America’s hotels are feeling the sting as the shutdown keeps rooms empty

• A hotel trade group says the US government shutdown has cost hotels $1.2 billion in lost revenue.

• Flight cancellations and suspended federal travel programs are causing issues.

• Small hotel operators face mounting risks as shutdown uncertainty disrupts the travel industry.

The US government shutdown is gutting hotel bookings.

The hotel industry is estimated to have missed out on more than $1.2 billion in revenue since the start of the shutdown, with about 186,000 rooms sitting empty every night, according to new research.

The prolonged shutdown — the longest in US history and now in its sixth week — is estimated to cost the industry about $31 million per day in activity that would typically be generated by hotel stays.

This analysis was put together by hospitality platform OysterLink and is based on data from the American Hotel and Lodging Association (AHLA), a trade group representing the industry. Business Insider could not independently verify this figure.

OysterLink’s analysis found that the industry has missed out on the equivalent of 6.7 million unbooked room-nights since the shutdown began.

“Every day the government remains closed, hotel operators, especially small and independent ones, face the risk of losing momentum just as travel demand typically picks up,” said Milos Eric, cofounder and general manager of OysterLink, in an earlier press release.

The decline in bookings is being driven by multiple factors tied to the shutdown.

Thousands of flights have been canceled after the Federal Aviation Administration (FAA) ordered airlines to cut 10% of flights at 40 major US airports, disrupting both business and leisure travel.

Meanwhile, federal travel programs remain suspended, eliminating a key stream of government-related hotel bookings.

And with hundreds of thousands of federal workers unpaid or furloughed, consumer confidence and discretionary travel spending have taken a hit — a blow that extends well beyond Washington.

The AHLA, which represents more than 30 industry associations nationwide, warned last month that the shutdown had already cost hotels around $650 million in lost business by October 22.

Rosanna Maietta, AHLA’s president and CEO, said in an earlier statement that the shutdown was having “a devastating impact” on the industry.

“Economic uncertainty and waning consumer confidence are translating into booking cancellations and discouraging future planning — especially as we head into the heart of the holiday travel season,” she said.

The US hotel industry contributes $894 billion to the country’s GDP annually and generates more than $85 billion in state, local, and federal taxes, per the AHLA.

The association estimates that hotels support about 2.1 million direct jobs and nearly 9 million total jobs across the broader travel economy.

With each passing day, that economic engine sputters further — and the industry’s calls for Congress to end the shutdown are growing louder.

“Hotel owners are on the front lines of America’s economy — and every day this shutdown continues, it puts more small businesses and jobs at risk,” said Kamalesh (KP) Patel, chairman of the Asian American Hotel Owners Association, in the AHLA statement.

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