Tuesday, July 3, 2012

GSA Plans to Change Per Diem Standards

The U.S. General Services Administration (GSA) sets per diem rates for federal government travelers and is now planning to revise the standards used to set these rates for sleeping rooms and F&B.  The American Housing & Lodging Association (AH&LA) is urging a protest and encouraging industry professionals to send letters to their local legislators.  

Currently, the GSA compiles room rate data from hotels considered to be in the "mid-price range" to determine rates for every zip code in the contiguous United States (D.C. and all states excluding Hawaii and Alaska).  "Mid-price range" hotels include independent, mid-scale, upscale, and upper upscale properties; economy and luxury hotels are omitted from the data collected as being too low- and too-high rated, respectively.  The GSA then determines the Average Daily Rate (ADR) for all locations and reduces the ADR by 5% to establish the per diem as a discounted rate.

Under the new system, the GSA would base the ADR on lower "mid-price range" hotels.  The AH&LA argues that per diem rates are already well below actual room rates and this change in methodology will intentionally and significantly reduce per diem rates across the country.  The Association believes many hotels and it's employees will be put at risk- hotels already operate at thin profit margins and a reduction in per diem rates could cause job cuts.

For more information, click here.

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