How the Government Shutdown is Impacting the Hotel Industry

It’s not just government workers that are being impacted by the protracted government shutdown.

The hotel industry is also suffering the consequences, according to a new report from Bloomberg. Washington D.C. hotels, in particular, are feeling the pinch from the impasse on Capitol Hill.

March is typically a busy month for hotels in Washington D.C., thanks to better weather, the famed blooming of the cherry blossoms and the influx of government contractors arriving to pitch goods and services to federal agencies.

But this year it may turn out to be a bust.

That’s due in large part to the national parks being closed and contracting agents being furloughed, according to Bloomberg.

The news organization reported that group travelers who typically book blocks of rooms in advance may take their business elsewhere rather than waiting to see if the government reopens.

Decreased bookings, in turn, may trigger hotels to send home some staff. In other words, the effects of the shutdown will be impacting an increasing number of people.

“You don’t go to Disney if the rides are closed,” Jan Freitag, a senior vice president at lodging data provider STR, told Bloomberg. “Events organized by the government or by groups doing business with the government will be postponed or not happen. School groups that had bake sales to fund a trip aren’t going to come.”

Washington D.C. is just one example of how the hotel industry may suffer while government contractors remain home rather than hitting the road, and leisure travelers rethink their plans while airport security takes a hit.

“We believe investors (and hotel operators) likely continue to underestimate the demand impact of the partial government shutdown, and we expect the shutdown to become more impactful over time,” Michael Bellisario wrote an analyst at Robert W. Baird & Co., wrote in a Jan. 16 research note, reported by Bloomberg.

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