Tour Operators Welcome an End to the Shutdown – and Brace Themselves

Some tour operators dodged the bullet and received no damage from the partial government shutdown. But for some others, it was a bitter pill that is still caught in their throats.

The shutdown is over until at least Feb. 15, but for now, the wheels are turning again. Federal services are operating again. The national parks and museums are back in action. The TSA and FAA are back to work.

The reactions to the end of the shutdown from tour operators run the gamut. Everyone is glad the shutdown ended. But for some of them, the damage will be sustained.

“We have not seen any positive signs regarding the end of the government shutdown,” said Jack E. Richards, president and CEO of Pleasant Holidays. “It will likely take a week or so for government employees to fully return to work. It is unclear exactly when they will receive back pay and [when customers will receive their] 2018 tax refunds. And the uncertain future of another possible shutdown in a few weeks seems to be making travelers pause about spending on vacations.”

Pleasant Holidays received cancellations from travelers who were concerned about the TSA, airport security and air traffic control, as well as from federal employees who were concerned about spending money in the face of a government shutdown.

“Overall, we believe the lengthy shutdown had a negative impact on our first quarter 2019 bookings and the travel industry as a whole,” said Richards. “The partial government shutdown was during the peak January booking season, which also includes WAVE Season for cruises. The timing of the shutdown could not have come at a worse time in terms of bookings for 2019.”

Among the more fortunate in the wholesale travel tier was Avanti Destinations, a provider of custom-made individual travel packages. Avanti sustained no discernible damage from the shutdown.

“There was no impact on bookings during the shutdown as our clients are three or four months out in terms of travel dates,” said Paul Barry, chairman of Avanti. “Bookings during the last two weeks have set company records. For us, it was a non-event.”

Dan Austin, president of Austin Adventures, said that the biggest effect of the shutdown for his company was a rise in anxiety among his customers.

“The only real impact I am seeing is more interest in travel insurance,” said Austin. “We have always suggested it. Now it seems more are interested. I don’t think we lost any sales. If it would have gone on much longer, that may have started happening. It wasn’t until the news started covering issues with air safety or the TSA that travelers started paying closer attention.”

Ronen Paldi, president of Ya’lla Tours, was one of the lucky ones. Asked if the shutdown hurt Ya’lla’s business, he said, “Not at all, since we notify all of our travelers that they must have a passport valid for at least six months from their arrival date to their destination.”

Unfortunately, Paldi said, for his company, there will be no changes in policy as a result.

Goway, the Toronto-based global operator, did see a drop-off in business from the long reach of the shutdown.

“I had some agents mention that the group wanted to hold off on booking as they were mostly government workers and uncertain of their jobs, so couldn’t commit just yet,” said Emma Cottis, Goway’s general manager of marketing.

“I had one group, which was about to put down the deposit, but then the agent said that it was on hold due to the government shutdown. I have a group traveling in March and she asked me to extend the payment deadline. She works for the government and has an April group and is worried about people canceling. Another contact has an April Thailand group and she works for the government. She has a six-person drop-off and incurred penalty changes.”

Bob Drumm, president of Alexander & Roberts, said that it’s hard to ascertain the overall effect of the shutdown on the very first business day after it ended, “particularly with ‘who knows what’s still coming down the pike.’”

But in spite of the uncertainty, on the first Monday after the end of the shutdown, Alexander & Roberts had a very good day.

“We are having one of our highest call rates in the last two months,” said Drumm. “and perhaps our best booking day. The stock market has stabilized and perhaps it’s also the end of the shutdown, as well.”

In the tour business, uncertainty is something you have to get used to.

“Yes, the uncertainty does affect buying behavior, as always,” said Drumm. “As in many aspects of our industry, it’s hard to counter far-flung and diverse economic/political influences with business policies.”