Government shutdown leaves area hotels with millions in lost revenue

Area hotels have grown accustomed to mounting cancellations and dwindling group bookings.

But, they say, the 16-day government shutdown that began Oct. 1 may have delivered the worst blow yet.

“This has been the quickest, most dramatic hit,” said Katie Doherty, general manager of the National Conference Center in Leesburg. “Sequestration was detrimental, but the government shutdown was very fast and furious.”

In the District alone, hotels reported 13,000 fewer bookings and a $2 million loss in revenue, Mayor Vincent Gray said. Occupancy rates at area hotels fell 12.1 percent during the first week of the shutdown, according to data from Smith Travel Research.

“Long-term effects of the shutdown remain to be seen, but in the early going, it clearly had an impact on the overall hotel industry,” Brad Garner, the firm’s senior vice president, said in a statement.

Nationally, the hospitality industry lost more than $8 million during each day of the shutdown, as thousands of trips and hotel reservations were cancelled, the American Hotel & Lodging Association said in a letter to the president.

“We’ve been hearing about huge impacts from pretty much day one of the shutdown,” said Vanessa Sinders, senior vice president and department head of governmental affairs at the American Hotel & Lodging Association. “The hotel rooms and meetings that are being cancelled — that’s revenue that’s very hard for hotels to make up.”

At the National Conference Center, there were multiple cancellations by the military, federal agencies and government contractors, Doherty said. Even unrelated bookings such as church retreats were impacted because furloughed government employees were wary of spending money during the shutdown.

“That happened to several of our groups,” she said. “We lost a significant amount of business.”

Government bookings have long been a vital source of revenue for Washington area hotels and convention centers. In fiscal year 2012, the most recent year for which data is available, the District received $38.8 million from government conferences that cost more than $100,000, according to federal filings. An additional $13.8 million flowed into National Harbor, while Leesburg received a $8.8 million boost.

“Government business is extremely important for hotels in the area,” said Elliott Ferguson, president and chief executive of Destination D.C., the District’s marketing office. “Not having that business during the government shutdown has unfortunately hurt a lot of hotels.”

Abha Bhattarai covers local banking, retail and hospitality for The Washington Post’s Capital Business section.
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