Obama urged to scrap US spending squeeze

UK industry leaders have urged President Barack Obama to scrap new laws that will require US companies that were assisted in the recent $700b (£496b) bail-out to cut spending on business travel.

The US Treasury Department announced new regulations for companies that have received funds from the Troubled Asset Relief Program, which means recipients must cut down expenditure related to conferences, incentives and events.

In response, the largest hotel groups in the USA, including InterContinental Hotels Group, Hilton, Fairmont, Marriott and Starwood, have written to Congress warning that business travel is a major job creator that injects more than $240b (£170b) into the economy and should not be portrayed as a perk.

The move will also have serious consequences for hotels in London and across the UK and Europe, warned David Hornby, commercial director of Visit London.

"Many US companies receiving this funding have European headquarters in London, so there would not only be an inbound problem but also issues here on our soil as well," he said. "The USA is a major international market for London. Restricting overseas conferences and the cancellation of incentive or reward programmes to the UK will have a detrimental impact on our own meetings and venue market."

David Clarke, chief executive of hotel consortium Best Western, said meetings and conferences are vital, even during the recession. "The need to meet and co-ordinate people and their functions across a distributed workforce does not diminish, it just becomes more focused," he said.

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By Gemma Sharkey

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