Government Shutdown Having Real Economic Impact on Travel Industry
Two weeks ago when the government shutdown began, we shared what the projected impact could be. Now, on day 15 of the shutdown, it continues to dominate headlines and we are seeing the real impact on the travel, tourism, and hospitality industry:
- Gettysburg Battlefield Tours will miss 2,500 visitors and see a drop in revenues of some $20,000 due to park road closures. Five to seven employees will be laid off or are at risk of lay-offs.
- The shops and restaurants at Acadia National Park in Maine expect to lose $40,000 each day of the shutdown. The entirety of the 60-person staff will be laid off.
- Mount Rainier National Park in Washington expects to lose $200,000 in revenue per day and be forced to lay off 50 employees well before the normal end of the high season.
- Mount Rushmore National Memorial in South Dakota estimates that one week of closure (October 1 through October 8) will impact 49,000 visitors, costing $247,095 in lost sales and putting 38 employees on furlough.
- A ferry company servicing The Statue of Liberty and Alcatraz expects to lose $2 million in total revenue (ferry fees in addition to retail spending such as food and souvenirs) and need to lay off 200 employees.
These are just some of the stories being collected by the US Travel Association.
Major industry associations also continue to weigh in on the shutdown, releasing new analysis and studies last week showing the real impact and losses being experienced by US businesses that rely on travel and tourism, America’s top services export.
US Travel Association
The US Travel Association released a new analysis last Friday that estimates the government shutdown is costing the United States “$152 million a day in economic output due to lost travel-related activity, affecting as many as 450,000 American workers directly or indirectly supported by the travel industry.”
Roger Dow, U.S. Travel President and CEO says “The government shutdown is throttling America’s travel sector, which, until now, has been one of the principal drivers of U.S. economic recovery. Every day the government is shut down is another $152 million down the drain and another day of financial insecurity for as many as 450,000 U.S. workers whose livelihoods are supported by travel. Shutting down the government is damaging, and every day the government remains closed compounds the very real consequences. America’s travel leaders call on the President and Congress to reach an agreement to immediately reopen the government and keep it open.” Read the full press release.
Global Business Travel Association
The Global Business Travel Association (GBTA) conducted a member survey last week and found that 66% percent of respondents “are concerned that a shutdown longer than one week will negatively impact their business, and nearly as many (59 percent) are concerned about the impact on their business from a possible government default.” Additional, about 40% say the shutdown has impacted them, their company and/or their company’s employees.
Michael W. McCormick, GBTA Executive Director and COO says “The shutdown is damaging productivity and leading to lost business opportunities and revenue that can’t be recovered. With two-thirds of our members concerned that the shutdown is negatively impacting their businesses, the wide-ranging impact on this industry is clear. This uncertainty hurts employee morale, holds back business growth and, if not stopped, can easily deliver a serious blow to the overall global economy.” Read the full press release.
National Tour Association
The National Tour Association (NTA) also conducted a survey last week and “82% of member operators said they had made changes to itineraries to accommodate closed national parks, museums and/or monuments; 46% reported customers canceling because of the closures; and 26% said they had been forced to postpone tours until the federal government reopened its most popular attractions.”
The NTA estimated that the economic impact on its 600 operator members, many of which do business in the inbound tourism market, already had exceeded $14 million by midweek last week. Read the full press release.