D.C. Area Hotels Taking a Hit from Government Shutdown

The partial government shutdown, now the longest ever, is causing a ripple effect in the travel industry, impacting restaurants, hotels, theme parks, airlines and airports to various degrees.

Hotels in the greater Washington, D.C., area are now feeling the sting. As federal workers miss another paycheck, and major attractions like the Smithsonian remain closed, demand has dwindled.

In the region, including the nearby suburbs in Maryland and Virginia, hotel revenue plunged 26 percent in the second week of January compared with the same period last year, according to travel research firm STR. Overall, there was an 8 percent decline nationwide.

Marriott International President and CEO Arne Sorenson said during an interview with Bloomberg Television on Tuesday that the government shutdown is hurting the company in various markets – especially in the company’s hometown of Washington, D.C.

“We have 150 hotels in the greater Washington area. Business there is down double digits since the government shutdown,” Sorenson told the outlet.

The Bethesda, Maryland-based company – which capped off a record year for growth, opening about 500 hotels in 2018 while signing franchise and management agreements with 816 properties – has more exposure in the area than some of its competitors.

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.”

The shutdown is costing the tourism industry more than $100?million a day, according to an analysis by the U.S. Travel Association. It includes nearly $50 million a day in direct domestic travel spending and more than $50 million in indirect and induced travel-related output, according to the trade group.

The travel and tourism industries generate about $1.6 trillion in U.S. economic activity — one-twelfth of the economy — and one in 20 jobs, according to the Commerce Department.