The Facts of the Matter
- PAL has made a variety of improvements to all its lodging facilities. One out of five rooms in the inventory has been built new in the past seven years.
- Guest satisfaction scores have increased.
- The average age of buildings since privatization has decreased from (weighted average) of 42 years old to 29 years old.
- GAO confirmed the Army’s estimates of cost avoidance of more than$600 million in lodging costs for official travel, compared to a baseline of full per diem.
- The Army’s privatized lodging program did not seek or receive government funding during the Pandemic. Non-privatized Navy and Air Force lodging programs sought funding from DoD’s portion of the CARES Act.
- PAL was designed to be flexible, and the notion that the privatization plan was delayed is inaccurate. The plan and timeline evolved, in partnership with the Army, to build more new hotels, rather than renovate hotels. The privatization plan wasn’t delayed – it was changed and improved.
- GAO’s chart in the report was unfortunately cropped to show only ten of the forty PAL installations. Overall, there is more new construction in the program than GAO elected to show. The unedited chart follows below, providing a clearer and more accurate snapshot, representing a total of 2,653 new hotel rooms built to date:
A Clear Case for Privatization
Non-privatized DoD lodging programs cannot quantify the total costs of their programs nor notable improvements to the facilities. The fact that the Army has more than a decade's worth of reliable data and shows tangible improvements – for example, one in five rooms in the inventory have been built new over the past seven years – makes a strong point in the case for privatization.
By contrast, the Navy, Air Force and Marine Corps still operate a non-core function and have lodging facilities that continue to age. They cannot produce basic metrics to measure performance, operating costs to be known, or cost avoidance to be reliably calculated. The GAO report specifically notes issues with OUSD(P&R) oversight of their respective lodging programs, which are non-privatized lodging programs. This is why non-privatized lodging numbers are not included in the GAO report.
It is Lendlease’s top priority to deliver lodging accommodations that meet the unique needs of today’s military travelers. Operational efficiencies, new hotels, and renovations afforded by privatization better serve those needs and align with the Army’s objectives of PAL, which is to improve the quality of life for military travelers and their families. We stand by that objective and proudly share our results, clearly demonstrating the success of PAL.