The coalition government's announcement to make £6.2 billion savings over the next two years will mean tightened purse strings for the travel sector.
As part of the cost saving efforts, £1.15 billion will be cut from "discretionary areas", including travel costs and consultancy.
Trevor Elswood, BSI's group managing director, said the cuts would mean "challenging times" ahead. He warned hotels which rely heavily on public sector business would need to "broaden their demand and customer bases by actively seeking new business."
Simon McLean, managing director at Click Travel said the public sector would have to closely monitor its travel policies to make the savings. "What the public sector needs is a transparent, consistent and coherent travel policy engineered to deliver best value for the public purse, and it needs to be implemented and audited across the board - from ministers to minions."
Elswood agreed, saying public sector travel managers would need to plan carefully. There are "a few simple strategies to minimise impact from budget cuts", he said, such as internal meetings space management, using apartments to save on accommodation and enforcing a robust travel authorization process.
"BSI's top tip for public sector bodies looking to effectively manage spend is to take control of the direction of their business. Base the selection of accommodation on criteria (based on duty of care/value) rather than named hotels. By this simple act the public sector can take control of price and quality," said Elswood.
One way the government plans to save on travel, is by avoiding first class rail travel, reports say. Chief secretary to the Treasury David Laws said he would be monitoring any spend on first class rail travel, and may even penalise civil servants who use it.
Click Travel's McLean said the approach demonstrated a lack of knowledge of the travel industry: "Whilst we applaud Mr Laws for tackling the gross wastage in public sector travel expenditure, outlawing first class travel strikes of a typical knee-jerk reaction being made by someone who has little understanding of the travel business."
"For example, first class can sometimes be the cheapest ticket available on the UK rail network - why would you want someone to purchase a more expensive ticket to travel in standard class? Policies restricting class of service alone rarely deliver best value as there are many other dynamics that determine the price of a product - from how far in advance you book and the flexibility of the ticket, to product availability."