15th Oct 2013
When people discuss the shutdown of the Federal Government and the soon-to-follow debt ceiling crisis, neither of which seem to have a happy ending due to the implacable positions of each political party, the discussion tends to focus on those directly affected by the shuttered government: the Federal employees who have been furloughed, often without pay. When it comes to considering non-Federal businesses, the focus is also usually on Washington D.C., which has been described as a “company town” because the vast majority of its residences make their living from the Federal Government.
The fact is, however, that the tendrils of economic suffering lacing out from the shutdown crisis are being felt all across the country. One of the industries being hardest hit is the hotel industry.
According to the U.S. Travel Association, the government shutdown is costing the country’s economy $152 million per day due to lost travel-related activity. Furthermore, the shutdown is directly or indirectly affecting almost 450,000 U.S. workers.
Recently, the American Hotel & Lodging Association (which counts Best Western International, Hilton Worldwide, Hyatt Hotels and Resorts and Marriott International as members) wrote an open letter to Congress and President Obama begging for a resolution to the shutdown, writing that it “respectfully urge[s] Congress and the President to reach an immediate agreement to fund the government and establish a degree of economic certainty to allow for continued growth.”
The letter goes on to estimate that hotels across the country are losing as much as $57.6 million for each week of the shutdown. The main reason for the losses is canceled travel plans because the shutdown has forced national parks across the country to shut their gates.
And it’s not just hotels that are suffering dramatic losses as people cancel travel plans – the communities surrounding national parks and monuments are losing out on all the revenue that tourism brings, from hotel taxes to service industry revenues and souvenirs. The losses for these communities are estimated at $76 million a day.
While there is light at the end of the shutdown tunnel, for some hotels and communities the damage has been done and their tourist season is doomed to be a poor one. Add to that the fact that any short-term refunding of the government only brings the nation to the next crisis – the debt ceiling debate – and confidence remains at an all-time low that these losses can ever be made up, or that tourism will recover once things go back to normal. The concern is that families that spent money and time planning a vacation only to have their destination closed to them may not take the chance again next year, and make other plans.