Collateral Damage
As government meetings get slashed, venues bear the brunt of the losses
By MARSHALL KRANTZ
The fallout from last spring’s scandal over extravagant event spending at the General Services Administration (GSA) has prompted drastic cutbacks in federal government meetings, disproportionately hurting venues all across the country.
At the GSA alone, 35 conferences were canceled by Acting Administrator Daniel Tangherlini after the agency’s then-head resigned in the wake of the public outcry over a 2010 conference in Las Vegas for 300 employees that cost $823,000.
Like the GSA, it appears that agencies throughout the federal government have cancelled meetings, delayed bookings for new meetings, and are holding more meetings at federal facilities.
Dramatic Fallout
At venues that target federal government group business like the National Conference Center, located in the Washington, D.C.-area, the fallout was quick and hard.
“We immediately lost close to $2 million in business this year from cancelled government meetings or government meetings that were shrunk,” says Eric Whitson, the center’s director of sales and marketing.
That figure, Whitson says, represents about 10 percent of the center’s projected government meetings business for this year.
“We were told [clients] couldn’t hold the meeting,” Whitson says. “There was a perception that any meeting would be considered a waste.”
In addition, federal group bookings also dried up nearly completely in the couple months before starting a slow recovery.
“April and May were zero,” Whitson admits.
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A Minor Victory
In what is widely considered a win for the hospitality industry—or at least not a loss—the General Services Administration (GSA), which sets travel per diem rates for the entire federal government, in mid-August froze per diems for the next fiscal year at the current rate.
“While certainly not ideal, the rate freeze is a far less radical approach than the crippling move that GSA had contemplated,” the American Hotel & Lodging Association released in a statement.
Industry groups heavily lobbied government officials for the GSA not to change its method for calculating per diems. Per diems figure heavily into the selection of venues for government meetings because government employees must use their per diems to pay for rooms and most meals at off-site, government meetings.
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