(from Venues Today, March 27, 2013) On March 1, 2013 the United States government enacted a mandatory spending cut in the federal budget, which slowly began to show its effects in several different aspects of the United States economy, including the venue industry. Government trade shows, among several other events, have forcefully been cancelled due to these budget cuts, which have contributed to millions of dollars in lost revenue.
This sequestration process has been a couple years in the making and is a result of a deficit reduction deal between the White House and Congress to allow the government’s borrowing limit to be raised. The deal was approved, but the plan was not met by March 1 when the government spending cuts demand went into effect, therefore, $85 billion in federal spending cuts were made.
Any business that had a contract with the federal government faced a potential breach of contract and a freeze on their funding. Buildings such as the National Conference Center (NCC) in Leesburg, Virginia took a very hard hit since approximately 60% of the NCC business, or $15 million annually, came from federal government meetings and events.
“The sequestration is a disaster. The poorly planned budget cut was supposed to have been a last resort for the White House and Congress, and now thousands of entities are suffering due to a lack of leadership in Washington, and many jobs will be unnecessarily lost,” stated Kurt Krause, the General Manager of the NCC.
The impact of this sequestration process is property and region specific since some venues and convention centers tend to be doing better than others. The long-term effects this process could have, not only on the venue industry, but other industries as well remains in question. “I don’t foresee it getting better any time soon. We’re hunkering down like everyone else till the end of the year and hope things will turn a corner in 2014,” states Eric Blanc, Director of Sales and Convention Services at MacDill Air Force Base Convention Center in Tampa, Florida.
Despite the hopelessness in others, some remain positive that the sequestration will be temporary and a new budget will be passed that will help the industry get out of this rut.