Travel advisors are witnessing significant disruptions as federal workforce layoffs lead to uncertainty and financial instability for government employees, contractors, and agencies. The Trump administration’s Department of Government Efficiency (DOGE), established in January, has aggressively pursued cost-cutting measures, leading to thousands of job losses. The latest executive order issued on February 27 has further restricted federal employee travel, requiring written justification and approval for any work-related trips. This policy shift has rippled through the travel industry, as affected workers reassess their ability to travel for both official and leisure purposes.
Susan Sheats, the founder of World Exposures in Arlington, Virginia, has already noticed cancellations from clients concerned about their financial stability or potential difficulties in international travel due to government instability. She believes this is only the beginning of a broader trend. Though the most immediate effects are felt in Washington, D.C., where a significant portion of federal employees resides, the ramifications extend across the country. Federal workers and contractors are spread nationwide, including in large concentrations in California and Texas, meaning that the travel sector in multiple states is experiencing setbacks.
According to the Pew Research Center, over three million people were employed by the federal government as of November, excluding active-duty military personnel. Since Trump took office, thousands of federal workers have been terminated, with no clear official count available. DOGE has also been targeting probationary employees, those with less than a year of service, for mass layoffs. Reports suggest that hundreds of thousands could ultimately be affected, either through termination or incentivized resignations that include several months of paid leave. As these layoffs continue, the uncertainty has made travel a lower priority for many former federal employees.
The situation is particularly dire for travel agencies that rely on federal contracts or serve clientele within the federal workforce. Jay Ellenby, president of Safe Harbors Business Travel in Belcamp, Maryland, noted that his agency has felt the brunt of USAID budget cuts. Many NGOs funded by USAID had to cease operations, forcing Safe Harbors to scramble to bring back stranded travelers. With projects now frozen and funding uncertain, Ellenby expects long-term consequences for both his agency and the broader industry.
The ripple effect of federal layoffs is not limited to government-related travel. Consumer confidence is taking a hit, and with thousands of workers unsure about their financial futures, nonessential travel is being postponed or canceled entirely. Ellenby warns that reduced spending by former government employees will impact both corporate and leisure travel. The fear is that travel-dependent businesses, from airlines to tour operators, will struggle with declining demand, exacerbating economic instability in the sector.
Sheats has encountered numerous clients reconsidering their travel plans due to financial concerns. Two of her clients, who had planned summer trips to Italy, canceled their reservations after losing their federal contracts. One of them expressed uncertainty about their income and could not justify the expense of an international trip. Similarly, McCabe World Travel in McLean, Virginia, has seen cancellations from former federal contractors who are now in limbo.
The financial strain is not the only factor influencing travel decisions. Some former federal employees are worried about potential travel disruptions caused by government instability, such as delays in passport processing or disruptions at U.S. airports if Congress fails to reach a budget deal by March 14. Additionally, concerns over anti-American sentiment abroad are discouraging some travelers.
However, not all clients are canceling their trips—some are actively seeking to leave the country in response to the political climate. One of Sheats’ clients, who has the financial means to continue traveling, recently booked a Tahiti cruise and plans several more trips this year, viewing international travel as an escape from domestic political uncertainty. This highlights the growing divide between those who can afford to travel freely and those who must tighten their budgets in response to job losses.
Beyond direct travel cancellations, Sheats worries about the broader economic impact of the layoffs. Federal employees support entire ecosystems of workers, including housekeepers, landscapers, and other service providers who rely on their income. As government workers lose their jobs, the financial strain extends beyond travel and into everyday economic transactions, creating a cascading effect of lost wages and reduced consumer spending.
The American Society of Travel Advisors (ASTA) has acknowledged these concerns and is closely monitoring the situation. The organization is gathering input from its members, many of whom are bracing for long-term changes to federal travel policies and broader economic uncertainties. While the full impact of the layoffs remains uncertain, the effects are already visible in travel agencies, airline bookings, and consumer sentiment.
As the government continues to implement budget cuts and job reductions, the travel industry will need to adapt to changing consumer behaviors. While some travelers will still take trips out of necessity or financial security, a significant portion of government-affiliated travelers will likely remain cautious, prioritizing financial stability over leisure or work-related travel.
