Managed Lodging Responses to FedRooms Questions GTAC Meeting September 23, 2014

FedRooms is GOOD for Government and Industry Low Operating Cost for the Government ◦ GSA’s internal cost to manage FedRooms are minimal. Two government employees manage four lodging programs plus other dutes. No new staff was added for the FedRooms program ◦ The FedRooms contractor, CWTSatoTravel, collects 2.75% on room rates sold. Low Participation Costs for the Lodging Industry ◦ The FedRooms’ participation fee of 2.75% of room nights sold compares favorably to:  10% standard commissions paid by hotels  20+% participation fees charged by online consumer reservation sites, plus addition fees for priority positioning  Fixed entry fees plus a percentage of sales charged by other managed lodging programs 2

FedRooms Use and Growth In FY12 and FY13, FedRooms sold approximately 1M room nights each year. ◦ Sales exceeded $105M each year. ◦ FedRooms is believed to be the largest managed lodging program. Market share growth is affected by: ◦ Non-use of government reservation channels  Travelers do not use ETS/DTS and TMC/CTO for hotel reservations  20% of available room nights are reserved through channels  80% of reservations made through channels are at FedRooms hotels Travelers call hotels direct and ask for the ‘government rate’ ◦ Rate codes are not captured in bookings – leakage is hard to identify  Use of FedRooms hotels can be captured but not the rate code  GDS are rolling out new functionality to enable the capture hotel rate codes ◦ Policy: FTR requires use of City Pair Program airfares with exceptions; FTR recommends ‘first consideration’ of FedRooms 3

Alternatives to FedRooms The best corporate travel 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 proven No other alternative accomplishes the goals of OMB Memorandum M-12-12, May 11, 2012 ◦ OMB M directs agencies to, “expand and leverage the Government's purchasing power to reduce travel costs associated with hotels and rental cars.” ◦ FedRooms enables agencies to achieve their 30 percent travel spend reduction goal while traveling efficiently. ◦ FedRooms is the best alternative to meet goals...GSA has assessed alternatives; FedRooms is best model to meet goals of M

FedRooms – the consistently reliable choice Every day, government travelers are subjected to lodging industry marketing tactics which promote GOV rates that: ◦ Are above per diem ◦ Carry hidden fees, such as resort fees, which put the effective room night cost above per diem ◦ Subject travelers to cancellation fees that are much more restrictive than FedRooms’ ◦ Require 2+ night reservations to qualify for the GOV rate Real 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 $ plus taxes, request for refund denied. ◦ 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 reserved FedRooms rate 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. FedRooms requires no penalty up to 4:00 PM day of arrival. The cancellation fee was refunded. 5