by Michael J. Shapiro | April 01, 2013

On March 1, the U.S. Congress failed to agree on any budget compromises that would avoid sequestration -- $1.2 trillion in spending cuts over the next nine years, with $85 billion in automatic cuts to occur by the end of 2013. 

Prominent travel industry leaders have warned of the effects this might bring about: A significant reduction in government travel, the majority of Federal Aviation Administration employees being placed on furlough, reductions in the number of Transportation Security Administration and Department of Homeland Security employees, and the closing of national parks are among the anticipated results.  

Less than a week after the missed deadline, the National Defense Transportation Asso­ciation announced it would not hold its annual forum, scheduled for September in San Antonio, because the sequester cuts Department of Defense funding for any nonessential government and military travel.

"If the military is unable to participate, the Forum's value is minimal," wrote NDTA president Kenneth Wykle, in a letter to members. "Opportuni­ties for training, knowledge-sharing and an information exchange are essential for our success. Sequestration removes these opportunities and makes it impossible for NDTA to continue with our Forum."

The U.S. Travel Association fears such difficulties will extend beyond government meetings. "Our concern is that travel could really become the face of the sequester," said U.S. Travel COO Geoff Freeman. "Too many travelers already consider the system to be a hassle, which leads to a decline in travel, which leads to fewer attendees." The sequester also leads to more uncertainty in the marketplace, he added, which has planners concerned about upcoming events. "It's that uncertainty that makes everybody's job a bit more difficult."

Adding to the challenge, said Greeley Koch, executive director of the Association of Corporate Travel Executives, is that the government's lack of clarity on the cuts has made the situation worse. "There would have been a lot less panic and a lot less confusion if the government had made it clear that there were no massive shutdowns or disruptions to occur in the first few hours of the sequester," he said.

A straw poll conducted by ACTE within two hours after the sequestration deadline had passed found 39 percent of travel managers were surprised to learn that the majority of the effects would be felt over a period of months rather than instantly. Nearly half (47 percent) said there was concern among their travelers and security departments about the U.S. becoming less safe as a result of cuts.

In all, fewer than 50 people, from firms in the U.S., Asia and Europe responded to the poll. While not statistically significant, the results are regarded by ACTE as indicative of potential trends.