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Corporate Travel

US travel groups issue guidelines for TARP recipients  Feb 09, 2009

A coalition of eight travel groups released a series of suggested guidelines today for how companies receiving Troubled Asset Relief Program funds should spend their money for business-related travel activities.

“General policy statement: The CEO shall be responsible for implementing adequate controls to assure that meetings, events and incentive/recognition travel organized by the company serve legitimate business purposes and are cost justified,” the guidelines state, which include encouraged policies to justify any trip exceeding $75,000 with a written statement for its purpose, not allowing expenses for such travel to exceed 15% of the company’s sales, and limits on how much you can spend per employee on “recognition events.”

The groups involved include: the American Hotel and Lodging Association, Destination Marketing Association International, International Association of Exhibitions and Events, Meeting Professionals International, National Business Travel Association, Professional Convention Management Association, Society of Incentive Travel Executives and the U.S. Travel Association.

The move comes amid public backlash over reports of corporations continuing junkets and other events even though they’ve benefited from taxpayer TARP funds.

The latest was Wells Fargo, which cancelled a lavish Las Vegas trip last week amid uproar that the bank had received $25 billion in TARP assistance. President Barack Obama has called out Wall Street for their perceived excess in tough economic times. “You can’t go take a trip to Las Vegas, or go down to the Super Bowl on the taxpayers’ dime,” the president said at a townhall meeting today in Elkhart, Ind.

Despite the cancellation, John Stumpf, the chief executive of Wells Fargo, took out a full-page ad in today’s Wall Street Journal in defense of the trip.

“OK, time out. Something doesn’t feel right,” he wrote in a letter that blames “deliberately misleading” news reports that created an impression that “every employee recognition event is a junket, a boondoggle, a waste, or that it’s for highly paid executives. Nonsense!”

Wells Fargo has, however, canceled all 2009 recognition events.

The new guidelines also include a list of approved “legitimate business purposes” such as product launches, sales conferences, training and staff development meetings, and yes, “employee recognition programs.”

Decisions by corporations to cancel corporate travel could further impact the already ailing travel and hotel industry. In Nevada, for instance, unemployment has reached a 25 year high of 9.1%.

US travel groups issue guidelines for TARP recipients
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