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Is the Government Giving You the Business?

By Eileen Higginbotham, C.H.M.E.

Is Government Business Right for you?
Year-round, the federal government — civilian and military — is the biggest single user of hotel rooms in the country. And, in my experience, federal travelers tend to be very loyal to the hotel they like. They return often — and they travel “in packs.” If one federal traveler is staying with you, very likely 10 or more are also staying at the hotel down the street. To help you access your government prospects and ask them the right questions, we introduce some ‘govspeak,’ some key “code” words and regulations that define this market. If you would like to learn more about how to penetrate, market and sell to this lucrative market, read on.

Here are some basic facts to get you started:

People traveling on federal government business use 60 million room nights annually.
Federal government employees personally spend $7.5 billion dollars on non-official travel.
Total hotel room revenue for federal travel in 2005 was approximately $6 billion dollars.
Approximately 10 to 15 percent of federal travel is overseas.
Over 93,000 federal travelers are on the road each night.
Approximately 40 percent of these travelers are women.
More than 90 percent of federal travel is mid-week business, the exception being extended-stay.
Leisure travel is both mid-week and weekends. Just think of all of the retired and active federal employees — the numbers are huge, and there are ways to tap into this market.
Unless you are in one of the 400 to 500 areas that are above the per diem for federal travel, the per diem for the continental United States (CONUS) is $60 per night. (Note: The federal government and state government per diem rates are not always the same.)
You don’t need to be located next to a huge federal building or military base to get government business. Think FEMA or IRS or Department of Agriculture — they go everywhere.
Top 10 cities include Arlington and Alexandria, Va.; Washington, D.C.; San Diego; San Antonio; New York City; Atlanta; San Francisco; Chicago; and St. Louis.

[Editor’s note: Facts above provided by the Society of Government Travel Professionals (SGTP, www.sgtp.org)]

Is government business right for your hotel? Here are some questions to better understand if you can and want to make a commitment to doing business with the government.

With answers to these questions in hand, you are almost ready to move on to your working strategy to better target the government market. First, though, you should analyze where you currently are with government business.

Now you’re ready to start talking with your hotel team to formulate a specific marketing strategy that will include the action you need to take, when you need to do it, who will be responsible and how much it will cost.

Know the Language and Some Key Code Words
Getting to know the complicated language of the federal government, at least some key “code” words, will help access your potential prospects. Plus, understanding a few of the many regulations will help you to ask them the right questions. I strongly suggest that before your first sales call, learn the basic language and regulations needed to communicate effectively within the government market. Whether you plan to increase your contribution of individual federal travelers or you are going after major contracts, you will need to know some of the basics. I have found that good research and an understanding of some of the regulations can save a lot of frustration. Don’t hesitate to ask questions. Federal employees know how complicated it is to do business with the government and I have found them to be very helpful. In what follows, the term “government traveler” is used as an umbrella term for federal civilian and military employees.

1. Get a FEMA number
Federal Emergency Management Agency (FEMA) is now part of Homeland Security. What are the requirements? The Hotel and Motel Fire Safety Act of 1990 states that federal employees, when on official travel, should stay in fire-safe accommodations. Each federal agency must ensure that at least 90 percent of travel nights are spent in such properties. Some agencies, such as the Federal Emergency Management Agency (FEMA), require 100 percent of travel nights to be spent in approved accommodations. Similarly, conferences, seminars, and other meetings, funded in whole or in part with federal funds, must be held at facilities with fire-safe accommodations. You can easily sign up online at www.usfa.fema.gov and it’s free. To qualify, your property needs to have an automatic sprinkler system, with a sprinkler head in each guest room, and have smoke detectors in all of the rooms and public areas.

2. General Services Administration (GSA)
The GSA sets CONUS (continental U.S.) per diem rates and federal travel regulations (FTR). After you have obtained your FEMA number, which can take several months, be sure to go to the GSA site (www.gsa.gov) to list your hotel as participating at or below the per diem.

3. Federal Government Per Diem Program
This is an allowance for lodging (excluding applicable taxes), meals, and related incidental expenses. The CONUS is defined as the 48 contiguous states and the District of Columbia; per diem rates are established annually by GSA for travelers on official government business to use for their lodging, meals and incidental expenses. As of 2004, the lodging rate is established from information provided by Smith Travel Research based on the area composite ADR combining all hotel tiers. The standard CONUS per diem rate is $60 for lodging (excluding taxes) and $28 for meals and incidentals. More than 450 locations have per diem rates higher than the standard $60. These locations can be found at www.gsa.gov/perdiem.

4. Commercial and Government Entity (CAGE)
This is a vendor ID number and is very important if you plan to sell to the defense agencies. Contact the agency you are interested in or go through the Procurement Technical Assistance Center (PTAC).

5. Central Contractor Registry (CCR)
All U.S. government contractors are required to register in the Department of Defense Central Contractor Registry. You must obtain a CCR if you are participating in bids over $25 million. CAGE codes are either assigned during the CCR process. To register you will need to obtain a Dun and Bradstreet number, also known as a DUNS, which can take about 30 days. Contact Dun and Bradstreet at 800-333-0505.

6. Cost Reimbursement Contractors (CRC)
Cost reimbursement contractors are companies that produce goods and services for the federal government. They actually use more rooms annually than the federal government. There can be a considerable amount of travel between the contractor and the federal agencies involved. These companies are located all over the country not just near major federal installations. Think toothbrushes for the military — who supplies them? There are a number of web sites that list government contractors.

7. Federal Executive Board (FEB)
Each office has an executive director and is sponsored by various departments and agencies. There are 28 locations throughout the U.S. in major cities. They have great demographic information, hold quarterly board meetings and provide regional emergency assistance and interface with Veterans Affairs. The FEB is a great source for finding local contact people and to learn which agencies are doing business in your specific area. You can research the FEB at www.feb.gov.

8. Federal Premier Lodging Program (FPLP)
Sign up! This is a very important initiative for managing the lodging process that is administered by Carlson Travel for the GSA. To apply for FPLP status log onto www.fedrooms.com. Carlson has made it simple to apply.

As you can see, it’s a big business with a code language, lots of acronyms and lots of regulations. Access and success simply requires a basic education in this vocabulary.

— Eileen Higginbotham, C.H.M.E., is president of Hotel Marketing Resources (www.hotelmarketingresources.com). She can be reached at 847-358-5779 or eileen@hotelmarketingresources.com.

Please watch next week for a second article by Eileen Higginbotham. She will discuss specific selling strategies that can become part of your action plan.

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© 2006 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For more information on reprints of this article contact Barbara Sherer at (630)554-6054.


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