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The U.S. General Services Administration next year will debut enhancements to its FedRooms managed hotel program that will allow government meeting organizers to book meeting space and blocks of more than 25 rooms. GSA and Carlson Wagonlit Travel, which manages FedRooms, by the end of this year plan to select a third-party online meetings booking engine to power the functionality.
FedRooms presently guarantees government employees room rates at or below government per diems at more than 9,000 properties worldwide. With the new tool, planners will be able to book hotel rooms for meeting attendees at or below government per diems as well as meeting space, FedRooms senior director Tracy Shook said.
While government travel arrangers currently can book smaller room blocks and limited meeting space through FedRooms, some federal agencies do not manage and procure their meeting spend efficiently, according to Shook. The new functionality will foster better tracking and contract management, saving money for those agencies using the program, she added.
In many cases, those planning meetings within government agencies are not trained meetings professionals and therefore not mindful of additional charges and costs attached to meeting contracts. GSA in 2000 permitted planners to spend up to an additional 25 percent on meetings, but Shook said planners still need more guidance on the process.
"People don't want to see money wasted or thrown away because the people who are planning meetings don't know what to ask," said Shook. "We are going to provide a tool to make it much easier for them."
During the first year after its launch, the meetings program will be tested by one federal agency, and CWT will track the program's efficiency, Shook said. The agency will contract with hotels directly, but planners will use the tool to understand all the clauses and details to watch for in meetings agreements.
CWT began managing the FedRooms program in 2004 with just 500 contracted hotels, but the program recently has drawn interest from more hotels attracted by the stability of government business. Since GSA outsourced the program to CWT, contracts no longer exist between hotels and GSA. The hotels and GSA enter into "agreements" where the properties abide by the per diem rates or they are dropped from the program.
As travel demand wilted amid poor economic conditions, the FedRooms program became a more recognizable source of business for hotels, Shook said. The program received requests for proposal responses from more than 13,000 hotels last year and continues to expand with more luxury and upscale properties, she added.
"It's really ironic. When we first started in 2004 the economy was fairly flushed and the hotels really didn't need the business," said Shook. "Over the last five years, we have gone from being the wallflower at the dance to Ms. Congeniality."
However, the program is not mandated and has struggled to attract widespread use by government agencies. Currently, about 70 percent of government travelers are booking directly with hotels or through opaque Web sites, resulting in bookings that do not promote the program nor facilitate future negotiations, Shook said.
GSA last year proposed legislation that would require government travelers to select hotels that were preferred by their respective agencies, but Congress did not approve it. Shook anticipates a mandate for travelers to book through the FedRooms program eventually will happen. "The more we can show we can move market share to hotels that are in the program, the better rates we can negotiate," she said. "We give travelers enough hotels to pick from so that they should be able to have a good compass as far as where they want to stay and knowing that we are here to back them up."
An incorrect assumption among government travelers is that prices listed by hotels as government rates always are at or below government per diems. In most cases they are not, according to Shook. Hotels can mark up room rates and still list them as government rates, something that cannot happen through FedRooms. "The travelers get confused because they see government rates and think the government controls or monitors those rates, but it doesn't; it's just a free-for-all-rate code that hotels utilize," Shook said.
FedRooms is well liked among some hotel companies, according to Choice Hotels International senior vice president of sales Michael Murphy. "There are some [government] departments that use it, and we are tightly aligned with those departments. We are asking all of our hotels to get signed up into that program," he said. "The process is not perfect, but it's not bad either."
In the past, hotels and travel management companies argued that government per diem rates were much too low. For fiscal year 2010, domestic lodging per diem rates typically range from $70 to $150, with some exceptions including Chicago ($211), New York City ($340) and Washington ($229).
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