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Government Shutdown Hurting Biz Travel Industry

  • Published by Vedat
7 in 10 (66 percent) business travel professionals are concerned that the government shutdown longer than one week will negatively impact their business.

liberty-statue-closedIt is one of the results of a new survey conducted by the Global Business Travel Association (GBTA) – the voice of the global business travel industry.

Nearly as many (59 percent) are concerned about the impact on their business from a possible government default. As we near the end of week two of the shutdown, the anxiety only worsens. Roughly 40 percent of respondents say the shutdown has impacted them, their company and/or their company’s employees.

U.S. business travel spending is a major driver of the global economy. Finally surpassing pre-recession levels, U.S. business travel spending is expected to reach $273 billion this year. The government shutdown, however, is severely impacting the business travel industry, creating uncertainty and lost revenue.

“The shutdown is damaging productivity and leading to lost business opportunities and revenue that can’t be recovered,” said Michael W. McCormick, GBTA Executive Director and COO. “With two-thirds of our members concerned that the shutdown is negatively impacting their businesses, the wide-ranging impact on this industry is clear. This uncertainty hurts employee morale, holds back business growth and, if not stopped, can easily deliver a serious blow to the overall global economy.”

The top three ways the shutdown has negatively impacted those in the business travel industry are cancelled meeting or business opportunities in the United States (57 percent), increased uncertainty about the economy (57 percent) and cancelled bookings (50 percent). Also high on the list are cancelled or delayed contracts with government agencies (48 percent), staff reductions due to reduced business activities (32 percent) and increased concern among travelers about airline delays and cancellations due to possible reduced air traffic controllers (29 percent).

The chart below shows examples of the impact of the shutdown provided by survey respondents.

Impact

Example

Lost Employees

“Our company has forced support/administrative employees to take leave until other direct client facing employees return to work.”

“Some of our employees are government contractors who were issued a stop work order. They may not be paid when they get back.”

Cancelled Bookings

“Loss of room night revenue due to cancelled meetings…and loss of room night revenue due to famed attractions being closed.”

Cancelled Meetings

“We do installation for government suppliers and those meetings are cancelled because government orders are stopped for the time being.”

Delays in Passports and Visas

 “Concern it may have impact on ability to get rush Visas, passports for our international travelers.”



GBTA surveyed 257 members in an online poll conducted October 8
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