast notes that Portland hotel occupancy is up, modestly, but finds that room rates are down and so tax revenue is, too. The economists forecast lodging tax revenue of $25 million in the current fiscal year, 65% of the pre-pandemic peak, and they project that lodging revenue will probably remain depressed for at least another five years.

This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.