The reimbursement rate for government travel will not change in the next fiscal year, the General Services Administration announced Tuesday, quelling hotel industry concerns that the rates would be cut to reduce federal travel spending.
The decision follows an aggressive lobbying campaign by the hospitality industry, which met with GSA leaders, lawmakers on Capitol Hill and White House officials to plead against a lower rate.
“We used the resources at our disposal to help GSA make a responsible decision on how to preserve federal travel but safeguard tax dollars,” said Erik Hansen, director of domestic policy at the U.S. Travel Association.
The GSA, which sets rates for lodging, meals and other travel expenses for federal agencies, considered reducing the average lodging rate of $77 a night by as much as 30 percent as part of an effort to comply the Office of Management and Budget’s order to slash travel spending in fiscal 2013 by the same amount.
The belt-tightening was ordered after a conference scandal involving the GSA’s Public Buildings Service, which spent $823,000 in 2010 on a four-day Las Vegas junket that featured a mind-reader and after-hours parties in pricey loft suites.
GSA officials said they concluded that cutting per diem rates would actually cost the government more: Employees attending conferences or out-of-town meetings would stay at cheaper hotels outside city centers and need to rent cars to get around, jacking up their travel bills, said Mafara Hobson, an agency spokeswoman.
“By keeping per diem rates at current levels, we are supporting federal agencies in controlling costs and ensuring that taxpayer dollars are used wisely,” acting GSA Administrator Dan Tangherlini said in a statement. The statement said freezing the rate would save $20 million in travel costs the government would have incurred had per diems increased.
The GSA considered several options as it evaluated reimbursement rates for the fiscal year that starts in October, officials said. One would have changed the methodology the agency uses to calculate average daily lodging rates in major metropolitan markets, removing more costly hotels from the annual sample.
Hotel officials warned GSA leaders that lower rates would ultimately result in higher travel costs.
Shawn McBurney, senior vice president of governmental affairs at the American Hotel Lodging Association, said the GSA was told “that if they [lowered the rate], most hotels in a city wouldn’t have been considered.” Hotels are not required to accept the government rate.
The government’s standard lodging rate of $77 covers hotels in 2,600 counties; the standard per diem meal rate is $46. But rates for lodging and meals vary widely in big cities frequently visited by federal workers, based on the average room price for mid-priced hotels and restaurants.