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The Street
The Street
Veronika Bondarenko

A federal government shutdown would cost the travel industry an obscene amount

Those who follow the news out of Washington, D.C. know that a federal government shutdown could be on the horizon.

For government services to continue operating as usual, Congress needs to pass a short-term spending bill before the new fiscal year begins on Oct. 1. At the moment, House Speaker Kevin McCarthy has not managed to find a resolution that would satisfy the far-right Republican members blocking the 8% budget cuts proposed by the wider GOP.

Related: Elon Musk is frustrated about a major SpaceX roadblock

If an agreement cannot be reached in time, the government shutdown to follow would affect not just federal offices and certain post and social benefit services but also everything from passport processing and visa application services to funding for the Federal Aviation Administration (FAA),  Transportation Security Administration (TSA) and Custom Border Protection (CBP) agencies.

Rep. Kevin McCarthy (R-CA) speaks during a weekly news conference on Capitol Hill in Washington, DC. (Photo by Alex Wong/Getty Images)

Alex Wong/Getty Images

'Each day that passes will cost the travel economy,' Travel Association sounds alarm

While one should not expect to see empty airports (air-traffic controllers, TSA agents and customs officers are all considered essential and would continue working as usual), those waiting for a U.S. visa or new passport will almost certainly be affected as those services would be on hold until an agreement is reached. Passport processing times are already at a record-high 10 to 13 weeks due to high demand amid the boom in post-pandemic travel.

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While airports themselves will still be operational, any hiring or training of new TSA or FAA workers would also be put on hold at a time when the industry is dealing with a dearth of staff and desperately trying to accelerate recruitment of new workers. 

According to an estimation by the U.S. Travel Association, both the direct and indirect impact of a shutdown would cost the U.S. travel industry $140 million per day in lost profits.  The estimate also takes into account an Ipsos survey finding that 60% of travelers would put off a trip scheduled during a shutdown.

"Each day that passes will cost the travel economy $140 million, an unacceptable prospect that Congress must avoid before the clock runs out and the damages mount," U.S. Travel Association President and CEO Geoff Freeman said in a statement. "The federal government is already failing the traveler — a shutdown would be further proof of Washington's inability to find reasonable solutions to problems that affect Americans nationwide."

Travel industry urges Congress to act, prevent 'completely avoidable situation'

While any losses related to delays and lost productivity are almost impossible to pin down definitively, any bottleneck in integration of new staff as well as low morale among current ones who will be going in to work without pay until the shutdown is over is sure not to help with the record lines and crowding currently seen at airports across the country. Even as things stand, many airport workers are complaining of understaffing-related burnout.

As such, Freeman strongly urged Congress to do what it can to come to an agreement before the Sept. 3

"This completely avoidable situation threatens livelihoods and jobs across the U.S. economy," Freeman said. "Ultimately, travelers, businesses and workers will pay the price if lawmakers fail to enact a stop-gap funding bill."

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