July 30, 2013 Notes

The meeting opened with a roll call of all GTAC committee members.

Good afternoon. How is everybody? Good.

Welcome to our renovated building.

Anne Rung is the Office of Government-wide Policy Associate Administrator. She came to our office just within the last month. She quickly acquired extreme knowledge of the government-wide travel advisory committee. She came over a year ago and she has had prior government experience as a senior director for the Office of Administration. She also has some experience with the State of Pennsylvania. Welcome.

Now, I would like to introduce Norman Dong. He is the interim Deputy Comptroller with the Office of Management and Budget. We want to welcome him. One of his responsibilities is improvements: improvement and transparency. Prior to this, he worked at the Department of Homeland Security as a Financial Officer. Welcome. We are glad to have you.

(Anne) Thank you very much. For all of you on the phone, as I said earlier, we had many nominees. We are delighted to have such a nice process.

I wanted to put what you are doing in context of your work today. Our Administrator joined us last April. One of his first tasks was a huge process for us. One of the things I can get out of it was, to deliver the best value to the government and the American people. We developed six priorities, I won't go through all six

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today, but there are two in particular that are relevant to the work that you have been doing the last several months, with a focus on our partners and government. We are in a tough budget climate. We realized that we have an opportunity to help the agency. Budget cuts are a part of our daily life here and in particular, the Administration set an ambitious target to decrease travel budgets by 30%. As we think about this, I will welcome all of your ideas. We welcome all of it as a great opportunity for us to get your input and feedback as we think about what are the best policies and processes to deliver travel to the employees.

(Norman) Let me start by echoing our appreciation for the work you will be undertaking; the importance of the work that this group does and is embarking upon. As I was talking before about how we are in this new normal in terms of agency budget environments. What we were seeing was a trend toward year-over-year increases. Those days seem like they were so long ago. Today, agencies focus on the budget and seeing it flat as opposed to increases. We talked about sequestration. For many of us, that was an abstract topic. It's interesting how over the past 12 months, that is no longer abstract. I think that underscores the point that we really are living in a new normal and it is not a one-year aberration or to average in, but if you look out in the harbor, rising budget cuts will be facing us across the country. That is why it is important to look at the whole issue of travel as part of a focus on administrative spending. Over the past few years, the Administration has addressed this issue and I'm proud of the initial success you have achieved-set goals of about $9 billion in administrative savings, which includes travel and other activity and I’m pleased to say, we have exceeded the goal to $11 billion. The savings are important, but there are management controls

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and disciplines that we have in place. Many of you are familiar with Memorandum OMB 12-12 that is the guidance from May 2012. It was focused on addressing some of the egregious activity that we have seen over the past three years. I would say that it was a process where it may have been a little bit painful, but I would also say as a government, we have emerged stronger as a result. Some of those stronger internal controls are reflected in terms of the agency level Secretary review of conference activity over $100,000, including public reporting of conferences over $100,000 and government-wide reduction in travel of 30%. I do think that we are stronger as a result of the process and today we are at a place where travel will always play an important role in supporting agency missions. Think about the work that we are doing in the scientific or the research community; it plays a vital role in our agenda. So we recognize that what we are talking about, whether site visits or FBI training, you always have travel playing an important role. That is why we want to make sure, as we look at activities; that we are managing it in a far more positive way. Again, we are very pleased with the results we have achieved today, but I think there is some important work that this group will be tackling in the months ahead and from my experience, as we are in the policy development role, one of the things that I have seen is giving stakeholders a voice in the process. Whether we are talking about federal agencies or our industry partners, I believe that, if we give people who have to deliver the policy a meaningful voice in the process that substance will emerge. I am looking forward to the work.

Great.

Thank you.

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Once again, I thank Anne and Norman for coming out here and opening this up for the committee. I believe it will be a great committee going forward. There are a lot of things that need to be discussed and entertained over the next year or so, but once again, thank you very much for your time.

Thank you for sharing.

David Flynn, committee chairman begins to speak: So, once again, this is the Government-wide Travel Advisory Committee. We are starting all over again. Thanks for your patience with the technical difficulties we had earlier. Since it is a public forum, the line has been muted for everyone except for the members of the committee and so, if you have any questions or comments that you would like to submit, please do so on the e-mail address. The questions and comments will come through. We will review them later in other meetings.

Here is a brief history of myself. I come from a travel background. I started my career at American Airlines, from throwing bags into the back of the plane through being a ticket agent, and then, once graduated from college, working in the financing and accounting offices at the headquarters in Dallas. So, I have a vast knowledge of how the airline operations work. I was there through 9/11 and saw the changes occurring due to 9/11 and how we were under budget constraint. So I was lucky to keep a job at that time. I was able to focus on saving the airlines and moving us forward and preventing us from going bankrupt. I worked overseas in the Middle East for about four years focusing my career a lot on the financing and accounting side. I worked for a little company called Halliburton. I was regional finance director and then in 2008, I started my career in government as a travel

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manager and I've been working my way in that position for the last five years and here we are.

So what we will do now is do a little introduction of the rest of the members. We will start to my left.

Good afternoon. My name is Nan Marchand Beauvois. I am with the US Travel Association. I am here on behalf of our Association. My background has always been the sales and marketing side; both corporate and destination marketing organization. So, I have a lot of background on that side of the industry. I'm happy to serve and I look forward to working with you.

My name is Fred Schwartz. I am president of the Asian-American Hotel Association with 11,000 members and 20,000 hotels in the United States. We have some great immigrant success stories. So, pleasure to be here.

Thank you.

I am Paul Somogyi with Marriott International. I'm thrilled to be with this committee.

Good afternoon. My name is Emily Morrison. I've been in the government travel services field for eight years starting in 2005. I’ve been the Department of Treasury the last several years in travel operations overseeing policy.

I am Dane Swenson and I work for organization called The Defense Department in The Defense Travel Management Office; it was formed seven years ago now and I joined it about six

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months after it was set up -- worked on the strategy on how to put together an integrated travel program. Over the last three years, we put the thing together one by one, bringing the policy in the Defense travel system technology solution and then we put together the program. Some of them are industry facing. We are working with others in the program. Couple words of my background. I actually entered the military after graduating from Penn State. I spent 25 years in the military, doing many different jobs in dealing with line units down in the division. I retired and went to work for a firm where I did modeling and simulation work for them and then I did some technology consulting for them before coming back to the government. Looking forward to working with this committee. I think it has great potential. We have a public-private venture to build upon.

My name is Rick Singer. I'm the Executive Director of The Society of Government Travel Professionals. I represent the corporate travel industry. It is my job to oversee and enhance collaboration between the federal and state governments in the travel industry and make sure they use best practices. I am pleased to be here. Thank you.

My name is Claudia Bonetti. I work with Lockheed Martin and I am a contracting travel manager in the travel department. I've been with the company over 30 years all in travel management. I have extensive background in the travel industry. I am pleased to be with this committee.

My name is Kathy Lane. I work with National Corporate Housing. I'm Director of the federal programs and represent the corporate housing committee. I'm pleased to be here. I've been on prior

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committees in 2002 and 2003. It's a privilege and an honor to have this exchange.

My name is Mark Stansbury. I manage Lockheed Martin’s travel. At Lockheed, we have roughly 40,000 travelers. Since 2012, my team negotiates and manages all travel agreements. I have been with Lockheed for over 17 years. I've been with Lockheed since I got out of grad school. I got a Masters in Business Administration and I am pleased to be on the committee.

On the phone?

This is Cindy Heston. I am with Wellpoint. I work as a conference planner for the past four years with Wellpoint. I've been a travel manager previously. I also worked for an airline in sales capacity. I'm pleased to be here. Thank you very much.

Thank you. I am Brian Nichols. I am Leader of travel procurement and operations for Deloitte. Deloitte is the largest consumer of travel services with roughly $700 million in managed travel expenditures. So, I and my team handle all aspects of sourcing, negotiation, contracting, and all operational service delivery as well; including 250 contracted service agents in service contract centers in the US and in India that service approximately 50,000 travelers. Prior to my work at Deloitte, I have about 12 years in the lodging industry and I look forward to contributing to the committee.

This is Erin Choquette. I am part of the state agency for the state of Connecticut in contracting, procurement, statewide fleet to statewide HR, so, I've been involved in drafting travel regulations,

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our fleet management policies, and a variety of other things. We follow GSA guidelines a great deal so I'm happy to participate in this and to have a better understanding of what goes into the policies and perhaps share some of our experiences.

Patrick?

Good afternoon. I am Patrick Moscaritolo, President and CEO of the Greater Boston Convention and Visitors Bureau. This is basically a not-for-profit organization. It is membership-based with member companies across New England. They range from rental car companies to business owners who are involved in the industry. I joined the Bureau over 22 years ago. I was in a number of different management positions. I'm looking forward to participating.

Good afternoon. My name is Bryan Scott. I'm the director of federal government programs for Enterprise Holdings; that is the parent company for Rent-A-Car and Alamo Rent A Car. I've been here for over 25 years. In this role, I've worked extensively with the Defense Travel Management Office on the U.S. government car and truck rental programs and with GSA as well as all the other worldwide federal government programs that we manage. I'm excited to work with the committee and honored to be chosen to represent the car rental industry.

I believe that is everybody. So, once again, I want to thank everybody for accepting their position and really looking at where we can be more efficient as government agencies and as a partner from government to industry as well.

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So, I think one of the things that I want to point out real quick is something that was mentioned earlier. When reducing travel by 30%, the executive orders that came across, a lot of people have looked at reducing government travel as well; we have to reduce actual travel by 30%. That is not the case. The real idea was reduce travel expense by 30%. That can be done in a number of ways without impacting the amount of travel in the agency. So, it is really how to be more efficient in your actual travel and bringing in technology efficiencies, being in control of the processes that allow that to occur. Those are some of the things that I believe we as an organization will be looking at throughout the next year. We will reduce the amount of expense that occurs with travel so that we can meet those executive orders without impacting the missions. As we move forward, we will look at some of the goals and objectives of the committee, understanding the purpose and expectations of the Government-wide Travel Advisory Committee. Then we want to go into understanding the hotel industry, in financial terms and look at the data that's available to us, see what we have there and then, have an appreciation for some of the authorities and directions that are given to us by the GSA and whatnot, and then, understanding some of the methodologies that go into setting per diem rates. I know there's a lot of discussion related to methodology behind per diem rates. What goes into it and why. So, we'll get into some of that and then understanding key concepts and reasons behind the theories that GSA uses for the per diem rates. And then, we can have an open discussion about these things moving forward. So, I guess from a 20-20 perspective, we can start with a clear understanding of the purpose and expectation, this or anything you'd like to discuss about what our expectations are? Discussing the mandate of

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travel 30% reduction, in object class XXI. We look at the Defense Department because travel is an integral part of the mission; on the number of trips, at least for the DoD, they have to travel to accomplish their mission. The department heads have different -- 200 different types of travel dealing with medical, training, reserves, and a lot of training travel. So, we start thinking about reductions. You are looking at this travel, that sort of stuff. Some of that creates pent up demand. Start looking at what you need to accomplish with travel, the length of trips, the number of trips, the cost per trips. When we start looking at initiatives, we articulate it to services and terms. If we do this, then it will generate so many trips and generate impact on the mission. That is kind of what you were getting at.

I have a question, does that serve -- is that 30% based on travel trips in 2010, or is it greater than 30%?

Talking about 30% from 2010, but what is the real percentage cut that we are looking to do?

That percentage will be different for every agency. Some agencies have traveled more between 2010 to 2013 or 2010 to 2012. Some agencies travel less. If you travel more, there will be more than 30%, if you travel less; it will be a little less.

What is the aggregate number?

Is that something that is set by Congress or can we put a number on that? That makes a big difference.

The total used to be put out there was an addition in the August issue. I followed it, I have it tracked back three years to 2009. In 2010, it wasn't available, but it is interesting to see.

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Okay. So, maybe those are some of the things that we can pull out and look at why those numbers are what they are and what the real number is.

We can categorize it.

Yes. That would be great. There is a new report that was started in fiscal year 11. That is a trip report. That really does require the agency to break down the number of trips and the cost by method of transportation.

It is consolidated by agency, which is a new report that we have been tasked to do. We went to 2012.

It depends on what information you are trying to get out of it. That information is public information, from my understanding.

The official travel number is in the president's budget. Object class XXI. You need to be aware there are two types. One is called temporary duty travel (TDY). The other is the Relocation. Department of Defense calls this PCS travel. The TDY piece of it is just the movement of people, not household goods and that's a good thing.

So, we do come up with a number. We figure out what we spent every fiscal year. We have an approximation of how much is in that relocation of people we also figure out how much is in the temporary US travel budget. Are you taking the minutes?

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Actually, we are not calling them minutes, we are calling them notes.

Okay. Meeting is being recorded, just so you know and we post the information that is transcribed from today's meeting. Feel free to offer your suggestions. Keep in mind, this is public information.

That is a good point. We are not taking minutes. We are taking notes throughout this conversation and at our next meeting, we will review those notes making sure to cover everything and address everything that was brought up.

We have Steve Hood here with Smith Travel Research. He is the Senior Vice President of Research and Director of the S.H.A.R.E Center. So, he's going to talk to us about some of the things that he has pulled together and, if we have questions, we can talk to Steve about those. We will give him the floor now. They are pulling up the presentation and, hopefully everybody can see that in a second.

Okay. I think the presentation is titled, “Orientation to data terms and measures used in the lodging industry.”

I'm Senior Vice President of Research, at Smith Travel Research. I have been asked to give you a quick orientation. This is a little bit of the hotel industry one-on-one. I realize for some of you this will be a repeat. I apologize. Feel free to ask questions as I go

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through this. We will go through some key points here. First, quick introduction: We provide a benchmarking service for the hotel industry. I will introduce that in the next slide. That is our niche and that is how we serve the industry. We obtain performance data. For performance data, we’re talking about occupancy and ADR, from over 70% of the hotels in the industry. That 70% translates to over 95% of the chain hotels. Most all chain hotels are participating.

We collect the most significant independent hotels as well and we were offer something called STAR report. If you are a hotel GM, this might have happened in your past with the STAR report, you lived and died over the report. We also maintain census data of over 150,000 hotels around the world and we have 13 offices around the world. It's a global business; we’re tracking hotels in every area of the world.

Now, this is a great slide I use called Benchmarking 101. I typically use this slide for other classes. You are looking at two managers: Managers A and B. Look at the orange bars. If all you could see are the orange bars; you'd look at two managers. This manager did 7% better and this one's doing 3% poorer, but then, I hit the clicker and if the automation is working right, this yellow bar appears and then it is a different story. Now, although this manager did 7% better, they underperformed the competitor by a point. This other manager beat the competition. In a nutshell, that is basically how we serve the hotel industry. Every one of those hotels picks a competitive set and they compare on a daily, weekly, and monthly basis their performance to their competitors to see how they are doing. Most general managers

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base their bonuses on this data. So, in a nutshell, that is an everyday benchmarking. Our primary customers are hotels and other hotel companies. Those are the ones participating and sending the data. Incidentally, we also have a survey program; we can get the data from hotels for absolutely free. Those hotels do not get to choose their competitive set. They do get a simple report we send out.

But, once we have that data, there are now a lot of other industries that use that data. We maintain the hotel database. For US Travel, we work closely with them. We are their source of data when it comes to the hotel industry as well as 600 others-all of those associations. Some organizations are basically, their goal is the hotel industry. They need to know each week, each month, how the hotel did. The benefit of being downtown versus the suburbs.

Whenever any of the major publications are quoting statistics for the country or the local area, you'll see a scorecard at the bottom. We work very closely with hotel vendors and then, we support the government. We provide the data for them to make the per diem decisions that they are making. We work with National Park Service as well. We work with a lot of other governments and then academia. We provide our data to over 200 schools around the world: Harvard, Yale, and those schools. Don't let me go too fast. If you have any questions, feel free to ask.

Types of hotel data. It is performance data. By that we mean, we are looking for occupancy and revenue. We break out the revenue by group versus transient travel.

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Larger hotels contract the group sales and lots of presentation data. Pipeline information talks about construction. Place accounting data we will track. We also track the performance data outside of the US. Any questions about the types of data? This slide talks a little bit about what goes on behind the scenes. This syntax shows about 50,000 hotels in the U.S. that’s basically, pretty much all of the hotels in the U.S. are maintained in the database. We have hundreds of detailed attributes. That serves as the foundation. Hotel data is the foundation. We collect performance data. Most of that performance information comes to us in the way of exports. Comes out of the hotel system. Marriott headquarters, they have all the data in the mainframe somewhere. That data comes straight from them to us. That is what happens in most of the situations. However, the data can also come from the interface. That happens a little bit, but not often.

Little note about methodology and processes.

We have a lot of confidentiality rules in place. We protect their identity. We have very tight relationships. Bottom line is, if somebody asks for an order of 10 hotels, they are getting aggregated data. They’re not getting individual data, they are getting the average. We have to track that. If somebody else in the company calls back a year from now and asks for 11 hotels, we tell him we can’t do that. That could potentially isolate the confidentiality.

We check the percentages of every parent company and every brand and every managing company. So that we're not giving away too much information about Marriott, for example, if they are

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over 40% of those hotels in the group selected for a single brand. We are not allowed to do that.

Hotel industry --Previews the information, and they look at supply. If you had 100 rooms to sell, your supply would be 100. The number of rooms sold would be demand and revenue is what you collect. We are just tracking the real revenue. Room revenue is just what we are talking out. On that data, we calculate several indicators. All focus on occupancy. ADR is the revenue divided by demand (rooms sold). When we are talking about occupancy, we are talking about that. Occupancy is the demand, rooms sold, divided by rooms available.

You may hear some terms from time to time. A lot of the metrics are a 12 month average. It is a moving average. Rolling average. Another term, the percent change. And then, we say, weekday versus weekend. In Dubai, it is Thursday and Friday as the weekend. Those are some metrics. There are two types of categorization: Geographic and non-geographic. When it comes to geographic categorization, the standards that are used by the hotel industry are something called a market. A market will represent a major city that would be a subset of that. In the other places, you'll have a market for the overall DC market which will include parts of Maryland and Virginia.

Now, as far as the GSA is concerned, they are not using markets. What they come up with is a user-defined destination. Jill will talk more about those later.

Those destinations are based off of their definitions.

One categorization to understand is the term scale. This will come into play. She will mention this more. The industry grades of all

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the different hotels are categorized into seven different scale groups. Starting at the top, luxury. If anybody wants a full list of those, I will be glad to get this to you, ones like the Four Seasons and Ritz-Carlton. Those are operating at a very high price level. Upper Upscale, things like Marriott and Hilton are the upper upscale level. Upscale things like Courtyard. Upper midscale are brands like Holiday Inn and Midscale are like Best Western and Comfort Inn. Economy is like Super 8 and Motel 6. In addition to that, there is an independent scale. They are themselves. So, if you need, I can get you a list of all the brands. If you need to, we can talk about methodologies used by the industry to group the different chains. That is a little bit about categorization.

We maintain a list of data file reports. We will learn more about that in bit.

This slide shows industry performance over time. The one in the 12 month number is always 1992 to present. You will see we have four different costs.

This shows recent occupancy. Interesting to note, the one we are coming out of now is by far the largest drop when it comes to occupancy. The green graph there shows the ADR percent change. You can see, it typically follows occupancy. It is 3 to 6 months behind occupancy. Interesting in the early 90s, occupancy was down, ADR it never went negative at that point in time. After 9/11, it showed a big drop. And then, you can see the results right now. The largest drop we experienced in 2010. But, as far as the industry is concerned, this is the largest increase in ADR. Those numbers blackened out, you can see this year's data compared to last year's data. This is not going negative, but it is leveling off. As you can tell, this is a big increase.

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Question? Your ADR percent, it nears, but it exceeds in every upturn except the one we're in now. Is there price pressure?

Absolutely. That is a big concern of the industry. The recovery has not been strong. There is a lot of discounting going on. There's a lot of conversation as to why that is. Some people will speak of economic factors as far as unemployment and things not turning around as quickly. But, there's a lot of discussion as far as that it is concerned. It has not bounced back as quickly.

In mathematical terms, the occupancy rate is not an independent variable when it comes to predicting? I look at that and say, they are not necessarily right.

You can see a downturn. Very close correlation. An example of this situation, back in 2005, cost began to soften up, but ADR went up.

It wasn't until this drop off here, ADR came back.

You don't have to answer this, the obvious question is, what independent variable drives rates?

That is a good question. We have research that ties together different economic variables. I can get some of those for you to look at. Good point. One more history aside here. This shows not a percent change number.

This is the actual ADR. This is not looking at percent change, but the actual. This shows you the current situation. Let's go back to 9/11. You saw about a five dollar drop back in 9/11. Total recovery, was up to 41 months for the first recovery. The recovery we are in now is over twice the drop. 57 months, we just recovered in May. June, of course, went over that. But the hotel

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owners just experienced recovery. We pull out every market; you can see a lot of the top 25 markets have not recovered. This is just a total U.S. number. We can use any of the statistics you would like to look at. You can look at it right, the levels of hotels. Some of the upper hotels have recovered more quickly than other hotels. You can slice and dice that anyway you would like to.

You confirmed the downturn was the worst since the Great Depression. If you look at the offering process in 2008 and 2009, I thought 22% combined. That took the air out of the competitive rates. I think people were just afraid on that. That is what you are seeing there. We always have this argument internally. The external person is fighting amongst ourselves. We are fighting to get a dollar less to drive traffic.

So, some of these issues are internal to the industry.

This is 15 years worth of data.

We do that in a lot of situations. If you'd ever like to see inflation adjusted charts, is something we can do. That is really cool. Especially when you look at the different levels of hotels, you'll see that some levels of hotels are actually down if you factor in inflation over a 15 year time period.

Most are up, but there are a couple that are down over time.

Are these government ADR or leisure ADR?

This is total U.S. hotel. This is basically all of the hotels in the U.S. All types of rooms. All types of visits: Groups, transient, government, business, leisure, everybody.

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Do we have the ability to break that up by type so we can see what a government ADR to leisure represents.

That is a good question. We have not been able to do that. We have gone to the data providers and tried to do that before. Unfortunately, the challenge there is the consistency issue and the way each different chain identifies different government businesses. Unfortunately, the different chains are so different that we brought it up before and made that suggestion, but it hasn't gone far.

Are the contractors responsible to report back to the government? Is there a data set available there?

Not that I am aware of. The only type of reporting we did on the government side is our own reporting.

Our online authorization and voucher system as well track the hotels. But, as far as I know, the hotels are not responsible for reporting. And then it comes to our own government reporting. It is very poor. I will disagree with that because, they have technology and great systems in place to capture this, I think, in general, for the rest of the government, they’re behind on hotels.

That’s what I mentioned earlier. A preview of total spend lodging broken out by supplier and airline. That came from a charge card data. I think that is a good source.

SmartPay, correct me if I'm wrong, that charge card just shows a total spend. It doesn't truly, if I understand it right, it doesn't truly break it down by average length of stay, what nights they are booking, when are they arriving, partners, etc. Right. Also if

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there's food and beverage on the bill. They won't be able to pick that out. It is all one charge.

My point of bringing this up, analysis of the program is only as good as the data that is provided. It seems there might be a lack of data here with regards to the government's perspective.

I agree with that. For the charge card sake, I would say that probably less than half of the government employees actually have a government charge card. Therefore, what you're saying is still not even total or all-inclusive.

Well, this will do part of it. Part of the data analysis and use the charge card that gives you a breakout of some sort. You might get level III data or not.

There are always new challenges. Some of the new hotels are contracted. Some of the cases, they are in a program. In order to get to an ADR, unless we have about 80% of the spend for that location; we feel it is not really a reliable number. It does take a lot of shovel work to get there. We have to sort out the location, whether it is government lodging or, you know, you look for things and the database of whether you are paying taxes or not. That's in 11 states.

We will talk about per diem later in the call. It will be tough to level set this without knowing the truth from data. That's just the point I want to make.

I will say, the agencies are charged with reducing cost by 30%. Have to measure that, right? They have to be accountable as mentioned? Or had to say we save 11 billion, where did that number come from? I'm sure there are metrics in and place that

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will be managed. We see that. I have a way to tell how much we are down year over year. As you have said, each company does this different.

I think you'll get there with 30%. You are right, but it truly doesn't show the metrics that are necessary. And if we will cut 30% off of travel spend, it is truly not showing the truth in numbers to the reductions that might be possible or, even measurable.

It is one thing to measure total spend, but it is another thing to measure the true metrics and reductions, other than booking fewer nights? Are they booking fewer work trips? There is a lot that can be measured into that.

No I agree with that. I mean we will have a single provider for ETS 2 and one of the benefits everything goes through there related to all hotels, however there still is the opportunity for someone to claim and book that hotel through that engine and then book themselves and then reported as encumbered spend being captured. You have the opportunity for acquisition offices to create contracts outside of the ETS for which the hotels book.

That's an issue for everybody. Government and commercial.

Everybody's got leakage but more than 80/20 with us we are 90/10 I believe as far as looking at data for online booking tools so if you can draw compliance and your data will be that much more accurate.

We mention commercial and there are a couple commercial companies on the committee. I don’t want to speak for them. Commercial contracts do, I believe, require data reporting back and forth between the supplier and the contracting company.

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That's true.

DoD does a lot of hotel contracting but you really have to get into details because sometimes they are multiple years and they could be 4000 room nights and you don't know if they only use 500 of them or whether they extended and it went over. These are peeling back issues, you don't always get data that great because sometimes they use ranges.

David, the data does exist, just right now there's too many areas so it really does require a lot of resources to get a full picture. I think I know what you guys are asking about. It just doesn't exist right now but I think it's part of what's Concur’s been offering as a single source.

I think the same holds true not just a government issue but across the board. The government has done an incredible job with 96% or some high number adoption for online booking but many companies struggle. These are commercial companies that are booking that are negotiating differently than the government, they have metrics in place but they'll struggle and they have to piecemeal together those agencies that are dedicated to the user online booking tool data, user credit card data, and then combine it and as I said it’s one directional, you put the thing together and you use them as close as I can because I think it really helps us understand the total spent.

It's moving the needle but hopefully we are going to be able to help in this committee to find ways that will help that.

There's definitely ways to do it and how it’s reported and have everything that is needed to track the frequency.

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Certainly those kinds of things, like with the group transient contract program that we started about seven, eight years ago. A lot of those types of things are due to the increased technical capabilities of the hotel. It wouldn’t be out of the world to think that might be possible in the future some time to track the government travel number more accurately than it is being tracked right now. Then you get into sort of a least common denominator situation with all the different data providers what can everybody do and that becomes a challenge you'll have that comparing apples to oranges and bananas and it's just that nobody thinks the data isn't good so nobody really cares about it, if it's not consistent. That just is my two cents.

I just wanted to give you a little bit of terminology terms and definitions of things like that. If you need anything else let me know. I made a few notes about the inflation-adjusted numbers and correlated with economic variables and I'll get some slides back to Craig and Jill that will show you a few things and if you need other things you know, anything else that you can think of because very different market level data, total U.S. average can be very important.

I mean gosh Boston's been a very interesting market especially during this downturn and recovery. So lots of interesting ways to look at that but that's the kind of thing we do we slice and dice that we try to serve the industry.

Can you also get the ADR for each scale? Yes.

I'll give you a scale breakdown. That's a different scale I never saw seven different scales line up before but you have a higher hotel chain and lower one and I think there's preferences.

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Scales are defined worldwide. Basically, the scales are defined by the average worldwide data brand and that's how they are placed into different scale groups because those of you who travel outside the country you know Holiday Inn in the U.S. is going to be real different than the Holiday Inn in China or major London downtown, is going to be totally different but the scale groups are consistent from total average.

It's much easier in the U.S. than to go outside the U.S. but I'd be glad to come back if it would be helpful.

I think if we had the opportunity to break the scale down by government. There’s another problem when you talk about scales, you want to get the lowest cost but you also want to make sure your staffers are in the right environment close to where they need to be to conduct their mission or whatever so there's more factors than just one if they are staying at the Super 8.

Steve, do the revenue rates include such things as the internet, free parking, in that revenue number or is every amenity segmented out?

Every amenity is on top of the rubric.

That is a base rate.

I can share it with you; it's all based upon uniforms, the publication by the AHLA and the hotel finance technology. Everything is defined. Some of everything, ADA, everything is narrated in the way they do business is related to the standards.

This may be a question for Jill but you said you do it by geographical location. I think GSA does it by County. Okay. Do

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they use crosswalk with other locations, what if it’s in the same county or vice versa?

Jill will handle that. They are based on accommodations in counties in the fields and properties, is the way they do that is my understanding but Jill has a presentation that shows it.

There aren't normally situations where it would be more than just the destination and destinations are defined based upon where federal travelers are going. You know there's an estimation even though it could be a remote location.

We do things by seasonality. In other words, to collect the data you typically present it in 12 segments.

I'll let Jill explain. It’s based upon daily rates. We are getting data for every night and then they are applying a totally user-defined methodology for that

Should we talk about seasonality of per diem?

I don't want to speak for her.

They put their methodology in and come up with the answers. We are simply plotting the raw data.

One other thing that I like to point out about hotels there is the Fedrooms program. A lot of benefits associated with that for federal employees where late cancellation policy, check out, a lot of hotels actually offer free Internet, that’s the program that's been established years back and has been growing and I think it's trying to take a look at fire safety and all, there are benefits there.

Our data shows rates about 95% of per diem on average (for Fedrooms).

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That's good. So if there aren’t any more questions for Steve? Great. All right thank you very much Steve.

You're welcome. I’ll be glad to follow up information. I will touch base to see what Craig and Jill has to share.

Steve gave us a little background about the hotel industry itself and some of the terms and data available there. I think we are going to try and see if we can find some additional data related to government hotel spend and see where we can share. I’m sure GSA will try and collect their stuff from all different sources. Customer pay to come from the TMC's, from the actual ETS system so they try to collect and put it all together. Sometimes they have some duplicate information in there and there's also information missing related to depending upon how the traveler gets reimbursed if they're going to other categories instead of under the hotels so there could be missing some data but we will see what we can get related to government and try and segment it out from there.

We are going to have Jill present. She's going to talk to us about per diem rates in general and the methodology behind that. She is currently out right now at a meeting. She should be back in a few minutes. So right now at this time I'd like to propose a 10 min. break and we will meet back here in the room by 3:00 and Jill should be back by then and we will get started.

The meeting is on a break until 3:00 p.m. ET

We are waiting for a couple more people to come back into the room and we will get started on the rest of the presentation.

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Okay. It looks like we are all here now. Hopefully everybody on the phone was able to get back. I want to just say I really appreciate the input coming in and giving us the presentation on the hotel industry and the data provided and I just want to open it up for more time and if we have any more questions for Steve before we leave, is there anything that you guys have related to his presentation?

Right now I want to open it up to Jill Denning, she is the Program Manager at GSA for Per Diem. She's going to talk to us about the GSA per diem rate-setting methodology for the Continental United States and I believe we are probably going to have a lot of questions for you Jill because some came up earlier and we had to wait for you to come back and answer those so I think we will ask them. We are getting to know each other a little bit better and they're not a shy group.

Jill Denning begins her presentation.

Hi everybody. Thanks again for being here, hopefully everybody can hear me. I'm going to go ahead. First we're going to talk about lodging methodology, just focus on the lodging right now. In accordance with 5 USC 5702, GSA has the authority to set per diem rates, to fairly reimburse federal employees for their expenses and apply applicable laws. For this particular group it might be important to go over at least a little bit about where we have been, how far we have come. Almost, but not quite 100 years back, starting back in 1926, Congress passed the Subsistence Act in 1926. You can see on the slide, actually you could do actual expenses and outside of CONUS the per diem rate was seven dollars with an average of eight dollars actual. So fast forwarding quite a bit to 1971, 42 years ago, the authority to

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set the CONUS rates transferred from what we now know as OMB, but it used to be called the Bureau of the Budget. So GSA started setting per diem rates 42 years ago. To show a couple more points along the scale, in 1975 the per diem was raised from 25 to 35 per day and in 1980 from 35 to 50. Then moving to 1986, the law ushered in the more modern per diem rate structure that allows GSA’s Administrator to set locality-based allowances. It says that rates should be set by locality whenever feasible. What we basically have in place today is called the lodging plus per diem program. People still think when it comes to lodging that if the per diem for lodging is $100, you're definitely going to get $100 but actually the per diem is a cap. It’s just the maximum rate that people can be reimbursed. And you can only get the actual amount that you spent up to that rate. So if the spend is $95 (on lodging) and your maximum rate is $100, you're only going to get reimbursed $95, not the full $100. Per diem lodging is not the same as the meals rate, if its $46 for meals you're going to get $46. In general we don't have to show the actual costs for meals like we do for lodging.

In 1990 the Congress passed the Hotel and Motel Fire Safety Act. The important thing for us to know is that that does require us to do studies on only those properties with FEMA IDs and sometimes that can be a challenge for us. I will talk a little bit more about that later. Finally the history section is starting to wrap up. Kathy Lane noted that in 2002, 2003 the Federal Advisory Committee set the methodology we have today. The previous methodology before then was that we were making phone calls to hotels to ask them what they were charging, and we all pretty much agreed that wasn't working very well in terms of reliability for the methodology. In fiscal year 2005 that's when

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the methodology we currently are using came into effect. So that's almost 100 years of history in 5 minutes. Certainly feel free to ask questions.

As far as process of who sets per diem rates, a lot of times I think people think the GSA sets all the per diem rates in the world. That's not the case. GSA sets the rates for the lower 48 states, the Department of Defense sets the rates for territories, Alaska and Hawaii; and the Department of State sets the rates for the other foreign areas. And their methodologies are not the same as what I'll describe today for the lower 48 Continental United States. So for the continental lower 48 states we have two different types of lodging rates. There's the standard rate which actually covers a good part of the United States. There are about 3000 or so counties in the Continental United States and the standard rate actually applies to about 2600 of them. And right now, we look at the standard rate every three years and the last time it was looked at or changed was in fiscal year 2011 from $70 to $77. If you add three fiscal years, then 2014 is the year that we're looking at it again. No decisions yet.

And then probably what people tend to focus on more are the nonstandard rate areas and those are areas where at some point along the last 42 years or so people have said that the standard rate no longer works. They are unique areas that federal agencies have identified as needing higher than the standard rate. For FY13 that applies to 393 areas across the United States. And currently, our methodology is that we look at the nonstandard rate areas every year. So once again, standard is every three years and then nonstandard areas every year.

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When we did our last standard rate study, $77 was the rate. If we do a study and the location was $78 in FY2013 but we did the study and now all of a sudden it drops to $77 which is the standard rate, we will move that location into the standard category.

The standard rate is the default and the only way that it moves from standard to nonstandard is if a federal agency has a problem getting the standard rate in a certain location, so at that point they will let us know where they're having trouble. They'll let us know that the standard rate doesn't work for them and then we will do a study.

The rates only apply directly to federal employees.

How would you determine whether it's going to move to nonstandard? I guess what I'm getting at is more of a long-term change that the study identifies as opposed to a one time event that requires actual expense?

If somebody writes us a letter and says we had a hard time getting the per diem rate this one time, then we’ll probably say to the agency, you know maybe you should look at doing the actual expense allowance first.

In general, our internal policy is that we trust the agencies to let us know when they are truly having an issue.

Is there any data validation just to double check the agencies? What’s the perception on that? This is Brian from Deloitte. I’m likening it to similar inquiries we get as a commercial program from the field, maybe an office it may be a project team servicing a client can we certainly respect their opinion and input, but we

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always validate it with data just to make sure that they are not missing something or that we have the complete picture. Is there a process like that in place for the nonstandard rate areas?

Just to make sure, not to discount what the agencies are saying, just to validate it and maybe there's some things about the market that they don't understand or have misperceived that a little additional research to validate it might uncover.

We certainly keep up with the trends in different locations throughout the year. And if we do get a special review request, I'll even look at news articles and see what might have been taking place over the year and see if there might be if something like a one time event that took place. I think for example a few years ago in Lexington, Kentucky there was an international horse show that comes around about once in a generation or something.

You have to look at why you're having trouble and if you really need the review since it comes only once in a generation. We do research like that.

Generally Jill with high rent districts in the U.S. like San Francisco or Manhattan, they'll have a nonstandard rate, correct?

She makes that determination based on the data she gets from the travel reports.

Let’s allow Jill to go on with her presentation.

Sorry about that Jill.

Interesting concept. That's what we're here for.

I think we can move onto the next slide. Once again we identify the zip codes for federal travelers, it doesn't necessarily have to

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be a whole county that is used for the sample, it can be just a couple of different zip codes if that's all that is needed, say around the federal courthouse or something like that, and then we update the fire safety hotel list, then we work with STR to get the updated hotel information and average daily rate information. I think Steve already told you how ADR is calculated. Then usually we are analyzing the data in the summertime. Then once we've finished with the findings we present to GSA and the Office of Management and Budget and by law we have to notify Congress no later than 30 days in advance of when we are planning to change rates. So if we plan to change it October 1 for next fiscal year, we must let Congress know by September 1 so we are about a month away from that.

What source of data do you use to identify your areas that need to be included?

Over time that's come from federal agencies.

How long does that process take? From start to finish?

Well for the annual rate-setting process, we can get the information from agencies at any time but normally we start running the data toward the end of April. And then we look at it through the summertime and get management concurrences later in July/August with OMB, and then of course by the end of August we notify Congress.

Got it.

Next slide -- this just shows you a little different visual, but the sample comes from intersection of these three circles. And we talked about a little bit about the zip codes, FEMA IDs, and the

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chain scales we’re using are the mid-priced properties so we’re stripping out the economy scale, and we are stripping out the luxury and we are using those four chain scales that are in between, plus independent properties that also happen to fall in the middle as well. For fiscal year 13 non-standard areas, we used a sample of 12,000 properties in order to come up with those 400 or so nonstandard rates. It’s an average of about 30 properties. We usually need at least four properties to set a rate. Steve talked a little bit about the confidentiality requirements to protect the proprietary nature of the data, so we can't just base the rate on one hotel in the county, we've got to get a few more than that.

We are only using what data STR has. We don't have yurts or condos or dorms - we do have a few bed-and-breakfasts that pop in there but for the most part it's just standard hotels. We only use Monday through Thursday data. We don't generally use weekends because people are not usually traveling for the federal government on the weekend.

The data collection time period is lagging so we can use actual data. So for example for the fiscal year 14 rate, we would take April 2012 through March of 2013 data.

(Next slide) This methodology example is not actually what I see in detail because of the confidentiality reasons we talked about. Of course these are all fake numbers so don't read anything into them. Economy properties are not included. We will find the lowest midscale property, in this example its ADR is $75, and then we find the highest midpriced property, which is usually, it depends on the market - but usually it’s an upscale or upper upscale property, to set the upper limit of the sample. So any

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property that is independent and has an average daily rate that fall in between the top and bottom of the chain scale hotels in the sample will get pulled in as well. Once again I don't see a hotel’s average daily rate, I see aggregate amounts. So one thing to point out that certainly you all might want to talk about, what the programming is looking for is pricing. You will see in this example here there's a little * by luxury, so for example if there's a property that has a nationwide brand label of luxury because the hotels as a brand reach that threshold, but in an individual market this individual property may not be pricing above what the upper upscale level charges. What the programming does, is it finds mid-priced properties based on price. So even though a property may have the national brand of luxury, if it's performing like a midpriced property it does get pulled into the sample. I think the fiscal year 13 that might've included about 50 so-called luxury properties nationwide. It's not a huge number. But I did want to make sure that that was noted for you guys to discuss.

How do you reduce the daily rate by 5% and come up with the 5%?

Let me get to that in a moment. Skipping ahead just a bit.

Once we find all the properties with our criteria, including any independents that might be in there, we come up with an average daily rate and then it is discounted by 5%. I did also note the line with two asterisks there, the final average daily rate is weighted by room count so if there are properties that are larger and have an ADR of $50 versus say another smaller property that has 50 rooms who also has an ADR of $50 that bigger property counts for more in the final determination of the rate. We are trying to help our federal employees find a room in the market. So if the

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market is weighted more toward hotels with a large number of rooms that are in the inventory that rate is going to get shifted in that direction.

To answer your 5% question, it was part of the methodology and maybe you guys previously on the 2003 committee can explain a little bit more. It was part of the methodology that was developed. I think with GSA being the premier procurement agency that tries to get volume discounts for the federal government as a whole, I believe we are still the largest purchaser of hotel rooms across the country and the 5 percent reflects that volume discount.

Perfect segue - you're taking 5% off of the kind of rates that include rates that were already discounted.

That's for you to discuss during your recommendations. Is that making sense so far?

Once you get the calculation maybe I'm jumping ahead but what is the conversation then to get the hotels to offer free amenities?

The per diem is not mandatory, it's not the law. It’s simply the reimbursement rate for the federal traveler.

Hotels can have a per diem rate and have a government rate which is not the per diem rate, which is actually higher than the government per diem rate. In some cases it makes it really hard for travelers to understand because they don't know the difference. I hear “Well I asked for the government rate. I just thought it was the same as the regular per diem rate.”

There's another misconception to that. Cut per diem by 40% and hotels don't have to take the cheaper rates. What does that do to the availability?

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It kind of depends on how much the per diem rate is, how much they charge. I don't have anything on that.

You mentioned something about seasons. This example assumes there's only one season. The way that seasons work is if there is a 15% rate break in the data for at least two months then we can set a season. We only do a maximum of four seasons. Sometimes people claim that we do five. If it happens to break between September and October because of the way our fiscal year works, the rate for October at the start of the fiscal year and September at the end of the fiscal year could be the exact same because it's a season but it looks like two separate seasons so sometimes it can look like there are five seasons total. I think DC is an example where this happens. It breaks between September and October but there truly only are four seasons.

If the occupancy for some months are higher than 70%, then we will look at a lower data break than 15% because once again we are trying to make sure employees can get rooms. So for example some of these locations in North Dakota and Texas where they discovered oil and natural gas – we are finding some of these locations have 95% occupancy every day, all the time. So if that's the case, we won’t necessarily look for that 15% difference.

Just a couple things on policy. The way that the per diem is applied for federal travelers is that per diem is based on where you work, not necessarily where you stay. So I think a lot of people don’t get that, I hear that all the time. So for example with this slide, it shows the little yellow area may just be our run area - for example, that just might be where the sample was taken from because of the zip codes and that sort of thing - but then what

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we’ll do is generally set the rate to apply out to the rest of the county or a few small cases the rest of the metro area like New York or the DC area. So even though the sample might not include every single hotel in the metro area, that's the way the rate applies. So for example if you're coming to -- actually I like to use an example of going to work at Smith Travel Research. Smith Travel Research is actually in Hendersonville, TN, which has the standard rate of $77. They are very close to Nashville. If I chose to stay in Nashville, which I don't, but if I did I would not get the Nashville rate. The rate is based on where you work, not if you want to go stay in a nearby location. The exception would be if there's absolutely no lodging in the location where you're supposed to be working, like the middle of a forest or something like that, then the rate can be based on where you stay if there's no lodging available.

Agencies do have some flexibility. I think we talked a little bit about the actual expense allowance. The Federal Travel Regulation does allow agencies to authorize up to 300% of the per diem rate. That's not supposed to be used randomly, it’s supposed to be if there's a special event in an area like the horse show or conferences, or a disaster event.

This slide here is currently in the travel regulation, called the conference lodging allowance. What that says is for a federally sponsored conference you can go up to 125%; however last fall, there was a proposed rule to eliminate that. It has not become final yet. I don't have a date on when it may or may not be final, but I just wanted to let you know it's still on the books today.

Agencies can request special reviews – the information is on our website on the FAQ page, numbers five and six. Federal

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agencies’ travel managers must let us know if there's a frequent problem and let us know once again the zip codes where people need to stay, and other information listed on the site. For the start of the fiscal year time period, we would've needed the request by April 1 in order to get it in that process. But we will also do a midyear review if you request by December 31. If the data says it should go down, it goes down. We actually get very few special review requests with the current methodology. I'd say we probably get maybe 10 per year. Somewhere between five and 10.

Between five or 10 how many are successful in getting that rate increase?

Most.

Really.

Most of the time, if there's a problem the federal agencies know there’s a problem.

Almost all of the special review requests are of standard CONUS locations. I can count on one hand the number of nonstandard areas we’ve gotten over the last few years because we look at the nonstandard areas typically every year anyway.

There are about 3000 counties in the CONUS. There are about 2600 covered by the standard rate, and there a lot of areas that don't have hotels. There are 400 nonstandard areas pretty consistently. This slide goes over the results of the last few years of how rates have adjusted each year. Actually to start at the bottom of the slide - pretty much since fiscal year 2005 -- since we started using this methodology -- fiscal year 2005 through

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2009 pretty much every nonstandard area tended to increase a little bit until 2010. In FY10 the rates started reflecting the effects of the recession which started in late 2008. But if you look at the chart once again we use data from the time period of April through March. The recession started around October 2008, for the first six months of our data collection period rates were at a higher level and then with the second half of the year rates obviously had dropped quite a bit. Our per diem rates reflected that half-and-half trend and in FY10 70% of the rates that year remained the same or increased, when the market over the next year actually had gone down. In fiscal year 2011, the rates reflected the full effect of the recession, as 82% of the rates decreased. In fiscal 2012, if you've been following the trends in travel you'll see that many of the rates did start to go up.

What would have your recommendations been for FY13 if isn’t wasn’t frozen?

I'm not sure I can discuss that option that was not chosen. I don’t think I can. Sorry.

Frustrating amount of work to do to have it be frozen.

I'm just doing my job. [laughter]

You can't blame me for asking.

You're not the first one who’s asked. That pretty much wraps up my formal comments. I do have some web references here on the last slide. It’s 3:45 p.m. I will turn it back over to you David.

I know there are some questions that were brought up earlier when Steve was talking per diem and we wanted to wait until Jill returned. I did write those down -- to remember what those were

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for you guys. Two things I have here, well three things-we talked about metric measures, total spend and total spent by category.

We just don't have the data on that unfortunately.

Referencing the 9 million year over year.

What would be the other portion? The other administrative cost, printing, personal property, fleet, motor pools, etc.

Can you focus on some efficiencies, bring up some ideas at this point or are we going to do that tomorrow?

I mean we are at about 3:45; it’s close to 3:45 right now. I know talking about efficiencies may take a little bit longer than 15 min. Since we're going to close at 4:00 and I definitely agree that is something we do need to talk about.

That's a good topic for tomorrow. Efficiencies related to per diem-lodging. It is getting close to the four clock timeframe. I don’t want to go over. I don't want to take all of your time. What are some of the other topics that you guys are thinking about for tomorrow? We do have all day. We could talk about some of the data mining associated with travel and lodging, the data collection, obstacles. Identifying sources and how to get the data.

We may not use the full eight hours tomorrow but I think tomorrow’s really going to be focused around brainstorming -- figuring out what we need to really make informed recommendations. We are going to get that data so over the course between tomorrow and then at our next meeting, hopefully there will have been enough time to actually find sources, check the data and collect the data and go into more in depth

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conversations over that data and what it means and how it impacts industry and government.

I know for tomorrow we’re really interested in hearing your feedback to the methodology that I've described, I mean the different pieces of it.

Personally I think in terms of methodology I think it's more like getting the data in and getting into compliance.

It might be helpful to get little bit more on the landscape of the existing reservation channels that are used and just a general point of reference on the compliance to them, the form of payment that's used, and the expense process and the data outputs that are available and some of the challenges they or we are having. That would I think give us a good frame of reference of what is and isn’t in place today. It would probably help us with the brainstorming because in many travel programs everything kind of starts and finishes with those fundamentals.

Leisure, wholesale, did want to talk about the great level of discount per diem already represents. Because online travel systems use the wholesale to retail rates - what's reported is the $80 versus the $100 that the customers paid.

All online travel systems have that cut, for example, Travelocity and there's another component to that, let’s bring it up tomorrow.

The government has sufficient hotels to typically stay in otherwise they would be having many more of these calls saying we don't have enough inventory, we need to make arrangements and that's not happening?

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Even with last room availability, government per diem is serving its purpose.

Some hotels do not accept the government rate but they’re held to that bar.

Explain what you mean.

Particularly with Marriott unless you have a government ID, for example, like Lockheed Martin we hold our hotels at per diem and we want the lowest rate. That’s the company decision and any hotel company can choose whether or not they wish to extend the government per diem to the contracting community. In fact if you reported per diem because you have a close business relationship, you negotiate with the hotel based on deliverables.

We usually do better in the long run.

I'm thinking out loud for the hotels, if you're a salesman, per diem rates for multiple government agencies comes out of time and negotiated rates for per diem. I’m not getting into negotiations. GSA sets the rate for the entire federal government. That's the current system.

GSA sponsors the FedRooms program. This is the only program by GSA.

Yes, that is a separate program but I was talking how we set the per diem and curious if maybe somebody could explain the program to me, the nuances and differences between your methodology in the program itself maybe the FedRooms program. I think you mentioned 5% average below per diem.

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One thing I'd like to understand maybe my colleagues could explain, what’s the business model for the hoteling business? I mean what do you need for occupancy to be profitable and what are the margins, I mean is there room there? Negotiating rates, well I mean are they really on thin margins like the airline industry, you've got to fly planes with 90 some percent full now because of margins in planes have gotten smaller, fuel costs, a lot of stuff goes into that. I’ve read a couple of books on how the airline industry works. I'm kind of curious what room is there on rates? Bumping up against labor costs.

Also competitive bid process. Strategically negotiate.

I think what we have to bring up tomorrow is a bit more about the methodology. We are not talking about a managed hotel program unless we want to bring that up as well. Something to think about in the federal government the way I see it, it has many different programs. DOD has several programs, GSA has the FedRooms program, and then there's the per diem at large which the majority of federal travel is statistically booking, not utilizing the FedRooms to the degree that maybe I think we should look at the savings and efficiencies and then overall government travel. Take a look at some of those programs and really evaluate the value of them. I think we were told to come out with some very interesting concepts, turn it upside down. I want to bring that up tomorrow not just the ideas but ways to improve it for the government.

A lot of people think the per diem is an arbitrary number - the fact that you see the rationale behind it is a solid managed hotel program. I got those blinders on trying to look at it as if the government wants to have some of these efficiencies remain in the travel program. We're talking about change, making

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government travel more efficient, but I see what you're saying. The topic of conversation. How it's calculated.

Its 4:00 now and I don’t want to go over 4:00. A lot of stuff we are going to talk about tomorrow. Most likely it won't take the whole day, just hold the block just in case we do have some other things that we'd like to discuss and Jill and Steve are still going to be here tomorrow. But I really didn't want to go over 4:00 and that's where we are at right now so I do appreciate everybody and their time today and everyone on the phone I know you didn't interact with us as much as you’d possibly like but it’s not that we had fun in the room without you. Anyway, I appreciate your time and like I said before if you have questions or comments, please submit those to our e-mail address at GTAC@GSA.gov. Thank you very much and have a nice day and we will talk to you again tomorrow.

Thank you.

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