How will the government have the latest changes on travel trips, since many changes occur hourly and/or daily?  This is another issue that should be resolved or be more of an importance to the government.

Other reporting techniques from credit card companies are contributing to make this process smoother, by reporting hotel bookings are payments. However, there should be more focus on this matter.

The travel should not have the burden of searching for other hotel properties when arriving to their “booked hotel site.” If the particular site is booked then this is the responsibility of the government’s assigned department. This is an inconvenience to the traveler and in my opinion; the traveler is not being protected. The traveler then has to search for another available property.

The per diem reports provide traveler’s hotel information. This report is an overall status of the government traveler’s actual hotel rates and discounts offered and usage. This is a very important component report, as the government is able to capture and track its traveler’s rates and discount usage. And determine whether they are saving money. Perhaps, the government should institute a better program in the future.

The government should improve or revise the hotel report, this will help track hotel bookings – cancellations, and  last minute changes.

by Ana Ferrara

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

A good example is to compare Boston and San Francisco as these two cities for corporate travel rates are rather similar. Boston with seasonal rates of $203-$256 is a concentrated area with a large downtown and does not contain a suburban area containing many hotels. The majority of the hotels within the city limits are located in the downtown area.

San Francisco has a similar downtown area to Boston but also has a rather large suburban area within the city limits. If zip codes were used to identify the downtown areas, the per diem rates would then rise based on the hotels that would be compared. While raising the per diem rates seems one sided, it would actually give the government traveler significant savings.

The current highest rate allowed in San Francisco is $185 and is normally not readily offered by many of the most desired hotels. This then forces a traveler to choose a hotel outside of the downtown area which requires them to either rent a car which also incurs parking costs or travel by taxi which can easily cost $20-$30 each way from some of the more distant locations where the per diem is offered.

What we have normally said is that if you raise the per diem rates in the key cities that are most often used, we can save you money, by decreasing the number of rental cars used, parking fees, fuel costs and also save the traveler wasted time spent driving.

Having more involvement from the hotel community in the per diem setting process will make more of the most required areas for travel available to the government traveler. This will allow for better seasonality to be set by true demand and also allowing for the forecast of occupancy to be used in setting rates.

By Ted Miller, CHME, CHSP

Starwood Hotels and Resorts

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

At our agency, Travelers are responsible for making sure that their receipts are attached correctly and the attachment is legible.  All receipts for air, lodging, rental car, and any single expense greater than $75 must be attached in the travelers’ ETS travel document.  Within our ETS there is an automatic pre-audit functionality built in which alerts the document preparer/traveler in the event that a receipt has not been uploaded.

Our ETS users have the capability of either scanning or faxing in their receipts.  Either option is a very easy process.  For faxing, the user is required to print a cover sheet from the ETS.  This cover sheet includes a unique bar code, which identifies to the ETS which document the receipts are to be attached to.  The user simply places their receipts behind this ‘bar coded’ cover sheet and faxes the information.  The second option allows users to scan in their receipts.  I personally find scanning to be the easier option for me, mainly since receipts come in all shapes and sizes, I find it easier to scan my receipts at my local shared scanner, then browse and upload the file within the receipts section of my ETS.

by Brian Shears

Now I personally have not had to cross the IDL. But with my experience as a customer service representative, this topic is highly confusing for travelers, and therefore I have researched it many times as well as have explained it many times. Sometimes travelers will call our agency travel help desk to ask why the ETS system is calculating their per diem incorrectly. What they don’t realize is that they are crossing the IDL and the ETS system is actually calculating their per diem correctly. Other times we receive calls from travelers who are aware they are crossing the IDL, but have no idea how the ETS system is calculating their per diem. They simply just want an explanation how the calculation is being performed. I say ‘simply,’ but most of the time, the IDL is anything but simple.

By: Susan Crouser
“The contents of this message are mine personally and do not reflect any position of the Government or my agency.”

According to the GSA; getting a per-diem rate adjusted in a market that may be undervalued, can only be requested by a federal travel manager.   This provides a real problem for states that have markets where federal travelers do not travel too.  A prime example is along the Oregon coast.  One city along the central coast is a tourist destination; however, it doesn’t have a seasonal per-diem rate.  This has become real troublesome for state employees to conduct business and stay in this city because of the lack of properties that will honor the per-diem rate.

A solution to this problem would be if the GSA would listen to State travel managers on where adjustments could be made.  This is one area where the states and GSA could work together.  Maybe as part of the annual research the GSA conducts to adjust rates, a snap shot of state input could be included.   I am not advocating for higher per-diem rates everywhere, but a closer look at those few markets where finding a property honoring per-diem rates is difficult could be warranted.

by Tim Hay

For the convenience of travelers, FedRooms offers a website which offers helpful information.  There’s a convenient search page for travelers to easily find a FedRooms hotel.  This site also offers an overview of the FedRooms program, a traveler newsletter, a screen where travelers may sign-up to receive special offers and updates, and an opportunity for travelers to provide feedback.

Federal Government employees (military and civilian) can always use the FedRooms rate when on official travel but can also use the reduced rates for leisure travel at select FedRooms properties.

The FedRooms program offers more than 4,100 hotels in more than 1,400 cities around the world which is an increase from 636 hotels in 2004.  They also offer a help desk to answer program-related questions.

It is important for the government traveler to realize that the FedRooms rate and ‘Government’ rate are not the same.  The ‘Government’ rates may have hidden fees and cancellation policies that add up to a larger bill at checkout and 15 percent of ‘Government’ rates are over per diem.  The FedRooms rate can be accessed through other avenues, such as the E Gov Travel system we currently use in our office.

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.

Reporting to Senior Management should reflect true costs associated with your program, unfortunately, as noted, all data may not be captured.   It is important for management to realize the benefits of mandating the use of the TMC and preferred vendors to better leverage discounts for the organization.

Some of our greatest savings are obtained by mandating hotel bookings through our program.  As an example, we used to capture 50% of bookings through our on-line booking tool or TMC – the other 50% was booked directly with the properties.

When our travelers’ booked directly with the hotels, not only were they not obtaining negotiated rates, or even per diem, our organization  lost concrete numbers needed to help leverage future negotiations.   We found ourselves scrambling around to match data to assist us each year to negotiate with hotels for per diem.

Recently, management had decided to mandate per diem which has helped us to capture more data and increase adoption of our on-line booking tool.   We have seen a significant drop in bookings that are made over per diem because employees would be responsible for the overage or have an Officer sign off on the overage prior to expensing.   Our “over per diem” spend dropped approximately $200,000 over the last year just by telling the traveler they would be responsible for any hotel booked over per diem.

All in all, management needs better insight to travel costs to see what exactly is happening within the organization and within the industry and make necessary adjustments to save on travel costs, and the way to do this is with reporting that is captured by your mandated TMC.

By Stefanie Tretola

In 1978, the Airline Deregulation Act changed the dynamics and working ways of the airline industry.

The government taking a cue from corporate houses, that started demanding discount in airline prices, established the City Pair program to benefit from the travel expenditure on airlines. These fares are only issued against government credit cards or GTR’s and published under the code YCA, where Y means unrestricted coach and “CA” means Contract Award. There is also Government Business contract issued under code –CB (like DCB, which means controlled capacity in Business booked under D and “CB” means Contract Business. To confront various scenarios of what can happen, certain exceptions to the mandatory use of city pair program were established and can be checked in the manuals. Of course if these exceptions were to be utilized, a waiver code and authority must be obtained.  Refunds of tickets should go back to the Government whether credit card or GTR.

Airlines which are awarded contracts should be US flag carriers which participate in CRAF (Civil Reserve Air Fleet). The FTR and JTR detail the requirement for government travelers using federal funds in accordance with “Fly America Act” which requires use of US flag carriers or US Code Share flights.

FREQUENT FLYER PROGRAM

Government employees are allowed to accumulate either miles on airlines or points at hotels/cars.

HOTELS

Beside airlines, government travelers also use hotels for their official stays and transportation. They spend almost $2 billion dollars annually on accommodations. These properties can be divided into 3 categories, Transient used by TDY traveler, extended stay used by those who stay 30 day or more in one location & corporate housing for permanent change of station travelers. Those properties recognizing the value of government business often offer the travelers extra amenities for free like breakfast, evening cocktails & airport shuttle. Many of these hotels set their rates at or below per diem rates to lure these travelers. Per diem rates are reviewed annually by GSA for CONUS, DoD for Alaska, Hawaii, Guam and Dept. of State for foreign countries.  All these properties must be on FEEMA list and must be certified by FEEMA for government use. Travelers should give these properties and those in FEDROOMS priority. They can be booked through FedRooms (outsourced by GSA & managed by Carlson Wagonlit) & GDS’s.

It is worth to mention that a program called The Emergency Lodging Services Program was developed to provide temporary emergency lodging in support of emergencies or disasters. An example was that during Hurricane Katrina, over 750000 people were successfully housed. In September 2005, a Blanket Purchase Agreement (BPA) for Emergency Lodging Services was awarded to Corporate Lodging Consultants to support the government lodging needs in case of emergencies or disasters. It is also available for Continuity of Operations Program for planning accommodations at identified and negotiated properties in geographical areas.

Hotels have their own yield management system by which they decide room rates as per occupancy requirements and advance bookings. Hotels still pay commissions (not like airlines with their zero commission) except maybe some government hotel rates are non-commissionable.

Reporting hotel bookings is easy now a day because all bookings made by electronic means can be traced and can be captured and reconciled with charge cards. Hotels participating in the FedRooms program are required to submit a monthly report about usage and fees.

By Metri Altwal