In what is widely considered a win for the hospitality industry—or at least not a loss—the General Services Administration (GSA), which sets travel per diem rates for the entire federal government, in mid-August froze per diems for the next fiscal year at the current rate.
“While certainly not ideal, the rate freeze is a far less radical approach than the crippling move that GSA had contemplated,” the American Hotel & Lodging Association released in a statement.
Industry groups heavily lobbied government officials for the GSA not to change its method for calculating per diems. Per diems figure heavily into the selection of venues for government meetings because government employees must use their per diems to pay for rooms and most meals at off-site, government meetings.
The GSA had considered eliminating upper-upscale hotels when figuring average daily rates for purposes of setting per diems. Industry sources say such a change could cut per diems up to 30 percent in some areas. Previously, the GSA had eliminated the highest and lowest classes of hotels when figuring rates.
The standard federal per-diem rate, which applies to 2,600 markets, remains at $77 for hotel rooms and $46 for meals. Higher, non-standard rates—which apply to the country’s 400 top markets and are set individually—remain frozen for fiscal year 2013.
The frozen rates will save the federal government about $20 million next fiscal year, according to the GSA, suggesting that rates would have otherwise risen under the traditional per-diem calculation.
President Barack Obama in November directed federal agencies to reduce their travel budgets by 30 percent in FY2013.