NDTA's Passenger Travel Services Committee (PTSC) provides the opportunity for open communication between government and travel industry decision makers to improve programs, trends, policies, and other issues that impact the government traveler and the travel industry. Primary objectives are to facilitate dialogue, bridge any information gaps, and promote education of the travel industry. "Going GREEN" is a "bright idea" that may be added to PTSC discussion points. We'll keep you posted.
PASSENGER TRAVEL SERVICES COMMITTEE
PARTNERSHIP in Motion
Dr. G.R. "Rocky" Mobaraki, MBA, PhD
The Hertz Corporation | Director, Government Sales
The NDTA Passenger Travel Committee (PTSC) has been very busy this past year working with the government and industry to enhance official travel programs. PTSC members come from military, government, and those companies that implement and manage programs encompassing all facets of passenger travel including air, rail, bus, hotel, car, and travel agencies, as well as the travel publishing and electronic systems that support passenger travel. The efforts of the PTSC are probably more important to our NDTA members than most probably realize. The following article will briefly summarize the key issues the committee has been working on since the last NDTA Forum in Memphis.
The GSA airline city pair program, which is valued at more than $2 billion annually, is the program that determines what airline a government traveler utilizes between specific destinations. Although the airline industry participates in this program voluntarily, they continue to encourage the government to work with them jointly to enhance and improve the program. Two major concerns of the airline industry are the need to limit capacity for deeply discounted fares and to implement ticketing time limits. By limiting capacity, the government would be allotted a set number of seats on flights rather than having all seats available at deep discounted rates. Ticketing time limits would require tickets to be purchased within a specific time from when the reservation is made. Currently, the government can hold reservations up to flight departure time and purchase or cancel reservations at the last minute. When such cancellations occur, the airline is forced to fly an aircraft with unsold seats because government city pair airfares are completely refundable. While these proposed changes might not appear advantageous to the government on the surface, it does is allow the government's airline partners the opportunity to manage their business more effectively, which therefore helps encourage the airline's continued participation in the city pair program. For 2008, the program will loose three airlines because the government has not considered these changes. One additional airline has elected to offer rates for domestic flights only and not international routes.
When government travelers arrive at their destination airports, most rent cars to complete their trips. These travelers spend approximately one-half billion dollars annually on car rentals. For almost 20 years, the Surface Deployment and Distribution Command (SDDC) car rental agreement has provided a comprehensive TDY and leisure travel program for the government. Prior to the current program, GSA managed a car rental program with rates based on a percentage discount off of "rack rates." Rack rates are standard published rates available to the general public and are often the highest rates available. Liability coverages were not included, nor was Loss Damage Waiver (LDW)/Collision Damage Waiver (CDW) or unlimited mileage. Additionally, competition was limited with only a few car rental companies participating, thus receiving most of the business. In many cases, small businesses were unable to compete, and when contracted companies were out of cars, the noncontracted companies would often charge much higher rates. Another disadvantage was that because of limited competition, when contracted companies had cars available, noncontracted companies could not be utilized even if they offered lower rates.
In today's agreement, each of the more than 20 participating car rental companies must agree to abide by specific requirements. Each company provides ceiling rates that prevent the government from being overcharged when demands are high because the ceiling rates are the maximum amount that can be charged. Each company adjusts rates below ceiling to compete for business. Additionally, the government agreement lowers age eligibility restrictions from 25 to age 18 for official travelers and provides loss damage waiver and maximum liability of up to $300,000. These are just a few benefits that the government program offers. The business model of this program is simple and beneficial for both the government travelers and the car rental companies. The government car rental program is considered by industry and many government personnel to be the most effective of the various government travel programs. That success is due to the strong partnership forged by the government and industry, keeping the needs of all parties in mind.
In the area of official lodging, Federal Government travelers booked more than 20 million room nights annually, encompassing more than $2 billion in room nights stayed (according to Fed Rooms in 2007). The lodging industry continues to work with the government to ensure that the programs meet the needs of the government and travelers as well as industry. One specific item is lodging per diem and the need to set prices that are reasonable. Lodging per diem is the maximum amount a government traveler can receive for reimbursement while on official government business. Most locations within the United States (approximately 3000 counties) are covered by the standard CONUS amount, currently $60. Approximately 400 other locations in the United States such as Washington, DC, New York, and San Francisco have lodging per diems that are considered nonstandard, meaning the rate is above $60. Per diems are established calculating an average rate that rooms are rented for in a given area. Only lodging establishments that meet the specifications of the Hotel and Motel Fire Safety Act of 1990 are considered when establishing the average rate and setting per diem.
The government has several hotel programs for TDY travel including Fed Rooms, Lodging Success, and Navy Elite. Though all of these programs have merit and offer benefits to the government and its travelers, there are strong advantages in consolidating the programs or even reducing the number to one lodging program for the entire government. With the current structure, government travelers as well as hotel personnel are often confused about which program should be utilized when making reservation or checking-in. This often causes frustration for the traveler. Additionally, managing multiple programs is more costly and time consuming for the lodging industry, which increases per night costs to the government. When further considering the financial aspect of government hotel programs, the government loses buying power at individual hotels because the revenue is not consolidated.
The government continues with the implementation of on-line booking systems--the Defense Travel System (DTS) is now widely used by active duty personnel and Department of Defense employees, and the E-Gov Travel Service products (E2 Solutions, FedTraveler, and GovTrip) are being utilized by Federal Government employees. Even with these systems, travel agencies continue to play a vital role in the government travel process. Travel agencies ensure that electronic reservations are processed correctly and provide valuable data to the government. Additionally, government-contracted travel agent companies continue to assist travelers with phone reservations, booking airline tickets, rental cars, hotel accommodations, and more. The travel agency industry is concerned with any initiative the government may undertake that would ultimately result in a negative impact on travel agency profitability or result in a reduced revenue stream. Such actions would have an end result of increased cost to the government traveler because travel agencies would be forced to pass on costs to the customer.
In the final analysis, all aspects of the passenger travel programs are linked together to provide the best possible travel experience to our military and government travelers. The PTSC will continue to support the government and travel industry initiatives to maintain or improve value added programs that will benefit all stake holders. The PTSC is proud to have played a helpful role over the years in continually improving official travel programs.
In closing, I would like to give a big NDTA Welcome to Norwegian Cruise Lines, our newest NDTA and PTSC member. It is notable that NCL is our first American flagged cruise line since the demise of the S.S. United States, which, incidentally, they also own and plan to restore to her former glory. We are looking forward to working with NCL closely, and we particularly want to thank them for donating a Caribbean cruise as a prize for this year's Forum. If you are a PTSC member or perspective PTSC member, I look forward to seeing you at our PTSC meeting in Charleston. Check the NDTA Forum Web Site, www.ndtahq.com/forum.htm, for details of meeting time and location.
Dr. G.R. "Rocky" Mobaraki, MBA, PhD
The Hertz Corporation
Director, Government Sales
PTSC Vice Chair and Airline Committee Subcommittee Chair
Mr. Denny Clifford
Director, Military and Government Sales
Car Rental Subcommittee Chair
Mr. Mike Washkevich
Director, Government Sales
Avis & Budget Rent A Car
Hotels Subcommittee Chair
Mr. Scott Lamb
Director, Government Sales
Hilton Hotels Corporation
Travel Agencies Subcommittee Chair
Ms. Kelly Kuhn
President, Carlson Wagonlit...