Hotel Industry to Federal Government: Meetings Cuts Are 'Counterproductive'

Cutting spending on meetings and events is "shortsighted" and "counterproductive," according to the American Hotel & Lodging Association (AH&LA), which this week became the latest trade group to comment on the nation's "muffin meeting" controversy

AH&LA sent its letter — dated Oct. 3, 2011 — to the Honorable Jack Lew, director of the Office of Management and Budget (OMB). In it, the organization expressed its opposition to Lew's recent memorandum on excessive conference spending for federal agencies. Titled "Eliminating Excess Conference Spending and Promoting Efficiency in Government," the memo was distributed on Sept. 21 — a day after the Office of the Inspector General released a report on "excessive" spending on meetings by the U.S. Department of Justice, which was criticized for its purchase of $16 muffins. In the memo, Lew instructed all government agencies and departments to conduct a thorough review of their policies on conference-related activities and expenses. By order of President Barack Obama, he said, all meeting-related expenses must now be approved by a deputy secretary until "appropriate policies and controls are in place to mitigate the risk of inappropriate spending practices with regard to conferences."

Although it said it applauds the government's efforts to rein in waste and fraud, AH&LA said in a statement that "a sweeping approach will not solve the inherent issue and may result in unintended consequences." Further, it said, the new directive "creates a bottleneck in the approval process," "inhibits employees from carrying out their normal job functions" and, most importantly, could have "serious repercussions" on the economy.

"The indiscriminate elimination of federal travel has a significant downside for the U.S. economy and millions of Americans working in the hospitality industry," reads AH&LA's letter to Lew, which is signed by AH&LA President Joseph A. McInerney. "Business travel accounts for $240 billion in spending and $39 billion in tax revenue at the federal, state and local levels. Business meetings also allow for an exchange of ideas between employees on how to make their corporation — or government department — work better and more efficiently. Careful consideration should be given to any Administration wide policy that may result in a widespread loss of jobs for working Americans."

Instead of cutting meetings expenditures, McInerney said, the federal government should focus on controlling them. "While some measures may be appropriate, downgrading or delaying governmental conferences would be shortsighted and ultimately counterproductive," his letter continues. "During these tough economic times, we certainly recognize the need to achieve savings with respect to business travel expenses and there are many ways to do so. According to the GSA, approximately $100 million in unauthorized travel upgrades by federal employees were performed in recent years. These included upgrading to first-class airline tickets, taking a more expensive hotel room or using a larger rental car than what government per diems authorized. Controlling federal travel expenditures would be a far more effective method to reduce government travel and meetings costs than indiscriminately eliminating legitimate business conferences which will have a far-reaching negative impact on our economy."

To read McInerney's letter in its entirely, download it from AH&LA's website.