District Calculates $100 Million Loss Due to Shutdown

Posted October 22, 2013 at 3:21pm

A flashy 60-second tourism video, set to pulsing club music, kicked off the D.C. Council’s monthly breakfast meeting with Mayor Vincent Gray on Tuesday, but the focus later shifted to how the federal government shutdown briefly sucked the life out of the city’s hospitality industry — and how to prevent it from happening again.

“We need to be exempted from any future shutdowns,” Gray said. He told reporters that the high national profile of D.C.’s fight for budget freedom during the 16-day shutdown was perhaps the lone positive takeaway from the budget battle. “No one would have planned it that way, but frankly, it served an important purpose for us.”

The mayor characterized the political future of the broader budget autonomy question as unclear. But the economic impact of having local funds entangled in the federal appropriations showdown was obvious and significant. The city calculates the shutdown cost it more than $100 million in lost economic activity during the 16 days of the shutdown, even counting the back pay that federal workers will receive.

“It hurt us, and this is money we can’t get back,” said Victor L. Hoskins, who serves as deputy mayor for planning and economic development, in reference to the blows to hospitality and tourism.

Estimates show a 7 percent decrease in restaurant traffic during the first week of October, compared to the same period last year. There were 13,000 fewer hotel bookings in the District that week, amounting to an 8.3 percent drop from 2012, according to figures from the city.

It’s an especially hard blow, given the strong trend the city carried into October, according to Hoskins. The industry is D.C.’s second-greatest revenue generator.

Gray worries the fallout will continue, despite the fact that the city’s federal monuments and museums reopened on Oct. 17 under the terms of a short-term continuing resolution.

“People don’t just suddenly change their behavior after something like this ends,” he said. “There were people who might have been planning their trip, and they took a trip somewhere else now so they won’t come to the District of Columbia. … They may simply have chosen to go somewhere else not knowing when this would end.”

Destination DC, a private nonprofit that last year received $3 million from the city to promote it as a destination, showed Gray and the council the “DC is Open” marketing campaign it launched 10 days into the shutdown to highlight a variety of spots that remained open, in contrast to the federal museums, monuments and the Capitol that were closed to tourists.

Elliott L. Ferguson, president and CEO of the nonprofit, described the campaign as a short-term solution to the common perception that the city was closed, showing off nightlife, restaurants and sports franchises.

“We certainly couldn’t have operated like this over multiple months,” said City Administrator Allen Y. Lew. “We were able to hold out for a few weeks.”

D.C. won the authority to spend its local budget and remain open through all of fiscal 2014 under the terms of the short-term CR.

On Friday, the D.C. Council will hold a roundtable to further explore the impact of the shutdown and how the District can be prepared in the future.