Standard per diem rate will increase in fiscal 2005

Federal employees traveling on official government business outside frequently visited locations designated by the General Service Administration will be able to spend up to $60 per night on lodging -- up from $55 per night -- after Oct. 1. The standard per diem rate is based on data from the "lodging away from home" cost in the Consumer Price Index, which was unanimously recommended by the Governmentwide Per Diem Advisory Board. GSA contracts with hotels in the 420 places designated by the agency as high-travel locations, using a standard hotel industry gauge called the average daily rate. It is based on location, price, occupancy levels for seasonal locations and fire safety standards set by the Federal Emergency Management Agency.

In late August, GSA announced rate changes in the Federal Register that included per-diem decreases for lodging in several major cities, including a $7 decrease to $194 for Washington, a $6 decrease to $151 for Los Angeles, a drop from $206 to $200 for Chicago, and a $22 decrease in Atlanta, which has a new rate of $133. Some cities, such as Boston and Las Vegas, have per diem rates that are adjusted for seasons; New York City's boroughs now have separate per diem rates.

Kevin Maher, vice president of governmental affairs for the American Hotel & Lodging Association and a member of the advisory board, said the downside of basing the per diem rates on the market was that GSA used 2002 and 2003 data to do the calculations. While about 60 percent of the sites increased the per diem rate, most of the cities in the top 50 markets went down significantly. Orlando's per diem rate, which dropped more than 35 percent from $95 per day to $61 per day, is being reviewed by GSA, Maher said.

"The positive side is that next year they'll be looking at 2004 data, and so when they go to set the rates, they'll already be on the way up," Maher said. "It just happens that a lot of the larger cities have rates that were down quite a bit after Sept. 11, SARS and the global uncertainty on the war. That took its toll on urban travel … those are the rates that GSA is going on now." A GSA spokeswoman said calculating the per diem using market-based average daily rates made sense because it is what the hotel industry uses and it is the best information available.

Per diem rates for the 420 locations and listings of hotels available to federal employees are available on the GSA Web site. The agency also sets the amount that federal workers can receive for meals and incidental expenses. While it can vary, the standard base rate is $31 a day.

Twenty-one locations were added to the list of high-frequency locations, including Brownsburg and Plainfield, Ind., where federal government employee travelers will be allotted $64 for lodging. At another addition, Pinedale, Wyo., federal employees will be able to spend $78 a day for lodging from June 1 to Aug. 31, but only $60 from Sept. 1 to May 31.

Thirty-six locations were dropped from the list, including sites such as Prince George County, Va.; Moab, Utah, and Hannibal, Mo., where the lodging limit will revert to the standard rate of $60.

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