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ederal executives who have not yet embarked on a business trip this year are in for a pleasant surprise. Standard per diem rates are up for the first time in eight years. Last month, the General Services Administration introduced a new standard per diem rate of $80-up from $66-for travel to locations in the continental United States.The new rate allows travelers to spend a maximum of $50 per day for lodging and $30 for meals and incidental expenses.

Instituting a higher standard per diem rate has reduced the number of cities that fall into GSA's "higher-cost location" category. For higher-cost locations, GSA sets per diem rates individually. GSA determines an appropriate lodging allowance for each city and reimbursement for meals and incidental expenses is $30, $34, $38 or $42, depending on the location. In 1996, GSA determined higher per diem rates for 701 cities. This year, GSA set special rates for only 497 cities.

While the higher standard per diem rate is sure to be popular with travelers, it may not be the standard for long. "Per diem rates are something I want to reinvent," Becky Rhodes, deputy associate administrator at GSA, told members of the National Capitol Chapter of the Society of Government Meeting Professionals (SGMP) at their November meeting.

"You find a lot of mechanical flaws in the [data-gathering] process," Jack Kelly, an Office of Management and Budget policy analyst, explained at the meeting. "Our analytical process is based on the data."

GSA uses data from Runzheimer International-a consulting firm which conducts surveys on lodging costs specifically for the federal government-to determine per diem rates for higher cost locations. Typically, Runzheimer has surveyed only a few properties in each city, so one dramatically cheaper or more expensive property in a sample can throw off the numbers, Kelly explained. While Runzheimer restricts its government surveys to properties with two- and three-Diamond ratings from the American Automobile Association-five Diamonds denotes the highest quality-room rates can vary depending on whether the facility is located downtown or on the Interstate. Runz-heimer does not reveal which properties it surveys, so government analysts have no way of knowing whether surveys reflect the cost of properties located near government facilities.

GSA analysts attempt to weed out inadequate per diem rates, but sometimes anomalies slip through the cracks. For example, Runzheimer surveyed properties in Kansas City in April 1995 in order to determine the city's per diem rates for 1996. The survey coincided with a brief period of low lodging rates. "The drop in Kansas City lodging rates was an aberration," says Charlie Wilson, eastern sales manager for the Convention and Visitors Bureau of Greater Kansas City. "Our average rates are on their way up." The Kansas City chapter of SGMP told GSA that the city's 1996 per diem rates were too low, and the agency revised the rates in August 1996.

Runzheimer's surveys estimate the average cost of moderate, business-class accommodations in a city. That estimate does not include costs associated with staying in particular areas of a city, such as transportation, parking and tolls. To ensure the accuracy of per diem rates, the government needs to consider the entire picture, one SGMP member commented at the meeting. Finally, rates determined by the surveys don't reflect inflation, because the data looks back, not forward.

"The way we're going to set per diem rates in the future has not been invented yet," Rhodes said. GSA will begin its per diem reform effort by examining where government travelers go, where they stay and why they travel, she said.

Meeting Planner Woes

Government meeting planners, in particular, stand to benefit from per diem reform. Currently, planning meetings around government per diems is a daunting task.

"In my experience, it's not hard to get a room as an individual government traveler," Peter Regner, director of program services at the Federal Mediation and Conciliation Service and a past president of SGMP, said at the meeting. "But try to plan a meeting and book 50 rooms at the government per diem rate when a hotel is 80 percent occupied-you're not going to get it." Unfortunately for government meeting planners, occupancy rates have been rising since 1991.

Often, hotels with two- and three-Diamond ratings lack the space and staff to host meetings.

Meeting planners can ask their agency directors to authorize up to 150 percent of per diem. However, getting officials to approve such increases is not always easy. "Meeting travel is . . . to some extent, discretionary," Kelly noted. Agency directors may be willing to authorize higher expenses for mission-driven travel, but they expect meeting planners to shop around for a better deal.

"I'd like to take conferences out of the per diem rate process, and come up with regulations that have a separate per diem rate for meetings," Rhodes said.

The SGMP audience liked the idea. "We provide a lot of services for conferences that we do not provide to individual travelers," one hotel representative said. "These services ultimately show up in the costs we have to charge."

No matter how the government determines per diem rates in the future, the intent behind them will remain the same. "Our concern is that per diem rates compensate travelers fairly and protect the interest of the taxpayers," Kelly said.

Rates for Some Frequently Visited Cities

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