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Shutdown hurt travel industry
Faltering » The business bled out $152 million a day, officials report.
First Published Oct 17 2013 09:08 am • Last Updated Feb 14 2014 11:36 pm

The prolonged government shutdown hurt private travel providers from around the United States, forced them to lay off employees and threatened what had been a major bright spot since the Great Recession.

The U.S. Travel Association estimates that the partial government shutdown cost the U.S. $152 million a day in economic output due to lost travel-related activity, and affected as many as 450,000 American workers directly or indirectly supported by the travel industry.

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"The government shutdown is throttling America’s travel sector which, until now, has been one of the principal drivers of the U.S. economic recovery," said U.S. Travel President and CEO Roger Dow. "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."

The business travel industry also expressed concern about the shutdown.

The Global Business Travel Association found that 66 percent of those involved with business travelers are concerned that a shutdown longer than one week will negatively impact their business, and 59 percent are concerned about their business from a possible government default. Roughly 40 percent says the shutdown has impacted them, their company and their employees.

U.S. business traveler expenses were expected to reach $273 billion this year, finally surpassing pre-recession this year. But the government shutdown created lost revenue and uncertainty.

"The shutdown is damaging productivity and leading to lost business opportunities and revenue that can’t be recovered," said Michael W. McCormick, GBTA executive director and chief operating officer. "With two-thirds of our members concerned that the shutdown is negatively impacting their business, 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."

The shutdown hurt the business travel business because of meeting cancellations, increased uncertainty about the economy, delayed or cancelled contracts with government agencies, staff reductions and increase concern among travelers about airline delays and cancellations due to possible reduced air traffic controllers.

The U.S. Travel Association released stories of those in the travel industry across the country who are losing money due to the shutdown.

A Moab guide and outfitter business operator, for example, reported spending time doing nothing but finding ways to re-route tours or canceling reservations due to the shutdown. Four weddings booked for Yosemite two years ago were cancelled. A ferry company servicing The Statue of Liberty and Alcatraz Island expects to lose $2 million in total revenue and considered laying off 200 employees. Mount Rushmore National Monument in South Dakota lost 49,000 visitors, costing $247,095 in lost sales, during the initial week of the shutdown.

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"Policymakers must understand that it’s not just federal employees that are affected by the shutdown," said Dow. "Entire local economies are built around our national parks and historic attractions. We’re hearing from family-owned businesses who have had no choice but to send their employees home, with no idea when or if they will be able to call them back. And unlike federal workers, these workers have no expectation of getting their pay back when the government reopens."


Twitter: @tribtomwharton

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