Agencies cut back on travel

In February, President Obama cited the Agriculture Department's money-saving decision to cut back on travel to conferences as a worthy example of efficiency. But even before Obama sent that message, agencies were cutting back. Federal spending on travel fell from $14.8 billion in 2007 to $13.8 billion in 2008, as spending on hotels and cash outlays for travel declined. And smaller alternative airlines and car rental companies saw spikes in business while spending on some more expensive vendors declined.

Defense Department employees were once again the top travelers in 2008, spending $9.1 billion on airfare, hotels, rental cars and meals, according to data from the Office of Management and Budget. OMB expects that figure to rise to $9.3 billion in 2009, and then fall to $8.7 billion in 2010, most likely as military operations in Iraq wind down. The Homeland Security Department was the second-biggest spender, devoting $1.3 billion to travel expenses. The Veterans Affairs Department was third, spending $596 million on travel in 2008, and the Justice Department, the third-largest spender in 2007, fell to fourth place in 2008, paying out $406 million.

According to data from the General Services Administration, between 2007 and 2008 agencies experienced a 39 percent drop in cash outlays for travel expenses, from $485 million to $296 million, and a 20.8 percent decrease in spending on hotel rooms, from $2.5 billion to $1.9 billion. Spending on car rentals rose 6.3 percent, from $410 million to $437 million, during the same period. Buoyed by rising airline ticket prices, spending on flights rose 14.2 percent, from $3.5 billion to nearly $4 billion.

There were some big changes at the top of the airline vendors list, however. America West disappeared as a result of its merger with U.S. Airways; the latter's business correspondingly rose sharply. Northwest Airlines saw a 21 percent drop in federal business, from $235 million to $184 million. In the latter part of 2008, the company finalized its merger with Delta, which saw a modest increase in federal business last year.

Meanwhile, purchases on smaller airlines more than doubled.

Spending on car rental companies other than major vendors rose 24 percent in 2008, from $411 million in 2007 to $437 million. Enterprise Rent-A-Car saw a 23 percent rise in business, while Budget had a 12 percent increase. Other vendors saw only minor fluctuations.

There were some changes in the allocation of hotel spending in 2008. Dollars credited to the extended-stay chain AmeriSuites fell dramatically, as new parent company Global Hyatt phased out the brand. Bookings at Wyndham Hotels and Resorts fell 26 percent, from $11.3 million to $8.4 million. The Crowne Plaza Hotels and Resorts saw the largest increase of any hotel chain, with spending there rising from $33.3 million in 2007 to $41.2 million in 2008. Marriott Hotels led chains with $195 million in federal bookings, followed by the Residence Inns by Marriott with $182.2 million, and Holiday Inn Hotels and Resorts with $168 million.

Click here for the top travel contractors.