Weary Travelers Search for Rest
hese days, when you head out on the road, you're even more likely than usual to be told there's no room at the inn. With occupancy rates in some major cities topping 70 percent in the first half of this year, the cost of sleeping over is shooting up. In New York, Boston and San Francisco, room rates are up 9.4 percent over last year, according to Tennessee-based Smith Travel Research. In San Diego, the No. 2 federal travel destination, rates are up 15.5 percent over last year. Such numbers give the lodging industry little incentive to make rooms available at the government rate.
In the past two years, room rates have climbed 12.7 percent nationally, according to Business Week magazine; at the end of June, they averaged $77.50. The government pays an average of around $95 a night for a room, reflecting travel to high-cost areas. Room rates are at a record high almost everywhere, says Maura Nelson of the American Hotel & Motel Association. "Supply and demand are working in the industry's favor right now," she says.
Industry watchers expect more of the same. "Unless something drastic happens," says Marriott vice president Fred Miller, "demand [should] continue strong in city center locations for the next two years."
Unappealing Choices
Federal travelers rank lack of rooms among their top three gripes. It's common, many report, to be told that no rooms are available at the government rate. When that happens, weary road warriors face a short list of unappealing choices:
- Search for lodging farther from the work site and deal with the cost and hassle of arranging transportation.
- Take the convenient room at the higher rate and deal with the hassle of submitting paperwork to be reimbursed for the difference.
- Take the convenient room at the higher rate and pay the difference.
Stuck with these options, most blame the federal per diem system. Marriott's Miller thinks the per diem rates and the fact that hotels must pay commissions on those discounted rates force some hotels to "close out the rate sooner than they would like."
Controversy surrounds the pesky per diem rates; both the lodging industry and federal travelers often express dissatisfaction with them. "They think it's a bingo shot," says Peggy Wood, deputy director of the General Services Administration's Office of Governmentwide Policy, which sets the rates. "They think we've got a lottery going on here."
Setting Per Diems
So how officials set those rates that have so much power over where you lay your weary head?
Each spring, a GSA contractor randomly surveys two- and three-star properties as rated by the American Automobile Association and Mobil guides. The properties, all within the continental United States, must be on the Federal Emergency Management Agency's master list of properties that meet the requirements of the Fire Safety Act. In some high-travel destinations (like Atlanta, Miami and Washington), the contractor surveys hotels and motels only in ZIP codes where federal travelers stay most often. To get the level of accuracy GSA demands, the contractor surveys most of the properties that qualify.
The contractor generally interviews the general sales manager of each property, asking extensive questions about rates (including seasonal variations and other factors), the number of rooms and how many are available at the government rate.
With that data, GSA sets the per diem to ensure that the number of rooms available at or below that amount will more than meet the government's need in each location each night.
After the Office of Management and Budget reviews the proposed rates, they are published in the December Federal Register; they go into effect in January.
If a traveler can't find a room within the per diem, the Federal Travel Regulations allow agencies to reimburse the traveler's cost up to 300 percent of the maximum per diem.
However, many travelers choose instead to go farther out of town to a cheaper hotel or motel and rent a car. That skews the accuracy of GSA's numbers, because the per diem can be based only on where federal travelers actually stay, not where they wantto stay. "We'd rather [people] stay downtown and file for the extra money. Then we'd get accurate data," says Jim Harte, travel team leader at GSA.
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