Govt. Travel Is Recovering, But Only Slowly

No travel segment took a harder hit in the last few years than U.S. government travel as scandals over excesses at large government conferences, together with mandatory federal spending cuts, triggered a severe clampdown on travel by federal employees. The clampdown hurt retail travel sellers and suppliers alike.

Now, finally, there are indicators that things are looking up for those who cater to the government travel sector. Still, those close to the situation do not see a return to the old days, especially when it comes to larger government conferences.

One who holds that view is Matt Beatty, president of military and government markets at CWTSato Travel. CWTSato is the military and government travel division at Carlson Wagonlit Travel, a longtime provider of both civilian and military travel for the government.

Down 17%
Beatty said that while government travel at CWTSato is up by double digits this fiscal year over last, the increase comes on the heels of a tough year. “We are still down 17% compared to 2012,” Beatty told Travel Market Report.

Moreover, he predicted, “you won’t see 2012 spend levels soon, if ever again.”

The picture doesn’t change for the federal government’s upcoming fiscal year, which begins on Oct. 1. “There is now a two-year federal budget deal in place. The second years kicks off Oct. 1 and will be pretty much flat, up 0.2% – not a significant change. So pressures are still there.”

Scandals & more
The current challenges in government travel can be traced, in part to 2012, when excesses at a General Services Administration (GSA) conference in Las Vegas made headlines.

But it was the government’s mandatory spending cuts, or sequestration, which went into effect last year, that really put pressure on both conference and transient travel in 2013, said Beatty. “That has persisted well into this year, as agencies were unable to budget for travel,” he said.

Reductions in the government’s travel spend vary considerably depending on the federal agency. “We have some agencies where spend is down significantly more than others,” Beatty said.

Government meetings have taken a particularly hard hit (see sidebar), and that sector will continue to face steep obstacles, Beatty predicted.

“Small meetings will continue under some level of scrutiny. It will be even more difficult for large conferences to make a rebound any time soon. You would really need strong justification to hold a large conference at this point. It’s probably the new normal.”

Keeping costs down
In the current environment, CWTSato’s travel’s job is to make the most of limited resources for its government clients.
 
“We spend a great deal of time helping them travel more economically – purchasing, tracking and everything else across the board. With the experience we have in this space – and the way we can learn from our commercial accounts – we can be really useful for government partners,” said Beatty.

Carlson Wagonlit has been handling government business for 65 years and is familiar with its many “nuances,” said Beatty. “You have issues of data privacy, security concerns and so forth, and you need to live up to those requirements.”

Still worthwhile
Even with all the complexities and budgetary constraints of government travel, there’s still a huge amount of spending on travel, Beatty said. “It’s still a worthwhile business, and we continue to make significant investments in this.

“We received a big new account a year ago and are still looking to expand government business.”

Carlson Wagonlit Travel recently renewed its long-held contract for FedRooms, a managed hotel program that the GSA outsources to CWT. The program presents travelers with hotel options that comply with government policies related to cost, safety requirements and more.

CWT also has been awarded an E-Gov Travel Services-2 (ETS2) Master Contract by GSA. ETS2 is the second generation travel management program that consolidates online travel booking services and expense management platforms to drive cost savings and efficiencies.

Also looking to expand
Omega Travel, another significant TMC player in government travel, is also actively looking to expand its government business, said Omega proposals specialist Elizabeth Morris. Omega has serviced numerous government accounts since 1972.

Asked about booking trends, Morris replied, “For Omega, the sectors of the federal government that we service are stable or up in terms of flight travel.”

In the hunt for more business, Omega attends forums to network with government representatives and is registered with sites that send notifications of federal business opportunities.

Omega works with Concur, the expense management company, to service government accounts under the newest version of E-Gov Travel Services.  “We provide customized technical expertise, adequate staffing levels and agent training tools,” Morris said.