Washington, D.C.’s tourism office is having a rough week. Between dealing with disappointed visitors and canceled trips, promoters are busy trying to convince the public that there’s still plenty to do in the capital, even if the steps of the Lincoln Memorial are closed. “There’s a degree of confusion,” says spokeswoman Kate Gibbs. “It’s exceptionally painful to not be able to invite people to stand in the spot where Martin Luther King gave his ‘I have a dream’ speech.”
The first government shutdown in 17 years is costing Washington a fortune. One local economist estimates the metropolitan area is losing $220 million each work day the government is shuttered. Hotel rooms are going empty, eighth-grade pilgrimages are being put off and the transit authority has shortened the subway trains as furloughed federal workers stay home. Officials won’t have statistics about the full economic impact of the shutdown until long after the crisis is over, but the effects aren’t just about the total amount of lost revenue or metro riders.
“There’s a psychological hangover,” says Stephen Fuller, director of the Center for Regional Analysis at George Mason University. Even when federal workers head back to the Capitol, he says, misgivings about doing business in one of the country’s most iconic cities will persist. The current shutdown, brought on by partisan gridlock over the budget, comes on the heels of the 2011 debt-ceiling debacle, the continuing sequester and 26 consecutive months of federal employment decline. “Uncertainty,” he says, “is sort of the new normal for Washington, and it makes people uneasy.”
Right now, the people feeling the most dramatic effect are retail businesses that have lost their regular flow of customers, like food vendors around the Mall with no lines in front of their carts or Segway tour guides with no tourists to show around town. But if the shutdown lingers, the loss of spending from stalled federal contractors and furloughed workers will have more widespread effects. “The reality of not getting paid will become real,” Fuller says. “These folks will not be shopping. They’ll be cutting back.” Add up those workers and the people dependent on those salaries being spent, and Fuller estimates that 700,000 local jobs will be taking a hit.
Solomon Keene, president of D.C.’s major hotel association, says that the majority of their 95 members are already seeing decreased bookings on the third day of the shutdown, with fewer people flying in to do business with the government. A North Carolina bus trip organizer who had to cancel 12 tours estimates that the city’s hotels will lose $85,000 from those trips alone. Meanwhile, hotel job creation has been stunted by the budget standoff. “One of the larger considerations is the uncertainty, not knowing how long it’s going to be,” Keene says. “The longer duration of the shutdown, the bigger the impact on our members.”
Effects are rippling throughout local economic sectors ranging from transportation to entertainment. The Washington area transit authorities announced on Wednesday that with ridership down about 25%, subway trains would be limited to six cars rather than the usual eight. The National Gallery of Art’s first show of Byzantine art, originally set to open this weekend, will likely be delayed. Restaurants, which helped minimize the shutdown effect by drawing out furloughed workers with free food and drink offers, are still seeing lighter dinner service and more cancellations, per D.C’s restaurant association. And Ford’s Theater, where Abraham Lincoln was assassinated, has canceled performances of The Laramie Project. The venue is a historic site run by the National Park Service, so it’s out of commission.
Like restaurants offering “shutdown specials,” organizers at Ford’s Theater are also trying to make lemonade from the bitter fruits of political infighting. The First Congregational United Church of Christ, located a block from the theater, has donated space for the show to go on. So while paid performances have been canceled, the theater troupe will be putting on two free shows on Oct. 4 and Oct. 8., with the program aimed at promoting “tolerance, equality and acceptance.”
The economic impact on DC, if painful, isn’t yet catastrophic. According to Fuller, the current toll for Washington-area businesses is roughly equivalent to a couple of snow days. Work among federal contractors could be made up. Federal employees could get back pay. It’s unlikely, he says, that the shutdown will leave a permanent mark on the national or local economy. Still, “there’s some longer-term damage to one’s general confidence. Investors may think differently about how they invest their money. Employers might not hire as readily,” he says. “It has a longer effect than just this event.”