Feds to pay less for hotels in major cities in 2011

Friday - 9/3/2010, 6:59am EDT

WFED's Jason Miller with Jill Denning, per diem program manager, GSA

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By Jason Miller
Executive Editor
Federal News Radio

The downturn in the economy means at least some good news for federal agencies. In fiscal 2011, federal employees traveling for work will end up paying as much as $10 less per night for hotels in major cities across the country.

The General Services Administration announced its research showed that per night prices for hotels in most of the 378 most heavily traveled areas around the country will cost less next year, said Jill Denning, GSA's per diem program manager in the Office of Governmentwide Policy.

Of these 378 areas, 310 will see decreases, 50 will increase and 18 will remain the same, GSA said.

Denning said that for 2,600 areas where federal employees travel the least, the average stay will increase to $77 a night.

"We did see decreases this year more than normal," Denning said. "We could see what was coming. We looked at the time period April of 2009 through March of 2010, and the hotels have had a tough time this year with the economy. We could see the trend and the data that showed the per diem rates were going to be what they were."

The American Hotel and Lodging Association (AHLA) said in a news release that estimated lodging costs dropped by almost 6 percent as compared to 2010. The association, which represents hotel companies and industry suppliers, said the cost for lodging has increased the last four years, including by almost 7 percent annually from 2007 to 2009.

GSA calculates the per diem rate by working with Smith Travel Research, which collects data from hotels across the country.

Denning said Smith Travel looks at mid-priced properties in zip codes where federal employees say they stay. Each hotel must be certified as fire safe from the Federal Emergency Management Agency.

"We do look at the Monday through Thursday weekday data and look at the average daily rate for the group of properties in each non-standard location," she said. "Once we get average daily rate, which is the room revenues divided by the rooms sold, then we apply a 5 percent government discount, and that becomes the government per diem rate."

GSA said reimbursement for meals and incidental expenses would remain unchanged in 2011 ranging from $46 through $71 for meals per day depending on the location and $5 for incidental expenses. Denning said GSA reviews those rates every three years with the next one coming in 2012 for fiscal 2013.

Denning said the Defense Department handles the analysis and cost for car rentals while another part of GSA handles air fare through the City Pair program.

Denning said that GSA would review the prices of specific cities should agencies consistently find rates have increased. She said this year GSA reviewed about 11 such requests by agencies.

"We do have provision in Federal Travel Regulations for actual expense reimbursement so if an employee can't find a room at regular per diem rate, the agency can approve in advance up to three times the per diem rate," she said.

But Denning also said agencies should check FedRooms where all hotel rates are within the per diem prices.

GSA said 51 percent of all the Web traffic on GSA.gov to the per diem page, according to the American Customer Satisfaction Index report from April to June 2010.

AHLA detailed some examples of rate changes in 2011 for large cities:

  • Washington metro area-March through June $211down from $226
  • New York City-Manhattan fall high season: reduced to $269 from $340
  • Colorado Springs reduced to $84 from $88
  • Las Vegas--three seasons reduced to one, rates down from $118 to $93
  • Miami--for the Miami-Dade area mid-season are down to $151 from $152
  • Chicago--Early summer area high season was reduced to $166 from $211
  • Charleston, S.C.--down to $132 from $142
  • Los Angeles--reduced to $123 from $135
  • Kansas City, Mo.--down to $99 from $107
  • Cincinnati--unchanged from 2010 at $115
  • Seattle, Wash--reduced to $139 from $159
  • Huntsville, Ala.-unchanged at $86

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