Frequent Fliers

Travel spending climbs at a slower rate.

Federal agencies pumped $13.2 billion into the travel economy last year, up $1.3 billion over spending in 2003, according to data compiled by the Office of Management and Budget. Travel spending at most agencies increased or remained the same during that period, but expenditures were down at the Agriculture, Treasury, Interior, Labor and Education departments.

The Defense Department accounts for the lion's share of travel spending in 2004, shelling out nearly $9 billion. That is more than 10 times the amount spent by the Homeland Security Department, the No. 2 traveling agency. Of the 26 agencies accounting for the bulk of the 2004 travel tab, Education spent the least at about $10 million, nearly 900 times less than Defense.

Defense officials had predicted that travel spending would drop more than $2 billion in 2004, but instead it rose by $600 million. Still, the rise was less precipitous than in years past. For example, between 2002 and 2003, Defense travel spending increased $1.7 billion, nearly three times the gain in 2004. This year's uptrend across government is considerably less than Defense increases in previous years, indicating a slowdown in the growth of travel spending.

Travel spenders behind Defense and Homeland Security were Justice, Veterans Affairs, Agriculture and State. Veterans Affairs rose to the No. 4 spot on the top travelers list, edging out Agriculture, which held that position last year. VA spending rose $31 million in 2004, while Agriculture's fell by $27 million. State moved up to the No. 6 spot, edging out Treasury. State's travel tab increased $43 million in 2004 while Treasury's dropped by $10 million.

According to data provided by the General Services Administration, federal travelers spent almost $2.8 billion on airfare, $382 million on car rentals and nearly $2 billion on hotels in 2004. United Air Lines, with $669 million in sales, displaced Delta Air Lines for top billing in 2004. Delta's federal sales were $596 million, followed by American Airlines at $481 million in the No. 3 spot. United, Delta and American held 24.1 percent, 21.5 percent and 17.4 percent of the market share, respectively.

Federal travelers tended to stay in Marriott or Holiday Inn properties, where they spent $141 million and $139 million, respectively. Marriott International Inc. garnered a 7.1 percent market share, and Holiday Inn, which is part of the InterContinental Hotels Group, came close at 7 percent. Residence Inn by Marriott, which earned $105 million in federal business and a 5.3 percent market share, was the only other hotel chain to exceed 5 percent.

As in previous years, federal employees showed a clear preference for renting cars from Hertz Corp., which held a 20 percent market share in 2004, up from 18 percent the previous year. Federal spending at Hertz topped $76 million. Enterprise Rent-a-Car was a distant second, earning $51 million in federal business with a 13.5 percent market share. Avis Rent a Car and Budget Rent a Car followed with 12.8 percent and 12.3 percent, grossing $49 million and $47 million, respectively.