The U.S. General Services Administration has backed off its controversial plan to change federal per diem rates in FY2013, a big victory for hoteliers and the meeting and events industry.
The GSA had planned to change how it calculates per diems for government travel, in effect limiting where federal employees could meet, how often and where. Critics said the move would effectively price federal workers out of midrange markets, making them unable to find lodging where they needed to do business.
After protests from the Center for Association Leadership and the American Lodging & Hotel Association, among others, GSA decided to freeze per diem rates at the FY2012 level. Critics said the plan would have increased federal spending, made federal travel less efficient, and damaged the lodging industry and its employees.
Damage has already been done, however, with more than 35 meetings and conferences — worth an estimated $1 million — canceled since mid-April, including the National Travel Forum for government travel planners that has annually drawn more than 1,000 attendees. Also gone: The 2012 GovEnergy Conference on Aug. 19-22 at America’s Center in downtown St. Louis. That cancellation leaves 10 hoteliers with nearly 2,500 rooms to fill and city officials estimating a loss of $6 million in direct spending.
The GSA was scrutinized and investigated in April following the release of video from a 2010 Las Vegas conference that cost more than $800,000. The spending led to congressional hearings and resignations. It also led to the proposed federal guidelines the GSA has now withdrawn.