sk any federal traveler who's been turned away from a hotel because the government-rate rooms are filled. Ask any traveler who's had to get up at 5:30 a.m. to make an 8 a.m. meeting because his hotel is located an hour and a half away from the field office he is visiting. They will tell you the cheapest product is not always the best value. The General Services Administration's Federal Supply Service (FSS) has sought to incorporate value-added features into the discounted rates it has negotiated with airlines since 1980, but until recently, it had never attempted to lobby hotels for value-added features.
Finally, the lodging picture is changing. Last year, the FSS regional office in San Francisco, which administers travel programs for the Western Travel Zone, launched the pilot phase of the Best Available Lodging Value program in eight cities. Through the program, GSA negotiates agreements with selected hotels for low rates and value-added services such as last-room availability, complimentary breakfast and airport transportation for the federal traveler.
The program grew out of the recognition that the federal government is well-positioned to negotiate lodging value. Federal travel is big business: The Office of Management and Budget estimates agencies will spend $7.5 billion on travel in 1996. Data collected at the beginning of the BALV project from the American Express Government Card program revealed that in the top eight federal travel destinations alone, government travelers spent nearly $81 million on lodging from Nov. 1, 1994, through May 3, 1995.
From Idea to Reality
In December 1994, the FSS formed an ad hoc committee of agency, hotel industry and travel agency representatives to guide development of the lodging program. Agency members included officials from the Office of Management and Budget, the Office of Personnel Management, the U.S. Postal Service, the Internal Revenue Service, the Veterans Administration, the Defense Contract Audit Agency, and the Agriculture, Labor and Justice departments. Hotel chains represented included Marriott Corp., Best Western International, Radisson, Hyatt, Holiday Inn, HFS, OMNI, Doubletree, ANA and several independents. Travel agencies were represented by Omega, Balboa, Professional Travel Corp. and the Society for Travel Agents in Government (STAG).
The committee worked to achieve the lodging priorities identified by federal travelers in a GSA survey conducted in July 1995. Under the program, hotels are eligible to be listed as "best available lodging values" if they:
- Comply with the 1990 Hotel/Motel Fire Safety Act;
- Are conveniently located to business activity;
- Provide accommodations for people with disabilities;
- Offer prices within per diem rates;
- Offer last-room availability at the low rates;
- Offer additional amenities like free parking, local phone calls and airport shuttle;
- Offer direct agency billing.
Mixed Reaction
GSA is introducing the program in three phases. In Phase I, the pilot phase, GSA negotiated value-added rates in eight cities: Washington; Arlington and Alexandria, Va.; Honolulu; Atlanta; Dallas; Los Angeles; and San Francisco.
Industry response was mixed. The 17 hotels GSA selected as "best available lodging values" liked the fact that their selection demonstrated their commitment to the federal traveler. Roger Evans, senior sales manager at the Omni Los Angeles Hotel & Centre, says, "I can assure the federal traveler they are receiving maximum value per dollar with this program at this hotel. Our property regards this business as a high priority in our marketing segmentation." However, fewer hotels participated in negotiations than anticipated. Of 320 hotels solicited, only 175 submitted offers to GSA.
GSA representatives believe there were two reasons for the limited industry response. When the agency kicked off the program last January, new per diem rates had not yet been released and hotels were reluctant to make a commitment without knowing the rate for their area. Also, hotels in the first eight cities selected have histories of high occupancy rates, potentially making them less eager to negotiate with GSA.
GSA plans to use lessons learned during negotiations for Phase II of the program, which adds 29 more cities in September. Phase III, due to be launched in January 1997, will expand the program to include the top 75 federal travel destinations, representing sales of $284 million as of June 1996.
GSA hopes that as hotels and federal travelers become more aware of the program, interest will increase. "The federal government market segment is very attractive, and a majority of STAG members will continue to actively pursue this business," says Phyllis Reagan, STAG President, and co-owner of Professional Travel Corp. of Arlington, Va.
GSA officials note that the more federal travelers choose to stay at properties selected by GSA as "best available lodging values," the more negotiating leverage GSA will have to gain recognition for the federal traveler as a preferred customer.
For more information about the Best Available Lodging Value program, GSA encourages travelers to contact their agencies' travel management centers, because government's nationwide network of 151 contract travel agencies will promote the program. STAG has been asked to include an article about the program in its quarterly mailing, and vendors such as Official Airline Guides and Patriot Systems have been encouraged to highlight "best value" hotels in their travel directories. GSA plans to provide a complete listing of Phase I and Phase II hotels with an insert in the fall newsletter to all cardholders of the American Express Government Card.
To receive a free listing of hotels participating in the program, call GSA at (415) 522-4671, or visit the agency's Internet site at http://www.gsa.gov/regions/r9/travel/balv.html.
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