Government travel trends: Looking ahead to the 2014 fiscal year

Cutting costs for travel is a trend for 2013 that will be with us for the foreseeable future. In April, the White House announced that, in one year, federal agencies had reduced travel and conference spending by $2 billion.

Several agencies are requiring travel to pass new tests before being approved. The travel must be deemed:

• Essential or necessary,
• Contributing to the agency’s core mission,
• As “green” as possible, contributing to sustainability, and,
• Involving remote participation via videoconferencing as much as possible.

This year videoconferencing is exploding in the federal government because collaboration is still necessary. Travel is being scrutinized so much that it must pass a higher bar and requires more careful planning to meet stricter guidelines.

An upcoming rule change has made government officials more strategic about their conference planning. The rule change, which takes place in fiscal-year (FY) 2014, prohibits conferences costing more than $500,000—except with a waiver by a U.S. Cabinet member.

Conferences budgeted at more than $100,000 will automatically require a senior-level review, and—as of January 1—they must be reported on a website—with justifications for their expenditures. As a consequence, conference spending will be kept below the $100,000 threshold whenever possible. Convention centers and hotels that relied on major government conferences are feeling the pain of this contraction.

Invitational travel also is losing ground. Fewer experts are being paid to attend conferences or for travel to cities where they would meet in person with federal officials.

Government travel continues, but there is a concerted effort to use less expensive hotels, lower airfares and replace rental cars with airline shuttles and public transit whenever possible.

Travel planners are making their arrangements farther in advance and seeking multiple offers and bids. Look for them to be seeking the best value, rather than most convenient.

With more bidders for fewer contracts, on the supplier side—especially for hotels—expect more aggressive bidding.

The belt-tightening in government spending will continue to have repercussions in pricing at the supply end, since fiscal cost-cutting will not be going away anytime soon.

For example, in April, Secretary Janet Napolitano testified about the U.S. Department of Homeland Security’s plans for an additional 20 percent reduction in travel costs from FY 2013–2016.

Expect that belt to get tighter and tighter, and the travel industry to respond with more competitive rates, to the best of their ability.

Goran Gligorovic is executive vice president of Omega World Travel, a global travel management company. Based in Fairfax, Va., Omega services government, corporate, meeting, and leisure clients throughout the U.S., Europe, the Middle East and Asia.