Government Shutdown: How DHS Shutdown Affects Hotels and Hospitality Industry

1. Air Travel Disruptions and Hotel Occupancy 

• ⇨ TSA Staffing Crisis: Although 95% of TSA agents are deemed essential and must work without pay, rising "sick outs" and financial strain have led to massive airport delays.

• ⇨ Wait Time Surges: Airports in Atlanta, Houston, New Orleans, and Charlotte have reported security wait times of three to five hours.

• ⇨ Impact on Hotels: Long airport lines and flight cancellations (over 1,000 in a single weekend recently) lead to immediate drops in hotel occupancy, particularly for airport-adjacent and urban "gateway" hotels. 

2. Revenue and Economic Losses

• ⇨ Daily Financial Toll: The American Hotel & Lodging Association (AHLA) estimates that a shutdown costs the U.S. economy $31 million per day in lost hotel-related activity alone.

• ⇨ Travel Sector Total: The U.S. Travel Association calculates the broader impact on the travel and hospitality industry at roughly $140 million per day.

• ⇨ Washington, D.C. Market: Hotels in the capital have seen occupancy fall by nearly 9%, as government-related business travel, conferences, and contractor activity have effectively ceased. 

3. Operational and Service Disruptions

• ⇨ Global Entry Suspension: DHS suspended Global Entry and other trusted-traveler enrollment processing on February 22, 2026, to redeploy officers to standard checkpoints. While some services were partially restored on March 11, the disruption has deterred international visitors.

• ⇨ Event Cancellations: Uncertainty has led to the postponement or cancellation of major trade shows and conventions, as travel managers review budgets and postpone non-essential meetings.

• ⇨ Small Business Risk: The nearly 20,000 small-business-owned hotels in the U.S. are most vulnerable to these sudden shifts in consumer confidence and booking volatility. 

4. Status of Recovery Efforts

• ⇨ Current Deadlock: As of March 12, 2026, the Senate remains deadlocked on a funding bill passed by the House on March 5.

• ⇨ "Pay Federal Aviation Workers" Campaign: In response to the crisis, a coalition including AHLA, U.S. Travel, and Airlines for America launched a national campaign on March 5 to urge Congress to ensure TSA and FAA workers are paid regardless of future shutdowns to protect the travel economy.