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Can Government Run the Travel Industry?

July 22, 2009 By: George Dooley

Federal policy should not dictate the location where government events, including meetings and conferences, are held according to a July 14 letter to Senate Majority Leader Harry Reid (D-NV) from Rahm Emanuel, President Obama’s Chief of Staff .

The letters from Reid to Emanuel and Emanuel's response to Reid were made available to Travel Agent by the U.S. Travel Association, who is concerned with government policies that “demonize” travel and prejudice “fun” destinations such as Las Vegas or Orlando.

“Our view on the issue of government travel is not focused on specific destinations, but rather on the justification for and the cost/benefit ratio of the individual exercise,” Emanuel said. “There is no doubt in my mind that the federal government should lead by example in tightening its belt and justifying its expenditures as we meet the priority challenge of reducing the national deficit and the debt. For me, the test of government travel is what will be accomplished by that travel and whether the cost to the government is reasonable as opposed to other options.”

Emanuel was responding to a June 26 letter from Majority Leader Reid, who asked for White House assistance to “reverse the current informal federal policy which prohibits and/or discourages government meetings and conferences in Las Vegas and other cities on the basis that they are too leisure oriented to be awarded such business.”

“Specifically, I ask that you issue a directive or letter to federal agencies indicating that this is not a permissible consideration in selecting locations for government meetings and conferences. Every hotel in America is leisure oriented,” Reid wrote, citing the importance travel plays in Nevada’s economy and the advantages Las Vegas offers as a world-class destination.

In an interview with Travel Agent, Geoff Freeman, senior vice president of public affairs for the U.S. Travel Association, said there was widespread industry concerns with government policies that would discourage travel, including conferences and meetings or select destinations based on dubious criteria. “The travel industry generates jobs and clearly should not be demonized,” Freeman said.

In Senator Reid’s letter to Emanuel, Reid said that he had been told that “Las Vegas facilities would not be considered as a travel destination for government meetings or convention travel because Las Vegas is also a vacation and leisure destination.” He cited a Federal Bureau of Investigation conference relocated to another city on this basis and said he was aware of similar action taken by the General Services Administration and Bureau of Indian Affairs, both government agencies.

Reid, the elected senior senator from Nevada, cited the enormous resources the state and Las Vegas offer that feature “superior amenities, convenience and value.” He noted that the average nightly room rate in Las Vegas is $98, a figure that he believes is far lower than most major convention cities.

The U.S. Travel Association and other major groups concerned with the impact of federal policies on travel underscore the economic contribution of meetings, conventions and incentive travel, the jobs generated by a vigorous travel industry, and the tax revenues paid to local, state and federal governments.

In a Wall Street Journal story today, titled “Government Meeting? Stay Away from Fun City,” reporter Tamara Audi said that some government agencies are being encouraged to host meetings at more “buttoned-down places such as St. Louis, Milwaukee or Denver." She cites on example of an agency that encouraged use of video-conferencing as a substitute for “eliminating unnecessary travel.”

U.S. Travel’s Freeman questioned if government agencies were not overly sensitive to media criticism of travel expenditures and if the media were not focused on abuses or excesses rather than the value of travel to the government agencies and employees. “The government should not be selecting destinations,” he said.

Business travel creates 2.4 million jobs, according to U.S. Travel data, and meetings and events are directly responsible for 1 million American jobs. Business travel accounts for $240 billion in spending and $39 billion in tax revenue at the federal, state, and local levels.

U.S. Travel also cites Department of Labor reports that nearly 200,000 travel-related jobs were lost in 2008, and expects another 247,000 to be lost in 2009. Each meeting and event traveler spends an average of $1,000 per trip, the association says. U.S. Travel recently launched a “Meetings Mean Business” campaign to counterbalance criticism of  travel.

At press time it was unclear if the White House would comply with Senator Reid’s request for a directive or letter to federal agencies.

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