Topline
U.S. tourism officials are warning that the looming government shutdown would cost the economy $1 billion per week—not to mention the disruption to air travel, national parks and related services.
The U.S. travel economy risks losing $1 billion a week in a government shutdown due to disruptions in air and rail travel and the closure of national parks and museums, according to Tourism Economics, a division of Oxford Economics.
The U.S. Travel Association sent a letter to Congress Thursday, urging lawmakers to avoid a “wholly preventable blow” to America’s $1.3 trillion travel economy.
The projected losses during a shutdown would be on top of a projected decline of $29 billion in visitor spending in 2025 due to a combination of fewer international visitors and sagging domestic travel demand in a weaker economy.
The federal government is funded through Tuesday, Sept. 30, and without a stopgap budget, many operations would be halted on Oct. 1. Prediction markets Kalshi and Polymarket project a 66% and 69% chance of a shutdown, respectively.
It depends how long the stoppage lasts. Historically, shutdowns of a few days have had minimal impact, while longer lapses have greatly disrupted the U.S. air travel system. Nearly nine in 10 Americans (86%) believe a shutdown would inconvenience air travelers and 60% say they would consequently avoid flying, according to an Ipsos survey commissioned by the U.S. Travel Association this month. While Federal Aviation Administration (FAA) employees, including air traffic controllers, and Transportation Security Administration (TSA) officers are designated as essential government workers and would therefore be required to work during a shutdown, they would do so without immediate pay, which has traditionally tanked morale and led to absenteeism and other forms of protest. As the 2019 government shutdown dragged on, for example, hundreds of TSA screeners called in sick, leading to flight delays and longer screening lines. A shutdown would also hamper the Federal Aviation Administration (FAA)’s much-hyped “hiring supercharge” of air traffic controllers, which is already plagued by a shortage of training instructors. Finally, a shutdown would temporarily close the FAA’s Aircraft Registry, which would delay aircraft purchases and deliveries. During the 2013 government shutdown, the General Aviation Manufacturers Association reported delays of more than 150 aircraft deliveries valued at $1.9 billion. The FAA needed months to clear the backlog of delayed registrations.
During past government shutdowns, the majority of national parks have closed though state governments have sometimes stepped up with funding. During the 2013 government shutdown, the 16-day closure of national parks and monuments resulted in roughly $500 million in lost tourism dollars, according to a report by the Office of Management and Budget, “even after taking into account the 13 parks that were re-opened using state funds after more than a week of being shut down.” In 2018 and 2019, state funding allowed some national parks to remain open, but services such as trash collection and restrooms were often unavailable. The economic hit of closures tends to be felt most sharply by local communities surrounding national parks.
It has been a disappointing year for the United States tourism industry, which entered 2025 expecting an increase in both travel demand and visitor spending. But inbound travel from international visitors is significantly down in 2025 due largely to geopolitical tensions that spawned an eight-month travel boycott by Canadian tourists and a summertime drop in lucrative Indian tourists, as U.S. President Donald Trump and Indian Prime Minister Narendra Modi sparred over tariffs, Russian oil and who should get credit for a ceasefire between India and Pakistan. Reflecting the overall K-shaped economy, U.S. domestic travel demand is starkly bifurcated, with wealthier Americans generally maintaining their travel plans while lower-income travelers pull back on spending—a pattern seen across the travel landscape, from airlines to hotels to theme parks, and one that is expected to persist beyond the end of the year. “Even though 2026 is going to be better than this year, it’s really still going to be a very bifurcated economy,” Ryan Sweet, chief U.S. economist at Oxford Economics, said this week on a Zoom call with members of the travel industry.
“High-income households are going to do very, very well. Lower-income households are going to remain under a lot of pressure,” Sweet said in the call with the travel industry this week.
Whether Congress will pass spending bills that would keep the government open. Senate Democrats blocked a Republican bill that excluded enhanced Affordable Care Act subsidies and did not restore crucial Medicaid funds. President Trump cancelled a meeting Thursday with Democratic leaders Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, claiming no meeting “could possibly be productive.”
White House Budget Office Threatens Mass Firings If Government Shutdown Happens (Forbes)
U.S. Tourism Will Lose Up To $29 Billion As Visitors Plummet Amid Trump Policies (Forbes)