The standard U.S. allowable per diem lodging and meal rates for federal travelers, set annually by the U.S. General Services Administration, is an important benchmark. It applies to federal government travelers as well as those traveling on government-contracted business, and often is adopted by contractors, state and local governments, universities and other research institutions, nonprofits and other organizations to help guide travel expenditure in areas throughout the United States.
Since the standard allowable lodging and meal per diem is set each year and is designed to keep pace with inflation as well as changes in hotel rates, it nearly always increases from prior-year levels. Given price hikes in 2024 and 2025 particularly among U.S. hotels, it stood to reason that another increase was in store for fiscal year 2026.
Nope.
GSA in August announced it would hold its standard lodging rate steady at $110 and its standard meals and incidentals allowance steady at $68 for fiscal year 2026, which began Oct. 1, 2025. It's the only time in at least the past 10 years, outside of the pandemic year of 2020, that GSA would hold both rates steady.
The move was notable in part because some of GSA's published criteria for determining the standard lodging rate seem to suggest an increase was in store: GSA on its website indicates that "typically, we use [average daily rate] data from the trailing April-March." According to data from hotel analytics firm STR, the monthly U.S. ADR increased year over year in each month from April 2024 to March 2025.
GSA in a statement didn't quite position the decision as strictly a function of hotel market analysis, although it suggested that "the steady per diem rates are made possible by the reduction from the historically high inflationary pressures seen during the previous administration."
GSA office of government-wide policy associate administrator Larry Allen, who headed the effort, said in a statement that "maintaining the FY 2026 per diem rates is a prudent step that reflects our commitment to responsible stewardship of taxpayer funds."
The hotel industry was less than enthusiastic about the move. "Government travel is a vital economic driver for the hotel industry and the broader travel economy," said Rosanna Maietta, president and CEO of the American Hotel & Lodging Association, said in a statement. "That's why it's so important for government per diem rates to keep pace with rising costs across the economy. The GSA's decision to keep per diem rates flat will place a strain on the hospitality industry as well as government travelers seeking lodging."
Allen's emphasis on factors outside of analysis of hotel rates, which in the U.S. generally have continued to rise even as occupancy has dropped, is notable for the remaining three years of the Trump administration. Should GSA prioritize holding the rate steady in future years, the effect on both buyers and hotels could be considerable.