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GSA will freeze US per-diem rates into 2013
August 14 2012

The GSA has curbed earlier plans to re-evaluate its methodology of calculating U.S. federal per-diem rates, which many hoteliers feared would cripple business.

By Jason Q. Freed
HNN contributor

REPORT FROM THE U.S.—After initial discussions about reducing federal per-diem rates by as much as 30% prompted an outcry from several hotel industry representatives, the U.S. General Services Administration on Tuesday said it will freeze per-diem rates for fiscal year 2013 at the current 2012 levels.

The standard federal per-diem rate, which applies to approximately 2,600 markets, will be $77 for at least another year. Non-standard rates, which apply to approximately 400 of the country’s top markets, will remain the same as they were this year across the board.

“Today we are announcing we are freezing the 2013 rates to the 2012 levels,” GSA spokeswoman Chris Scott said on a conference call Tuesday. “This freeze helps us at the GSA to meet the Obama administration’s directive to reduce travel costs government wide. Freezing the per-diem is one of several parts of an ongoing top-to-bottom review to ensure we are closely evaluating federal travel spending.”

The GSA last month approached hoteliers with an early plan of re-evaluating its methodology to calculate federal per-diem rates. The GSA was looking at a number of potential options that would result in per-diem decreases in most markets, and many hoteliers feared dramatic per-diem decreases would cripple business and come with a bevy of unintended consequences.

The American Hotel & Lodging Association and the U.S. Travel Association, among other parties, got involved by lobbying the GSA with their concerns and providing data and materials that opposed dramatic reductions to per-diem rates.

“While certainly not ideal, the rate freeze is a far less radical approach than the crippling move that GSA had contemplated,” the AH&LA said in a statement Tuesday. “AH&LA appreciates the consideration GSA gave to our concerns and looks forward to working with them to ensure per-diem rates reflect the market and are good value to the federal government.”

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