Shutdown Fallout: When Government Breaks Down, the Hotel Industry Suffers
Written by admin on January 9, 2026
The federal government reopened on Nov. 13 after 43 days, the longest shutdown on record. What was once unthinkable has become, if not routine, a prospect that businesses must plan for in the same way they plan for natural disasters—on a scale not just local or regional, but nationwide. AHLA estimates that the shutdown cost the U.S. economy $31 million a day in hotel-related economic activity alone, for a total of more than $1.2 billion by the time it ended. US Travel calculated the total cost to the travel and hospitality industry overall at $6 billion.
These losses were not gradual; they were immediate. The closure of national parks and federal worksites meant canceled or postponed family trips, vacations, and conferences, with the corresponding loss of business for hotels, restaurants, retail businesses, and services in those areas.
Economic Impact
Oxford Economics reported shutdown-related losses of at least 1 percent of demand for both airlines and hotel brands, with Washington, D.C.-area hotels especially hard hit. According to an AHLA survey of hotel operators and owners, 64 percent of those responding said they’d seen reduced revenue, and 63 percent saw a decrease in government travel during the shutdown. More than half reported declines in business and leisure travel. A national Morning Consult poll of U.S. travelers found that the shutdown affected future travel plans for 40 percent of respondents.
As the shutdown continued, the entire travel ecosystem began to break down. The Federal Aviation Administration’s mandatory reduction of flight schedules caused cancellations and delays affecting millions of passengers, with residual effects that lingered for days after the government reopened.
For too many businesses, the effects of the shutdown will be irreversible. As an industry that depends on transient guests, hotels are especially vulnerable to unexpected cancellations. Hotels will never recover those six weeks of lost revenue. One midscale hotel in the Southeast, serving a military community, lost nearly $200,000 in conference business alone. Losses like that can make the difference between survival and failure for a small business and will certainly affect future plans.
AHLA, with our colleagues across the hospitality industry, warned Congress about the effects of a potential shutdown and kept up constant pressure for resolution in private meetings, public statements, letters, and press conferences. While we hailed the government’s reopening, we’ve made it clear that American consumers and businesses need more certainty. In testimony before the House Energy & Commerce Subcommittee on Commerce, Manufacturing, and Trade last month, AHLA President and CEO Rosanna Maietta urged Congress to pass a long-term funding bill before the current continuing resolution expires on Jan. 30.
“Even the threat of a shutdown destabilizes the industry, suppressing demand and making it impossible for travel businesses to plan ahead,” Maietta noted. “The American people deserve a stable and predictable budgeting process that supports, rather than interrupts, the economic activity generated by travel and tourism.”
Next year offers extraordinary opportunities for the U.S. hotel industry nationwide, from the FIFA World Cup to the America 250 celebrations around the nation’s semiquincentennial. It’s critically important that Congress provide the certainty travelers need to plan the trips of a lifetime, and hoteliers need to prepare for those visits.
