Don’t Sweat It, They’ll Be Back

Five reasons we shouldn’t be surprised about the GSA scandal—this time or the next

Las Vegas is back in the national headlines as a place where responsible people shouldn’t be wasting their money. Last time, it was executives for bailed-out firms “blow[ing] a bunch of cash in Vegas,” as President Obama put it; this time, it’s public employees behaving badly. National media outlets and politicians such as Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, have made sure that each time they’ve mentioned the bad behavior, they mention “Vegas” as well. As our very own marketers know, irresponsibility sells better when you leverage the Sin City name.

The latest tale of profligacy began in October 2010, when the Public Buildings Service of the General Services Administration held its biennial Western Regions conference at the M Resort (which is in Henderson, not Las Vegas, a distinction lost on many out-of-town reporters). The total cost for the event, including pre-conference planning, ran to $822,750, a figure that memorably included the cost of a mind reader and commemorative coin sets. The Office of the Inspector General, in an April 2 report on the debacle, concluded that many of the expenses incurred were “excessive and wasteful,” and that organizers flouted its own rules, wasting taxpayer dollars.

But it’s not a total surprise that federal workers got caught with their pants down, and here’s why it will likely happen again.

1. It doesn’t just happen in Vegas. Remember the AIG scandal? In October 2008, AIG executives, shortly after receiving $85 million in federal bailout money, went on a weeklong retreat to the St. Regis Resort in Monarch Beach, Calif. Racking up $150,000 in dining costs and $23,000 in spa charges, the retreat inspired a backlash against lavish corporate travel—both on the taxpayers’ and shareholders’ dimes—that substantially hurt the Las Vegas convention business in 2009 and 2010.

2. The culture of coaching won’t go away. These days, many private- and public-sector employers don’t think hiring quality employees and letting them do their jobs is the right approach. Instead, they pay outside consultants big bucks to come in and coach employees on everything from listening skills to leadership styles. That’s why GSA paid $75,000 for a team-building project in which attendees assembled 24 bicycles. The culture of coaching is so deeply ingrained in corporations and government agencies that it makes sense to keep your Allen wrench handy.

3. Meeting in Vegas really can be a good deal. Las Vegas hosts more than 19,000 conventions, trade shows and meetings a year. Nearly 5 million people show up for them. When planners hold meetings in Las Vegas, both attendance and the total time delegates spend on the show floor increase. And Vegas can be cheaper, too: According to the 2011 Hotel Price Index, the average daily rate in Las Vegas in 2011 was $93; in New York, it was $224; Boston, $179, Chicago, $147. Even cities that don’t boast Vegas’ attractions can’t beat it: A room in Dallas averaged $127. So it makes a lot of sense to meet in Las Vegas—provided, of course, you follow your own rules.

4. Great expectations lead to great expenses. Even before the M had been selected as the venue, the regional commissioner in charge of the conference instructed planners to make it the biggest, best and most over-the-top conference ever held. Although some subordinates suggested that an effective event could be held on a smaller budget, they were ignored. No one wants to be the meeting planner who facilitates a quietly efficient, no-drama event; accolades, instead, go to the planner who throws a party people are talking about months later.

5. Memories are short. “Luxury Corporate Retreats Are Back,” a recent Forbes Travel Guide article trumpeted. At these retreats, attendees mix work with team-building activities such as cooking classes, golf tournaments and rock climbing at such luxe destinations as Colorado Springs’ the Broadmoor. After some down years in the aftermath of the AIG scandal, hotels that rely on luxury business meetings seem to be booming again. The GSA might stay away for a while, but other agencies and companies will be happy to spend handsomely on meetings. People will still need to assemble for business reasons, and Las Vegas will remain one of the places where they do so—responsibly or not.

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