With their close proximity to the federal government, Maryland hotels have been hit especially hard by the reduction in government travel spending in the last three years, said David Reel, president and CEO of Maryland’s Hotel and Lodging Association.
After misuse of travel funds by the Internal Revenue Service and General Services Administration from 2010-2012 — including private jets, lavish meals and parties — the Office of Management and Budget has cut government travel spending down $3 billion since 2010.
But this year, Sen. Tom Coburn, R-Okla., along with four other senators, proposed legislation that called for even stricter limits on travel. Coburn’s proposed bill would cap conference spending for a single event at $500,000 and would require agencies to publish travel expenses.
The American Hotel & Lodging Association testified against it.
Coburn’s proposal failed to make it into this month’s omnibus spending bill, providing some fiscal certainty for an industry that was hit hard during October’s government shutdown, said Vanessa Sinders, senior vice president of government relations for the AH&LA. Now, government travel spending must remain in line with an OMB mandate requiring a 30 percent cut in spending from 2010 levels.
Since 2010, Maryland’s lodging performance has remained close to national levels and room occupancy has stayed at around 60 percent.
“The OMB protocol has proper room to have the right folks at these meetings and conferences,” said Jim Clarke, senior vice president of public policy at the American Society of Association Executives. “The dialogue (between public and private sector) is necessary.”
Beth Cobert, deputy director for management for the OMB, who testified earlier this month in front of the Senate Committee on Homeland Security and Governmental Affairs, agreed on the importance of government travel.
“While the Administration has taken important steps to reduce conference spending, it is critical to recognize the important role that conferences play in the federal government,” Cobert said in her written testimony.
More cuts and limits, like those proposed by Coburn, are not what the AH&LA see as productive solutions to the problem, Sinders said. The National Conference Center reported $9 million in lost business last year and had to cut 150 jobs — further cuts could be devastating and could reduce productivity, she added.
Certain regulations are necessary to prevent excess spending but many conferences, conventions and meetings can’t be done via video, Reel said.
“There’s a cost in not having government travel,” Reel said. “It has a ripple effect. It’s the day-to-day employees who get hurt when these things happen.”