Government shutdown costs hotel industry hundreds of millions of dollars, puts jobs at risk

Millions of hotel workers face an uncertain future ahead of the holiday season as a prolonged government shutdown takes its toll on the industry.

Dozens of industry associations representing hotels across the country wrote a letter to House and Senate leaders, urging them to end the government shutdown, which has entered its 28th day.

For every day that the shutdown continues, 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, AHLA estimated the hotel industry had already lost $650 million in business. About 9.2 million jobs are supported by the American hotel industry.

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An industry insider told FOX Business that there is a lot of uncertainty among those in the industry as hotels, especially those that rely on business from government travelers, see a decline in traffic.

However, the AHLA stresses that the consequences of the lockdown are far-reaching across the tourism and hospitality sectors far and wide.

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“The hotel industry is seeing an estimated $650 million in business losses, and with the holiday season upon us, uncertainty translates into lower consumer confidence, delayed travel-related decisions and even cancellations,” Rosanna Maita, CEO of AHLA, told FOX Business, adding that the hotel industry is vital to the strength of the US economy.

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

Dozens of industry associations representing hotels across the country wrote a letter to congressional leaders urging them to end the government shutdown. (Istock)

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

It’s not just hotels that are affected by declining guest numbers; Surrounding communities are also affected. For example, for every $100 someone spends on lodging, hotel guests spend another $234 during their trip, according to the AHLA.

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Even the most resilient businesses cannot thrive amid prolonged uncertainty, Laura Lee Blake, CEO of the Asian American Hoteliers Association, said in a statement.

Hotels generate more than $894 billion in GDP annually. (Getty Images)

“The impacts of this closure extend from front desks to entire communities,” Blake said. “It is time for congress to replace inertia with momentum — for the benefit of our economy, our workforce, and the millions of travelers who depend on a strong, stable hospitality industry.”

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White House spokesman Taylor Rogers echoed this sentiment, noting that the longer the shutdown continues, “the economy and critical industries, such as tourism and hospitality, will be harmed.”