Of all the potential consequences from the General Services Administration's (GSA) conference scandal
earlier this year, perhaps the most feared was a cut in federal per diem rates — the maximum daily allowance given to government employees for lodging, meals and incidental expenses when they're traveling on business. Today, however, the travel industry is celebrating, as the GSA yesterday announced it would not reduce per diems, but rather freeze them at the FY2012 level. Feared cuts have therefore been avoided — for now.
"Standing shoulder-to-shoulder in defending the value of government travel, our industry successfully avoided a potentially devastating policy change when the U.S. General Services Administration announced it would not alter its method for calculating lodging per diems, which could have cost the industry $885 million in revenue and thousands of American jobs," said U.S. Travel Association President and CEO Roger Dow in an email to travel industry stakeholders.
In June it was reported that the GSA — the agency in charge of government property and procurement — was considering changes to the methodology it uses to calculate per diems as part of a government-wide effort to comply with a May memorandum from the Office of Management and Budget. A direct result of the GSA's own spending scandal, that memo directed federal agencies to spend at least 30 percent less on travel than they did in fiscal 2010 for the next three fiscal years.
In response, the travel industry mobilized. "Thanks to the joint advocacy efforts of travel industry associations, local hotel owners, national lodging chains, destination marketing organizations and many others, we were able to defend against a policy proposal that would have cut federal lodging per diem rates by roughly 30 percent," Dow continued. "The GSA was considering this drastic change as part of a government-wide initiative to reduce federal conference and travel spending. Instead, the GSA decided to freeze lodging per diem rates at current levels for the upcoming fiscal year. This decision was reached because so many industry leaders sent a clear message that travel is an essential tool for the government and critical to local economies."
Along with the U.S. Travel Association, the American Hotel & Lodging Association (AH&LA) and the U.S. Chamber of Commerce, among others, generated dozens of letters from leaders on Capitol Hill and met repeatedly with members of the Obama Administration. State travel associations and destination marketing organizations, meanwhile, hosted roundtables with government officials to discuss the importance of federal travel.
"In the end," Dow said, "our message was heard loud and clear."