Second, the article does not note that per diem for a CONUS city is broken into two parts. The first part is for lodging, the second is for meals and incidentals. Government workers on CONUS travel, under GSA rules, receive up to the Government rate for hotels in an area (with some exceptions). However, that part of the per diem is limited by what the employee actually spends. Employees booking their own hotels have no incentive to book at a Motel 6 or La Quinta that is below per diem if they can book at a Hilton at Government rate. Also, since the per diem for meals and incidentals is paid at a flat city rate, if an employee can book a hotel that serves breakfast on Government rate, that means that he/she has more money to spend on other meals and incidentals.

Third, in some cases Government travelers simply leave hotel selection to TMC/CTOs. It appears that their hotel selections are probably guided by the commissions paid.

Fourth, this chapter does not discuss how CONUS per diem is paid on a 24 hour clock. This is a GSA phenomenon which is often confusing to Government travelers and impacts on per diem for short trips. I know that under the rules in effect the last time I traveled, GSA assumed that airlines provided meals. Has this/is this being changed in light of the fact that many airlines are no longer providing meals or are charging travelers for meals?

Fifth, recently airlines have begun adding charges for first and second bags, meals, blankets, etc.. I am curious as to what, if anything, is being done to account for these differences between airlines in city pair rates? Also, does the traveler absorb these extra costs as part of his/her per diem?

by Scott Goldsmith

First, per diems are issued in early August to be effective October of that year through September of the following year. Since we currently contract January to December, all the hotels are given the opportunity to change their rates for October through December. In most cases, one of two things happens. Either in areas where the per diem went up hotel potentially loses that revenue if they do not amend the rate, or the properties are suspended from the program if they do not amend rates that were bid at the previous years per diem in areas where the per diem went down. As we already make exceptions and concessions for this entire market, why do we not solicit rates based on the government calendar year? It could not be harder for us or the travel agencies than managing and loading for the same program year twice.

Next, we need to address the issue of soliciting all hotels worldwide versus utilizing production and market data to develop a more sensible and manageable program. Understanding that there is some amount of government business everywhere, and acknowledging that hotels base rates on their best business information and potential revenues, the government rates could be solicited much like any other large lodging consumer. Hotels should be made aware of the total government lodging credit card spend for the specified program or government agency (i.e. FedRooms, CW|Sato Government Travel; Navy Elite; Army Lodging) in their city or area based on the two previous years. They should be made aware of any base construction or closings as well as agency headquarter relocations planned within the program year. The government or its representative should commit to authorizing only a certain number of hotels per hundred or per thousand room nights, and only accept that many hotels into the specified program for the year in that location. This will create competition for the revenues between hotel companies and that is when we can examine concessions.

The first concession we could look at is commissions. I understand that the very hard working agents should be paid and paid fairly for their work. I have wonderful relationships with the agency travel managers I work with on the government accounts and do not wish to take anything away from them. However, when the rate offer requirements dictate that the rate must be at or below per diem, must be commissionable at 10%, plus there are participation fees or pay for performance models, it severely reduces the number of hotel and quality of service the lodging industry can provide. When a rate that is already, in many cases, unattractive to the hotel, is then reduced further by fees, they cannot make government business fit into their business needs. Say, for instance, the CONUS rate is $70.

We are now looking at the hotel receiving only $60.67, in effect, as they cannot use the $70 as the actual value from which to pay operating and staffing costs and see a profit. It is my understanding that the airline industry no longer pays commissions on the CPP or other government rates, so maybe we should have discussions with them industry leaders to industry leaders about how that is working for them and how it has affected their relationships with the various government program managers, and of course the bottom line revenues. Hopefully, together, we could find a system that would benefit budgeting for all parties involved; the government as a whole, the lodging industry; and the agencies.

Following commissions, last room availability is a concern. Most hotels have complicated yielding plans that optimize revenues while still being able to offer rates to lower rated business client and the government. Although during some times during the year, the property may be able to offer these more discounted rates readily, the majority of the year, in my experience, the hotels must be very careful with their thresholds. If the government agency and its travel agency want to guarantee that there are always rooms available at their contracted rates, then they should accept the limited hotels per area as discussed, and not only mandate per diem rates, but that the travelers must stay in program hotels. Although when working with the corporate market transient programs we see a high level of leakage, there are programs which are very well mandated and will not pay a traveler back for stays in properties not listed on their program directory. Hoteliers are more willing to offer last room availability when they are aware they are one of a select few getting the business and are aware of how much they can expect to receive.

Once we get these more critical items addressed, we can look at the competitive edge and value added type concessions. Some hotels already include breakfast or other meal functions in the rates for all guests and that allows the traveler more freed up funds for other meals and incidentals. Some hotels which do not have inclusive items for all guests, will include items such as continental breakfast and/or afternoon hors d’oeuvres to their executive level guests and frequency program members. These could be value add items for the government and contracted into the program rates. If you have one hotel who would offer per diem and no concessions and one hotel that would offer a meal or other amenity at the same rate in order to be guaranteed the business, then the government gets a choice as they can then counter-offer or negotiate a lower rate or amenity with the first hotel as many of our corporate customers often do. As developing technologies emerge and thinking outside of the box, unconventional items we could look into as we move forward would be expanding electronic folios to include “government ready” receipts, divided folios, or TDY travel claim voucher style itemized cost savings reports, as well as, some in-house items like laundry/pressing services for our military travelers including military service style uniform and shoe shine care.

Although there are more questions than answers at this part of the game, there is a better way out there. We as the travel industry cannot just require changes on the government’s side of the equation. There are things the hoteliers and the lodging industry need to consider as well before agreeing to this type of arrangement. Some of the other questions I have as challenges to the change but do not have answers to are:

• If a hotel cannot offer the contractual government rates, or a rate at per diem, should they offer a rate at the hotel that is labeled government? I know currently most do.
• Once this more corporatized process is in place, are government travel managers at the agencies still going to audit to see what other federal government rates are available and insist on the same rates or benefits? If rates are offered on a production driven basis, knowing each travel agency manages different departments and agencies within the government with different travel needs, they should not be allowed (at that point) to demand equalization. We don’t offer our corporate clients producing 10000 room nights a year at a property to offer the same rate packages to clients consuming 300.
• Are technologies in place that could manage a October to December program versus a January to December program on both the industry and the government travel agency sides? What would it take to create or update that use? Could they be made compatible to ETS?

We have made a lot of progress in how we work with the government. But I think with all the new technologies we have access to, it is time to look at how to make it better; both more cost effective for the government and more profitable for the hotels.

by Crystal Wright

For fluctuations, GSA has created seasonal rate periods in many markets where there is a sustained period (two or more months in length) where rates (ADR) are different from the preceding or following period by at least 15%.  Three years’ worth of data is used to determine seasons.

Due to ongoing changes in the market, GSA reviews the per diem rates continually to determine if changes and updates are needed.  Impact of forces of nature and economic times can determine the requirement for immediate action for inadequate rates in certain locations.

Once GSA has applied the changes to per diem rates they are published on the Internet at http://www.gsa.gov/perdiem as FTR Bulletins.  The Bulletin indicates the revisions prescribed by the Office of Government wide Policy for the continental United States.  Notices are published periodically in the Federal Register constitute as notification of revisions in CONUS per diem rates to agencies.

By:  Debra Hardman

“The views expressed are those of the author and do not necessarily reflect the position of the Bureau of the Government or my Agency.”

The Government does a lot of training on-line and does training and performs functions using teleconferencing. It is my experience that most large facilities have teleconferencing capabilities and use them. Aka1979, seems to presume that all or most of this travel is for training, but this is not the case. While some travel is for training or to attend conferences, much Government travel is for other purposes. You cannot provide emergency relief, deploy a soldier, investigate a crime, inspect a facility, or perform many other government functions by teleconference.

While some waste may occur in travel expenditures, Government workers do not live high on the hog when traveling. GSA sets per diem rates for each CONUS locality. Special rates are negotiated with hotel chains in most cities and a maximum hotel rate is established. (It is interesting to note that, because of the negotiated rate, you can sometimes stay at a nice hotel for the same rate offered by an economy hotel.) Because of the discounted rates and limits, it is usually not an advantage to arrange meetings on specific days of the week. It is my experience that conferences and other large gatherings are often scheduled at facilities during the off season when the Government can get good rates. While corporate counterparts are holding January meetings in Florida or Hawaii, we are usually watching the snow pile up at Virginia Beach. As for the per diem itself, within the U.S. it is payed at a flat rate for each city. The rate is not generous and I have only heard of one person who came out ahead, by eating every meal at McDonalds. I have, in the past, traveled with private sector personnel who were not happy that they could not enjoy the lavish meals that they were use to on their expense accounts if they wished to join us. Unfortunately, the Government also does not allow us to accept free meals either.

As for airfares, which I do not believe are included in the $2.5 billion figure, we normally travel on the GSA city pairs contract rates. These rates do not change based on advance booking and are preferable for many situations, even if you know in advance when you will be traveling, as they allow for last minute changes and cancellations. In addition, most of us are required to travel on economy fares.

In short, while no system is without waste, my guess is that most corporations pay more per capita for similar trips.

by Scott Goldsmith

There are situations where the traveler may actually be able to stay at a hotel that has a rate below per diem, in which case they manually adjust the reimbursement amounts in GovTrip to reflect the actual expense.  Conversely, there may be some locations (especially overseas) where there are no rooms available at or below per diem, or there may be an event such as a major festival, conference, or sporting event that precludes the traveler from reserving a room at the preferred lodging facility.  In this case, the traveler may claim actual expense for lodging, but at no more the 300% of the per diem rate for that location.  Also, they must enter a justification which clearly states the reason that they were unable to obtain a room at the per diem rate.

By Mark Hartshorn

The contents of this message are mine personally and do not reflect any position of the Government or my agency.

Government Sabre includes access to government negotiated rates, policy compliance automated at the point of sales, automation to improve efficiency of overall government travel booking process, and provides access so the agent will only see government approved rates.

Government Sabre offers the following features:

• Access to Preferred Rates.
• CONUS and OCONUS rates for lodging and transportation, which are approved government per diem rates.
• Rates from government approved contractors.
• GOV and FPLP hotel rates easily identified in Sabre system displays.  If requested property is not available, an alternative is automatically suggested.
• Access to Rail content integrated into the Sabre system.

Government Sabre can be accessed through the Sabre Global Distribution System, Sabre connected agencies in the United States, and via the World Wide Web.

Additional Sabre features include:

• A module available for charging Travel Management Center fees.
• Reporting is incorporated in the ticketing module.
• Modules are available for script writing and other automation to make the global distribution System more user-friendly for the agents.
• Pseudo-City Code included in Sabre contract.
• Training materials and references available in hard copy or through the internet.
• Training sessions conducted either first-hand or train-the trainer.

by Cindy Moore

Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency.  Use of this equipment is consistent with the agency’s policy governing limited personal use.