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Fed Cuts Expected To Hit D.C. Hospitality Industry Hard

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Hotels like the Hilton in Washington D.C. are expecting to see a downturn from the proposed 20 percent cut in federal discretionary spending.
Jon Haynes: http://www.flickr.com/photos/bluhousworker/254064993/
Hotels like the Hilton in Washington D.C. are expecting to see a downturn from the proposed 20 percent cut in federal discretionary spending.

An executive order from President Obama is calling for government agencies to cut administrative costs by 20 percent by the next fiscal year as part of a broader effort to make cuts to the federal government budget. Those in the hospitality industry in the D.C. region are expecting to feel deep effects.

Greater Washington Board of Trade CEO Jim Dinegar says that targets many things: "Cell phones, and the smart phones, and the fleet management, but that's not where they're going to get the bigger cuts and reductions and savings. We expect more of that will be focused on travel and conferences."

Dinegar adds the hospitality industry in the region is a major part of the economy.

"Hotels in Washington D.C. employ more than 14,000 employees," says Solomon Keene, president of the Hotel Association of Washington. "And hotels in the District generate more than $207 million in tax collections to our city."

Travel could see hits too

Solomon Keene is the president of the Hotel Association of Washington.  He says there is a logical place to cut but not end travel: "The $100 million in travel upgrades that the GSA has reported coming from federal employees. Don't eliminate travel. Eliminate the upgrades."

Keene says cities like Orlando and Las Vegas have been devastated by travel cutbacks in general, and he worries that this region could face the same fate.

Andrew Roundtree is with the Metropolitan Washington Airports Authority.  He says the number of passengers at both Reagan National and Dulles International could fall anywhere between 2 and 5 percent because of the cuts, but adds they can weather it.

"We can just look to this one event and look at it as a gloom and doom event. We lived through 9-11 at Reagan National. The airport was closed for 20 days. And we were able to manage through that.  So I'm confident in these airports and this region."

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