AH&LA - Per Diem Rates May Be Slashed

The General Services Administration (GSA) is seeking to reduce travel costs by changing the way it calculates per diem rates (GSA sets hotel per diem rates for the federal government).  

Smith Travel Research (STR) provides GSA with room rate data from hotels throughout the United States. GSA determines hotel average daily rates (ADR) by including rates from hotels in the “mid-price range.” Those rates are gathered from independent, midscale, upscale, upper upscale properties. GSA omits rates from economy and luxury hotels from the data as it considers them outside the mid-price range (too low and too high, respectively).

After determining ADR for locations throughout the US, GSA then reduces those rates by 5% and establishes per diem rates at that discounted level.

GSA may include only lower hotel rates in the mid-price range when calculating ADR. If GSA does so, it will be intentionally reducing room rates rather than reflecting average room rates.

We need you to contact your members of Congress today and urge them to prevent GSA from artificially reducing per diem rates.

Click here to visit our grassroots website, hotelLOBBY at http://www.ahla.com/hotellobby/. You can quickly send your legislators a short message with a prewritten letter than can be customized asking that they oppose per diem rate manipulation.

Please contact the GSA office for your state

In addition, to contacting members of Congress, hoteliers should contact their local GSA offices.  GSA is divided into regions that are led by politically-appointed regional administrators and they are very strong voices within the agency.  Those regional administrators are from the areas their regions cover and are extremely sensitive to issues impacting those within their regions.

When those regional administrators are contacted about certain issues, they communicate those concerns internally.  GSA headquarters needs to hear from every regional administrator that there is strong opposition to this proposed change in per diem methodology.

Points to make when speaking with local GSA offices:

• GSA is considering policies that will effectively punish hotels and their workers.
• Existing per diem methodology was established in 2003 after an 8-month study by the Government-wide Per Diem Advisory Board.
• Per diem rates are intended to reflect, not establish, average room rates in markets throughout the country.
• GSA incorporates average daily rates from the “mid-price range” which are rates from independent, midscale, upscale, upper upscale properties.  GSA omits rates from economy and luxury hotels from the data as it considers them outside the mid-price range (too low and too high, respectively).
• The existing methodology already sets per diem rates 5-15% below actual market rates, creating a significant discount for the government already.
• The current methodology creates artificially low room rate data by including highly-discounted rates paid by online travel companies like Expedia and not the actual retail prices paid hotel guests.
• The data includes group room rates and treats those rates as standard room rates.
• If GSA establishes unrealistic per diem rates, government employees will not be able to find rooms offered at that rate in areas where they travel.
• Government employees will have to stay miles away from their meeting locations, driving costs up by having to pay for transportation.
• In addition to government, private businesses often base the rates they are willing to pay on federal per diem rates – manipulating the methodology will have a massive negative impact on the lodging industry.

Please find the name and contact information for the regional administrators below listed by the states they cover:

Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont
Robert Zarnetske, Regional Administrator
(617) 565-5860
robert.zarnetske@gsa.gov

New York, New Jersey
Denise Pease, Regional Administrator
(212) 264-2600
denise.pease@gsa.gov

Delaware, Pennsylvania, southern New Jersey, West Virginia, Maryland (except Montgomery and Prince George's counties) and Virginia (except the cities of Alexandria and Falls Church, and Arlington, Fairfax, Loudoun, and Prince William counties)
Sara Manzano-Diaz, Regional Administrator
(215) 446-4900
sara.manzano-diaz@gsa.gov

Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee
Shyam Reddy, Regional Administrator
(404) 331-3200
shyam.reddy@gsa.gov

Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin
Ann Kalayil, Regional Administrator
(312) 353-5395
ann.kalayil@gsa.gov

Nebraska, Iowa, Missouri and Kansas
Jason Klumb, Regional Administrator
(816) 926-7201
jason.klumb@gsa.gov

Texas, Louisiana, Arkansas, Oklahoma, and New Mexico
J.D. Salinas, III, Regional Administrator
(817) 978-2321
jd.salinas@gsa.gov

Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming
Susan Damour, Regional Administrator
(303) 236-7329
susan.damour@gsa.gov

Arizona, California, Hawaii, and Nevada
Ruth Cox, Regional Administrator
(415) 522-3001
ruth.cox@gsa.gov

Alaska, Idaho, Oregon and Washington
George Northcroft, Regional Administrator
(253) 931-7100
george.northcroft@gsa.gov

Washington, DC, Maryland (Montgomery and Prince George's counties), and Virginia (the cities of Alexandria and Falls Church, and Arlington, Fairfax, Loudoun, and Prince William counties)
Julia Hudson, Regional Administrator
(202) 708-9100
julia.hudson@gsa.gov

 

©2012 American Hotel & Lodging Association


Logos, product and company names mentioned are the property of their respective owners.

Reader Comments:

Be the first to leave a comment for this article

Tweet #HotelNews Tweet #HotelAssociation Tweet #AH&LA Tweet