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Tourism’s Shared Pain of the Shutdown

October 8, 2013

As the U.S. government shutdown swings into a second week, people in tourism destinations and related businesses are feeling the financial pain. In a survey conducted by the National Tour Association, four out of five members report that business is affected by the shutdown. With only 10 percent of members providing a dollar figure for lost revenues, estimates of economic loss already exceed $14 million since last Tuesday.

Most tour operators (82 percent) have made changes to tour itineraries to cope with closed national parks, museums and monuments. Nearly half (46 percent) have had customers cancel because of the closures, and more than a quarter (26 percent) have been forced to postpone tours until the federal government reopens its popular attractions.

“This survey shows just what you’d expect to see by the abrupt closure of America’s immensely popular attractions—tourism is suffering because of the shutdown,” said Lisa Simon, NTA president. “Our members are hurting—from Alaska to the Virgin Islands—wherever federal sites are shuttered. When you shut off a significant portion of the travel industry’s $2 trillion economic impact, you’re hurting a significant number of people who rely on revenue from tourism.”

The tour company owned by NTA’s board chairman, Mark Hoffmann, is facing financial loss and interrupted tours across the nation. “One group couldn’t visit the Flight 93 National Memorial in Shanksville, Penn., this week; another had to be rerouted and rescheduled around park sites in Arkansas next week and a third had to deal with a partially open Ronald Reagan Library in L.A.,” said Hoffmann of Sports Leisure Vacations in Sacramento, Calif. “And in 10 days, I will see $11,000 in lost profits on a Yosemite trip.”

More than half (57 percent) of the tour operators who responded said they have refunded deposits for tours, while nearly all (85 percent) are scrambling to find alternative attractions and activities.

“Even though Congress can’t work together to re-open our national parks, we’re still working to showcase our nation’s natural treasures to customers,” said Michele Michalewicz, owner of Utah-based Western Leisure Tours. “We’re substituting incredible state parks and other attractions and using alternative routes to view the national park scenery our passengers paid for.”

Throughout the country, NTA members are working together to keep group tours moving, said Simon. “Many hotels and motorcoach companies are adjusting cancellation policies, and our members who manage destinations are helping tour operators rewrite itineraries and find attractions that are open.”

Destination DC has been collaboration central, according to Elliott L. Ferguson, president and CEO of the organization. “Our staff and members are assisting operators with rebooking and changing components for tours affected by the government shutdown, working one-on-one to welcome groups,” he said. “The strong collaborative spirit between our members allows operators to engage their clients with many of the world-class attractions that make Washington, D.C., an outstanding place for travelers.”

NTA has been collecting information from members and posting their suggestions for alternative activities on the association’s homepage, NTA leaders have twice gone out to members and asked them to contact their elected officials in Congress and ask for a resolution to the budgetary impasse. Every day of the shutdown is a day of more lost business, said Simon.

“We’re seeing tremendous cooperation and a wealth of substitute activities, but tour operators are incurring steep costs,” she said. “Not only are they issuing refunds and paying for re-routed tours with unanticipated costs, they are not able to finalize future tour arrangements, something they’d normally do during the fall. This shutdown will hurt business well into the future.”

Even with the help of colleagues, times are tough for travel professionals, according to Hoffmann. “Many of us are small companies in the business of making dreams come true for seniors, students, adventure seekers and others,” he said. “But the shutdown is ruining those dreams—and our business.”

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