Bed and Breakfast Inns NAICS 721191

Oct 29, 2025 - Hotel Industry Losing Money on Government Shutdown

• The US hotel industry is being significantly affected by the government shutdown, with the American Hotel & Lodging Association estimating $650 million in lost revenue so far, equating to roughly $31 million per day in economic activity tied to hotel stays. Hotels alone directly employ about 2.1 million people, and the broader hospitality sector supports roughly 9.2 million jobs, meaning nearly one in every 25 workers relies on the industry. The shutdown has led to cancellations and delayed bookings from both business and leisure travelers, particularly during the critical holiday travel period. Occupancy rates in markets near federal offices have fallen sharply, and smaller independent properties report financial strain. Industry leaders warn that prolonged shutdowns could create ripple effects across tourism, dining, and local economies that depend on visitor spending. The uncertainty is also affecting hiring and operational decisions, leaving hotels to balance payroll obligations with declining revenue streams while maintaining service standards.
• A recent $9.5 million court settlement between online travel agency (OTA) umbrella company Bookings Holdings and the state of Texas demonstrates a willingness by regulators to crack down on junk fees in hotel bookings. Bookings, owner of OTA sites including Priceline.com and Kayak.com, was accused of hiding questionable costs like resort, amenity, and utility fees into a single, vague, “Taxes and Fees” line item. In addition to the monetary payment, Bookings has to disclose any added fees clearly and upfront. The case could be a bellwether of the effectiveness of the Federal Trade Commission’s 2025 Junk Fees Rule, which mandates added fees be clearly communicated to customers in the hotel and live entertainment industry. The rule in effect ends junk fees for those industries, with the Texas case being the first high-profile use of the new rule.

• The “aspirational travel” trend - those who put more of a premium on the meaningful experience or luxurious aspects of travel than the price - is a growing vacation niche and target for the B&B industry. The travel industry boomed post-pandemic (American spending on travel has increased every year since 2020, per the US Travel Association), and with that the trend toward booking high-end accommodations despite the price for the experience alone. (Per McKinsey, wealthy luxury travelers spent $84 billion on high end vacations in 2023.) B&Bs are making a comeback among those customers with selling points of small-town charm and local immersion, but also with Gen Z and Millennials, who increasingly seek out lifestyle matches (i.e., B&Bs as small businesses with strong sustainability practices). Industry trends of themed stays and package bundles, as well as improved in-room technology also have particular appeal to the aspirational travel set.
• Consumer spending rose 2.7% in February 2025, continuing a steady upward trend from 2024, per data from the US Bureau of Labor Statistics. A traditional B&B is susceptible to seasonal shifts in revenue given the regional and specialized nature of the business. The accommodations segment is stabilizing post-Covid and adjusting to new consumer demands for more upscale and individualized guest services. Construction data from CoStar shows that 18% of guest rooms under construction in the US are not associated with any brand as those kinds of licensing deals have become too expensive and less effective. AI has also allowed small and independent - or remote - hotel owners to more easily create and operate their own reservation systems and loyalty programs, helping B&Bs level the playing field.