Shutdown costly for industry

By Michelle Baran

Mather Point - Grand CanyonAs the U.S. government got back to business last week, the travel and tourism industry assessed its losses and began to look at ways to minimize the impact of any future federal government shutdown.

In a letter to President Obama and Congress earlier this month, the U.S. Travel Association estimated that a partial government shutdown would cost the country $152 million a day in lost travel-related activity. With the shutdown lasting 16 days, the expected losses would total more than $2.4 billion.

As a result of the shutdown, the U.S. Department of the Interior said it had no choice but to close all 401 national park units and furlough more than 20,000 National Park Service (NPS) employees. Approximately 3,000 employees were exempted from the furlough to ensure property protection and human safety at the sites.

Domestic tour operators and travel suppliers with product and itineraries that depend upon the national parks, monuments and museums reported suffering heavy losses as a result of the closure of those sites.

NPS data indicate that in October, the parks typically welcome more than 700,000 people per day and generate an estimated $32 million per day in visitor spending.

The losses to destinations that depend on the parks to attract visitors grew so great during the shutdown that the states of Utah, Colorado, South Dakota, Arizona and New York decided to reach into their own coffers to reopen some of the most popular parks and federally funded sites for as long as the government remained closed.

New York Gov. Andrew Cuomo set aside $61,600 per day to pay the salaries of NPS personnel who were needed to keep Liberty Island National Park open during the shutdown, enabling the Statue of Liberty to reopen on Sunday, Oct. 13.

That same weekend, Utah Gov. Gary Herbert reopened his state’s five national parks, Cedar Breaks and Natural Bridges national monuments and the Glen Canyon National Recreation Area at a cost of $166,572 per day.

Similarly, Arizona Gov. Jan Brewer negotiated an agreement with the U.S. Department of Interior to reopen Grand Canyon National Park using state and local funds. The state paid the NPS $93,000 per day to reopen the Grand Canyon and maintain park operations for up to seven days.

Reimbursement unlikely

Whether or not the states will be able to recuperate any or all of those funds remains unclear. They were reportedly allowed to finance the reopenings based on the understanding that they likely would not be reimbursed once the shutdown ended. But the state of Arizona said last week it was urging its congressional delegation to secure reimbursement of all state dollars used to reopen the Grand Canyon.

However, Cuomo said that would require legislation.

“These payments will not be reimbursed unless Congress passes a law to provide refunds to individual states,” Cuomo said in a statement.

On Oct. 16, the House Natural Resources Committee and the House Oversight and Government Reform Committee held a joint oversight hearing titled “As Difficult as Possible: The National Park Service’s Implementation of the Government Shutdown.” The gist of the committee’s action, however, was to blame the Obama administration and the National Park Service for being what Republicans on the committee described as overzealous in the shutdowns.

Committee Chairman Doc Hastings (R-Wash.) stated that open-air parks and memorials had been physically barricaded in “an attempt to make the shutdown as painful and visible as possible.”

NTA calls for better communication

National Tour Association (NTA) President Lisa Simon testified at the hearing, communicating the challenges the travel industry faced in managing the shutdown.

“Neither NTA nor its tour-operator members were advised about what park units would be closed during the shutdown,” Simon said. “Upon closure, it was difficult to locate information on what was closed, including roads through and around federal lands.”

Shutdown hearingShe ticked off myriad issues the domestic travel industry had faced during the shutdown, including having to provide customers with refunds, canceling departures, being forced to find alternatives to the shuttered national sites, canceling bookings at national park-based hotels and restaurants, postponing trips and having to make alternative travel arrangements to accommodate any changes.

Simon asked that in the future, the government better communicate plans that would so severely impact the industry.

“We recognize that it’s impossible to predict whether or not there will be an actual government shutdown, as negotiations can go into the final moments, as they did in this case,” Simon said. “However, we recommend that there be a communications plan that pushes out information to the travel trade and the public.”

More battles ahead

Immediately following the news that Congress had reached a bipartisan agreement to reopen the government and lift the debt ceiling, U.S. Travel called on the industry to remain vigilant.

In an email to industry members, Candice Knezevic, grassroots and industry relations director for U.S. Travel, reminded them that the compromise reached last week only funds the government through Jan. 15, at which time the country could face a similar crisis.

“A long-term solution from political leaders is needed that keeps the government open beyond January and keeps travel working for America,” Knezevic wrote. “We must continue to advocate for a solution beyond the New Year so that we do not find ourselves in this same position again in early 2014.”

At least one tour operator seized the end of the shutdown as an opportunity to market domestic itineraries anew.

Just hours after Congress passed legislation that ended the shutdown, the Globus Family of Brands issued a release encouraging travelers to book domestic travel “now that the government shutdown is over,” and followed that advice with a list of suggested tours.
 

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