Hotel industry reeling as government shutdown puts millions of workers on edge

Millions of hotel workers are facing an uncertain future ahead of the holiday season as the prolonged government shutdown weighs on the industry. 

Dozens of industry associations representing hotels nationwide penned a letter to the leaders of the House of Representatives and Senate, urging them to end the government shutdown, which is in its 28th day.

Each day the shutdown persists, the American Hotel and Lodging Association (AHLA) estimates that it costs the economy $31 million in lost activity that would have been generated by hotel stays. As of last week, the AHLA estimated that the hotel industry had already lost $650 million in business. About 9.2 million jobs are supported by the U.S. hotel industry. 

BUSINESS GROUPS WARNS GOVERNMENT SHUTDOWN IS ‘HARMING SMALL BUSINESSES AND COSTING AMERICAN ECONOMIC GROWTH’

An industry insider told FOX Business that there is a lot of uncertainty among workers in the industry as hotels, particularly those that rely on business from government travelers, are seeing a drop-off in traffic. 

However, the AHLA is underscoring that the consequences of the shutdown are far-reaching across the tourism and hospitality sectors broadly. 

BESSENT SAYS GOVERNMENT SHUTDOWN ‘STARTING TO CUT INTO MUSCLE’ AND ECONOMY MAY BE LOSING BILLIONS PER DAY

“The hotel industry is seeing an estimated $650 million in lost business and with the holiday season upon us, the uncertainty is translating into declining consumer confidence, delayed decisions on travel and even cancellations,” AHLA CEO Rosanna Maietta told FOX Business, adding that the hotel industry is vital to the strength of the U.S. economy.

It supports approximately 2.1 million direct jobs – one out of every 25 in the U.S. economy – and nearly 9 million total jobs nationwide, according to the AHLA.

Hotels generate more than $894 billion in gross domestic product annually and contribute $85 billion in state, local and federal taxes combined, the AHLA estimated. 

It’s not just hotels that take a hit from a drop-off in guests; the surrounding communities also take a hit. For instance, for every $100 someone spends on lodging, hotel guests spend another $234 during their trip, according to the AHLA.

PREDICTION MARKETS SEE CLOUDY OUTLOOK AS TRADERS BET ON EXTENDED SHUTDOWN

Asian American Hotel Owners Association CEO Laura Lee Blake said in a statement that even the most resilient businesses cannot thrive amid prolonged uncertainty. 

“The ripple effects of this shutdown reach from front desks to entire communities. It’s time for Congress to replace gridlock with momentum – for the good of our economy, our workforce and the millions of travelers who depend on a strong and stable hospitality industry,” Blake said. 

White House spokesperson Taylor Rogers echoed this sentiment, stating that the longer the shutdown continues, “the economy and critical industries, like tourism and hospitality, are hurt.”