THE ONGOING FEDERAL government partial shutdown is impacting the hospitality and travel industries, and the effects will get worse as it goes on, industry associations say. Those effects range from reductions in federal employees’ travel to the shuttering of the agency that approves small business loans.
As the shutdown entered its 21st day, and for around 800,000 federal workers the first payday they will not receive a check, negotiations between President Trump and Democrats in Congress of the president’s insistence that Congress fund his border wall were no closer to a resolution, according to media reports. In a statement, AAHOA President and CEO Chip Rogers said the shutdown also closed national parks and forced essential personnel at agencies like the Transportation Safety Administration to work without pay.
“Travel expenses for employees at affected agencies cannot be paid during the shutdown which means less revenue for the hospitality sector. Many of our national parks and museums are closed, and hotels surrounding them will see dwindling occupancy rates which impact hoteliers, their employees, and their families,” Rogers said. “Visitors to our parks spend an average of $20 million per day in neighboring communities, but with the parks closed, that money stays home. Furloughed government workers will likely postpone or cancel leisure travel. Even travel itself will become increasingly frustrating as more unpaid TSA employees and air traffic controllers call in sick.”
The shutdown could cost the U.S. economy more than $100 million a day in losses to the travel industry, according to the U.S. Travel Association. That includes about $50 million in direct reductions in domestic travel reductions as well as $50 million in indirect expenses, such as the closing of national parks.
“The figure assumes that the shutdown has not affected Customs and Border Protection operations, visa processing or air transportation, though there were news reports Monday that those systems are beginning to feel fallout from the shutdown,” said USTA Senior Vice President for Research David Huether.
Rogers said the shutdown also affects hotel development and job creation because developers cannot finalize needed U.S. Small Business Administration loans, leaving them in “limbo.” The USSBA website page for the loan program has a runner on top saying “Parts of the U.S. Government are closed. This site will not be updated; however information about disaster assistance is available.”
“For small businesses, these loans allow them to get reasonable interest rates, but with the agency shuttered, lenders just won’t complete the transactions,” Rogers said. “We’re talking about an agency that guarantees about 5,000 loans per month, so there’s going to be a significant backlog when the government reopens which will slow the creation of new businesses.”
He went on to say the federal government’s E-Verify system is also shuttered, meaning employers with questions about hiring and employment law do not have access to that resource. That could lead to increases in costs from training unauthorized workers and possibly cause businesses to violate the law.
“Surely there is an answer to both improve border security and re-open the federal government,” Rogers said. “The American people expect leaders from both parties to work non-stop to resolve this issue. Simply walking away from the negotiating table is not acceptable. Americans deserve better.”