Government Shut (Up) Down

Just when you thought the most loyal, recession proof, consistent, reliable market segment would never fail you, lawmakers on Capitol Hill rally to prove this theorem wrong.  In what was one of the more embarrassing and disappointing weeks in public policy, Congress’ ongoing struggle to ratify last year’s budget has had rather abysmal affects on the hospitality market, especially for those hotels that have come to rely on government business.

No, the government never did shutdown.  But for more than a month leading up to it, the looming threat of a shutdown had severely hampered government planner’s ability to sign contracts for the immediate future. And even for those contracts well off into the foreseeable future, planners were restricted from moving forward without appropriated funds. 

At a minimum, the immediate effect on hotels was a very noticeable drop off in demand.  However this drop off will more than likely be countered by a very serious increase in demand once budgets pass.  Business has not stopped, it has simply been delayed.

The more ominous affects were for those meetings which coincided with or abutted congress’ delayed budget approval.  For meetings in April of 2011, planners had to nervously watch the news while getting pressure from both sides to pull the trigger on cancelling.  At 4pm on Friday, April 8th, I encountered a group who pulled the trigger on cancelling their meeting for the following week.  Their challenge with waiting until 11pm to learn their cancellation wasn’t necessary was that should the government had shut down, there would have been no easy way to communicate to all the travelers of the cancellation as their emails would no longer be accessible.  Because of this conundrum, the group had cancelled unnecessarily and the work of their meetings team was wasted.  There’s no telling whether the group will ultimately be rescheduled.  And while a government shutdown may have invoked the contract’s Force Majuere clause, the threat of said shutdown is a much grayer area.  Should the hotel decide to enforce their cancellation, no doubt this bill should land at the front door of Senator Reid and Congressman Boehner.  They can split it.

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