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Scandal over GSA junket won't affect travel spending, experts say

Excessive spending at a Las Vegas conference for the federal agency's employees isn't expected to have a similar effect on the industry as a retreat held four years ago by taxpayer-rescued AIG.

April 30, 2012|By Hugo Martín
  • Former Government Services Administration head Martha Johnson, left, testifies before the House Oversight and Government Reform Committee as GSA Regional Commissioner Jeff Neely listens.
Former Government Services Administration head Martha Johnson, left,… (Chip Somodevilla, Getty…)

In Washington, another scandal has broken over excessive spending during a business conference. But travel experts predict the effect this time around will be limited.

Four years ago, it was insurance giant American International Group Inc.that was slammed for holding a lavish executive retreat at a Dana Point resort after taking billions of dollars in government bailout money.

In the face of harsh criticism of excessive spending amid a recession, corporations dramatically cut back on business travel, dealing a blow to hotels and airlines across the country.

Now it's the General Services Administration that is getting heat for putting on an $823,000 Las Vegas-area conference for 300 GSA employees in 2010. Investigators found that Jeff Neely, a top GSA administrator, had spent $2,700 in taxpayer money on a party in a hotel suite, and hired a clown and a mind reader to perform.

GSA Administrator Martha Johnson resigned and two officials were fired. Since then, the agency has already canceled a couple of future meetings in Las Vegas. But Rossi Ralenkotter, president and chief executive of the Las Vegas Convention and Visitors Authority, said he doesn't expect the scandal to cut into business travel spending in the U.S..

At a travel trade conference in Los Angeles last week, Ralenkotter said the business travel industry grew more united after the AIG scandal and probably will continue to stress the importance of face-to-face meetings. "We are better positioned now," he said.

Mark Liberman, head of the Los Angeles Convention and Visitors Bureau, agreed that the effect of the controversy should be limited. "The business community has learned from past experiences, and this is an isolated incident," he said.

Business travelers cut back on food bills

Spending on business travel continued to grow in 2011 and the biggest chunk of that money went to airfare and lodging costs, according to a new study.

But it seems that business travelers are spending a bit less on food.

The average lodging charge was about $89, up about 4% from 2010, according to the study. Together, airfare and lodging represented almost 54% of travel costs in the U.S.

Meanwhile, the average food expense entry was about $38, a 4% decline compared with the previous year.

Mike Hilton, co-founder of Concur, said the drop in dining costs could reflect the business world's desire to continue to approve business trips but reduce overall travel expenses.

"The reality is that for most companies, when the price of air travel goes up, they try to get cost savings from somewhere else," he said. "Instead of eating at a nice steakhouse, you are dropping it down a notch or two."

Which hotel chain has the smallest carbon footprint?

If you want to shrink your carbon footprint when you check into a hotel, you may be better off staying at a mid-range or budget chain hotel.

That's the conclusion from a report released last week by Brighter Planet, the eco-minded tech firm in Vermont that creates digital apps and other technology to measure environmental effects. The report said the nation's hotels use 4% of all commercial building energy per year and generate 34.7 million metric tons of greenhouse gas emissions.

The most energy- and carbon-efficient hotel chain in the U.S., according to Brighter Planet, is Vagabond Inn, followed byRed Lion Hotels Corp., both mid-range national hotel chains. Red Carpet Inns, a budget hotel chain, came in third.

The upscale JW Marriott Hotels & Resorts came in last out of 75 chains analyzed by Brighter Planet.

The ranking was based on a few considerations, including the age of the hotels and the amenities offered. The location of the hotels was also considered because power companies in some parts of the country, such as California, use more renewable energy.

Such details as the size of a hotel room, in-room refrigerators and swimming pools also affect how much energy a hotel uses, said Robbie Adler, director of business development for Brighter Planet.

The idea behind the study, he said, was to push hotels and travel websites to provide travelers with energy-efficiency information and pollution data for each hotel.

"There is no reason why they can't provide you that information," Adler said. "There is a difference between hotels."

hugo.martin@latimes.com

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