Hotels fret over expected government travel slump due to sequestration

Hotels are facing the loss of one of their most lucrative business segments—government travel—as sequestration gets underway.

Automatic spending cuts in effect across all government agencies have included the slashing of all non-essential travel by federal employees. The order to halt travel already has hit the hotel industry.

It’s unclear precisely how big a slice of business the federal government is for hotels, though sources agreed it makes up a substantial piece of the pie. In 2011, the most recent data available, federal, state and local governments spent $30.3 billion on travel, said Erik Hansen, director of domestic policy with the U.S. Travel Association.

The travel sector could become one of the most impacted by sequestration because “almost every (federal) department travels,” Hansen said.