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Managed Lodging
Responses to FedRooms QuestionsGTAC MeetingSeptember 23, 2014
FedRoomsis GOOD for Government and Industry
Low Operating Cost for the GovernmentGSA’s internal cost to manageFedRoomsare minimal. Two government employees manage four lodging programs plus otherdutes. No new staff was added for theFedRoomsprogramTheFedRoomscontractor,CWTSatoTravel, collects 2.75% on room rates sold.Low Participation Costs for the Lodging IndustryTheFedRooms’ participation fee of2.75% of room nightssoldcompares favorably to:10% standard commissions paid by hotels20+% participation feescharged by online consumer reservation sites, plus addition fees for priority positioningFixed entry fees plus a percentage of sales charged by other managed lodging programs
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FedRoomsUse and Growth
In FY12 and FY13,FedRoomssoldapproximately 1Mroom nights each year.Sales exceeded $105M each year.FedRoomsis believed to be the largest managed lodgingprogram.Market share growth is affected by:Non-use of government reservation channelsTravelers do not use ETS/DTS and TMC/CTO for hotel reservations20% of available room nights are reserved through channels80% of reservations made through channels are atFedRoomshotelsTravelers call hotels direct and ask for the ‘government rate’Rate codes are not captured in bookings – leakage is hard to identifyUse ofFedRoomshotels can be captured but not the rate codeGDS are rollingoutnew functionality to enable the capture hotel rate codesPolicy: FTR requiresuseof CityPair Programairfares with exceptions; FTR recommends ‘first consideration’ ofFedRooms
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Alternatives to FedRooms
The best corporatetravel management practitioners have proven that there is no replacement for a managed lodging program to control and contain lodging costs‘Open Booking’ has been discussed but not provenNo other alternative accomplishes the goals of OMB MemorandumM-12-12, May 11, 2012OMB M-12-12 directs agencies to, “expandandleverage the Government's purchasing power to reduce travel costs associated with hotelsand rental cars.”FedRoomsenables agencies to achieve their 30 percent travel spend reduction goal while traveling efficiently.FedRoomsisthe bestalternative to meet goals ...GSA hasassessed alternatives;FedRoomsis best model to meet goals ofM-12-12
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FedRooms– the consistently reliable choice
Every day, government travelers are subjected to lodging industry marketing tactics which promote GOV rates that:Are above per diemCarry hidden fees, such as resort fees, which put the effective room night cost above per diemSubject travelers to cancellation fees that are much more restrictive thanFedRooms’Require 2+ night reservations to qualify for the GOV rateReal examples reported to GSA:Hotline Complaint – Traveler called hotel and asked for GOV rate, hotel sold their GOV rate which was $71.00/night over per diem. Resulted in additional cost to traveler of $284.00 plus taxes, request for refunddenied.Six travelers stayed 3 nights at hotel based on the recommendation of a friend. The hotel’s GOV rate was “at per diem”, however, at check out each room was charged $25 per night resort fee: $450 above per diem, request for refund denied.Traveler reservedFedRoomsrate but canceled by 11:00 AM day of arrival; was charged one room night ‘late cancellation fee’ based hotel policy of 10:00 AM day of arrival no penalty cancellation.FedRoomsrequires no penalty up to 4:00 PM day of arrival. The cancellation fee was refunded.
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Managed Lodging - gsa.gov