The Impact of the Government Shutdown on the Travel Industry

The government shutdown that began at 12:01 am today is dominating all headlines and news broadcasts, and it will have an impact on the travel and tourism industry. 

Tourist Destinations are Closed

In Philadelphia and beyond, many top tourist destinations are closed today.  Visitors to 401 federally funded parks and attractions, including Independence Hall, the Liberty Bell, the Statue of Liberty, the Smithsonian museums, the National Zoo, Alcatraz Island, and all national parks will be disappointed today, as all of these destinations are closed.

Sean Hennessey, spokesman for the National Park Service stated it best:  “It’s going to be a kind of ripple effect.  There’s a significant economic impact that our national parks have in their communities.”

Beyond the destination itself, there are shops, restaurants, hotels, tour operators, etc who rely on tourist business to exist and millions of dollars could be lost to local economies in a shutdown. “The closing of 368 National Parks Service sites resulted in the loss of an estimated 7 million visitors during the 1995 and 1996 government shutdowns,” according to a February 2011 Congressional Research Service report. “Closure of national museums and monuments resulted in the loss of an estimated 2 million visitors and millions of dollars of revenue to the surrounding community.” 

International Travel Impact

Passport and visa services may still be available because fees are collected to pay for these services, however the US State Department has said that these facilities will only remain open as long as the fees are sufficient enough to fund their operation.  During the government shutdowns in1995 and 1996, “between 20,000 – 30,000 applications for visas went unprocessed each of the 27 days the government was halted. Nearly 200,000 U.S. applications for passports went unprocessed, causing millions of dollars in losses for U.S. tourism industries and airlines,” according to the Congressional Research Service report. 

US Travel Association Weighs In

Roger Dow, president and CEO of the U.S. Travel Association, issued the following statement on Monday, September 30:

“While our country’s fiscal course is a crucial issue that understandably inflames passions on both sides of the aisle, Democrats and Republicans should reach an accord to prevent shutting down the federal government. Previous experience tells us that a shutdown unnecessarily disrupts economic activity in communities large and small that depend upon travel spending for employment and tax revenue. The closure of national parks and federal historic sites to millions of travelers—coupled with the general perception of an uncertain travel process—would do serious and immediate harm to the economy.

“Travel, our country’s No.1 services export and an industry that has added jobs at a rate three times faster than the economy as a whole since 2010, is particularly vulnerable to the perception that a disruption of services will make our customer experience go less than smoothly. While we recognize that basic travel functions will continue, we are concerned that federal agencies will quickly be forced to implement shutdown policies that will damage the travel experience and derail long-term, bipartisan investments in our travel infrastructure. We urge our leaders to tackle changes to the federal balance sheet that will let our economic recovery continue unimpeded. The travel industry stands ready to assist with that process in whatever way we can.”