The Washington area's service economy has grown dramatically over the last five years, now accounting for about 600,000, or 30 percent, of the area's work force -- and surpassing the federal government as the major employer of local residents.
Still, a government job in the local economy is, on average, more valuable than a job in the services sector, said Stephen S. Fuller, professor of urban and regional planning at George Washington University.
The services sector is characterized by a slightly below-average annual wage of $22,517, while the government sector is characterized by an above-average annual wage of $25,244, Fuller said. "That differential is expected to continue because so many service-sector jobs are low-wage, like food services and custodial services," he said.
Business services, such as management consulting, data processing, research and development and building operations, accounted for more than one-fourth of all service jobs in the metro area in 1982, the last year Census Bureau figures for the metro area were updated.
Legal services, with 23.3 percent growth, was the fastest-growing service subsector from 1977 to 1982, followed by hotels, which had a 15.5 percent growth rate.
In the District, business services accounted for 16.5 percent of service-sector employment last year, membership organizations employed 14.6 percent, and health services employed 14.5 percent, according to the D.C. Department of Employment Services.
The growth of the service sector can be attributed partly to government purchases of services from local vendors, Fuller said. In fiscal year 1984, federal purchases from local firms for goods and services totaled $7.7 billion, double the amount in fiscal year 1979.
Within the service economy, tourism cuts across several subsectors and is the second-largest industry after the federal government, according to the Greater Washington Board of Trade. In 1984, 17.2 million tourists, conventioneers and business travelers spent more than $1 billion in the area, the board said.
Tourism's vitality is illustrated by the dramatic increase in the number of new hotels that have sprung up in the area. Since 1980, the number of area hotel rooms has increased from 34,000 to 42,000.
"It's a tremendous increase," said Marie Tibor, director of tourism at the Washington Convention and Visitors Association. Over the next five years, the number of hotel rooms is expected to increase to 50,000, the association said.
Last year, in the District, The Ritz-Carlton hotel on Massachusetts Avenue added 100 rooms, the 416-room Westin Hotel opened at 24th and M streets NW, and the 189-room Park Terrace (formerly Executive House) opened on Rhode Island Avenue NW.
In the suburbs, the 500-room Radisson Mark Plaza hotel in Alexandria opened last May, the 267-room Embassy Suites Hotel in Crystal City opened last August, and the 383-room Hyatt Regency Bethesda opened last November. The 233-room Park Hyatt hotel at 24th and M streets NW is expected to open in July, and the 394-room Willard Hotel at 14th Street and Pennsylvania Avenue NW is slated to open in September.
"This is a great concern for us," said Austin G. Kenny, executive vice president of the convention and visitors association. "With the proliferation of new hotels, can we find new customers as fast as hotels get built?"