Defense continues to lead the pack in federal travel spending

After a rare decrease in travel spending in 2006, agencies got back on track in 2007, with expenditures jumping $700 million to $14.8 billion, according to the Office of Management and Budget. The Defense Department continues to lead the pack in travel spending and was responsible for $543 million of the $745 million spending increase last year.

The relatively stable spending at Defense in 2007 belies the pendulum swings of the past few years. A $2.2 billion rise in Defense travel expenditures in 2005 was followed by a $1.8 billion drop in 2006. This year's upswing was caused more by moderate increases across agencies than by major changes in the military sector. The Homeland Security Department, the distant second in travel spending, saw expenditures rise $121 million. The third-place Justice Department spent $18 million more on travel in 2007 than in 2006. The State Department increased spending by $34 million to edge into the top five, nudging out the Agriculture Department, which spent $12 million less than it did in 2006.

Agencies spent $3.5 billion on flights in 2007, up about $200 million from 2006, according to the General Services Administration. They spent $2.5 billion on hotel rooms, also up $200 million. Spending on car rentals dipped $11.6 million to about $411 million.

Big names continue to dominate much of government travel spending. United Airlines held firm as agencies' top choice for flights, earning $107 million more government dollars in 2007 than in 2006, compared with second choice Delta's $10 million increase in agency business. United holds 27.4 percent of the government market share, with Delta significantly behind at 18.5 percent. While the top five airlines and hotels remained the same, there was a shake-up in spending on car rentals. Top 2006 vendor Hertz fell to No. 3 for 2007 by earning $18 million less in government business than the previous year. Hertz was surpassed by Avis Rent a Car and Enterprise Rent-a-Car, whose earnings increased by $3 million and more than $5 million, respectively, in 2007 to become the top two federal car rental vendors. Hertz commanded 18.7 percent of the market in 2006 and slipped to 14.9 percent in 2007. Current leader Avis held 17.9 percent of the market in 2007.

Government spending on hotel rooms continues to be spread over a wide range of vendors. Marriott is the top vendor for 2007, having earned $175 million in federal sales but only 7.1 percent of the market share. While GSA lists 26 top hotels, 43.5 percent of the market share is controlled by hotels not listed.