The General Services Administration this month increased to $99 from $91 the standard daily allowance for lodging, meals and incidental expenses for government travel. The 2006 rates are effective for travel beginning Oct. 1.
GSA this year set market-specific per diem rates for 384 locales, while maintaining its $60 lodging rate for areas not covered on an individual basis. In the 10 lodging markets where federal travelers book the most rooms, the standard hotel per diem average jumped from $114.90 to $120.90. Of those markets, Los Angeles, San Diego and San Antonio all witnessed a decrease, while Washington, D.C., Denver, Atlanta and Boston went up. Meanwhile, perennially pricey New York City continued to boast the highest hotel per diem, and—based on a blend of seasonal averages—hit $202, up from this year's $190.50.
GSA this year revised its approach for calculating federal per diem lodging rates in an attempt to better reflect more current and comprehensive travel data. GSA's per diem rates are based on average daily rate data from a wider cross-section of hotels and from more recent rate information than was used in previous years
(BTN, Aug. 15)."This resulted in 50 percent more properties used in fiscal year 2006 for rate-setting by including some economy, luxury and independent hotels," GSA said in a statement, adding that rates are based on average daily rates for midweek travel from April 2004 through March 2005. GSA contracted Smith Travel Research and subcontracted Runzheimer International to establish rates.
Although GSA strived in recent years to more accurately reflect actual lodging costs, room rates have risen since March 2005 when GSA completed gathering ADR data for 2006 rates. American Express said domestic hotel costs among its client base in the second quarter of this year increased to $135 from $128 during the same period last year. Meanwhile, by all accounts, both corporate rates and average daily rack rates are expected to rise in the approaching months and years, making the rates vulnerable to fluctuations.
In fact, GSA in May adjusted 2005 per diem rates in 17 markets upward by an average of 10 percent. In some cases, however, such as in Newark, N.J., daily reimbursable lodging costs jumped by more than 25 percent. The changes illustrate the difficulty of using historical data to determine fluctuating rates.
Despite the disconnect between GSA per diem rates and current data, travel buyers—particularly those whose companies contract with the federal government—see the GSA standards as a benchmark. "Many companies do look at them kind of as a guide," said Management Alternatives consultant, Carol Salcito.
Meanwhile, GSA also this year completed a new analysis of dining costs in areas frequented by government travelers, "to more accurately reflect actual prices." Daily meal allowances range from $39 to $64, depending on area.
Cy Greenidge, a GSA program analyst who handles the government's domestic per diem program, said this year's meal cost analysis is the most comprehensive since 1998. As such, meal allowances rose sharply from those issued in recent years, in some instances by $13.