The hotel industry is celebrating a recent announcement by the General Services Administration (GSA) regarding a hike in per diem rates for federal employees. Effective October 1, 2024, the daily lodging allowance for most regions within the continental United States will rise by $3, reaching $110 per day. This increase is anticipated to bring in an additional $100 million in revenue for the hotel industry.
Furthermore, the meals and incidental expenses allowance will see a $9 increase, reaching $68 per day. This marks the first adjustment to this category in three years. The American Hotel & Lodging Association (AHLA) has been a strong advocate for fair per diem rates, and this increase is seen as a major victory for their efforts.
Kevin Carey, the Interim President and CEO of AHLA, expressed his appreciation for the GSA’s decision. He highlighted the importance of government travel as a revenue source for hotels and emphasized the need for per diem rates to reflect current market realities, including the impact of inflation and workforce shortages.
Each year, the GSA establishes per diem rates to ensure federal employees are fairly reimbursed for lodging and meal expenses incurred during official travel. The GSA determines these rates using a formula based on the average daily rate (ADR) for lodging and meals over a 12-month period. The GSA then subtracts five percent from this figure to establish rates that are both fiscally responsible and reflect current market conditions.
For fiscal year 2025, the standard per diem rate for most regions within the continental U.S. has been set at $178. This figure includes a $110 allowance for lodging and a $68 allowance for meals and incidental costs. This increase in per diem rates not only benefits the hotel industry but also ensures that federal employees are adequately reimbursed for their travel expenses, facilitating smooth and efficient government operations.
