Federal agencies are facing a 20 percent cut in travel and meeting expenditures for 2012. The goal is to shave $4 billion dollars from travel, meetings, technology, and expenditures (including vehicles) based on 2010 spending. That’s not good news for meetings, especially resort meetings.
The cuts came in an Executive Order issued in early November. President Obama didn’t ban federal employees from attending meetings and conferences, but they are expected to make greater use of video conferencing and other technologies that might replace travel. If agencies are hosting events, they should use space already controlled by the federal government whenever possible.
Hotels and resorts with significant government meeting or event bookings are likely to see a drop in business starting in 2012, said Goran Gligorovic, executive vice president of Omega World Travel, in Fairfax, Va. Fairmont isn’t seeing cancellations, according to Regional Director of Sales and Marketing Michelle Gilman, but new bookings have ground to a halt.
Resorts in leisure destinations won’t likely see much impact because they have little government business to lose—federal per diems are too low for most leisure-focused resorts. But resorts and conference centers in Virginia and Maryland will feel the pinch, says Bruce Baltin, senior vice president of PKF Consulting in Los Angeles.
How badly those DC-area resorts are hit depends on what actually happens to federal agency budgets and meetings, he explains. Agencies are still figuring out which events they can cancel, which events must take place, and who has to attend.
