by Cheryl-Anne Sturken | November 01, 2003

The 2004 federal per diem lodging rates, which went into effect Oct. 1, generated a range of reactions among industry professionals in cities where rates increased or decreased dramatically.
   Of the 95 areas tracked by the Washington, D.C.-based General Services Administration, the government arm that sets travel policy, 15 saw lodging rates go up while eight had theirs cut, some by as much as 30 percent.
   Bill Rivers, deputy of the office of transportation and personal property for the GSA, said the agency drew on several sources, including Hendersonville, Tenn.-based Smith Travel Research, the Consumer Price Index and the Department of Labor, to set the new rates.
   San Jose and Redwood City, both in California, suffered the largest decreases. San Jose’s per diem rates tumbled from $150 per night to $106, and Redwood City’s dropped from $134 to $102.
   “The cities for which you see a decline in rate reflect what is happening in the marketplace itself,” said Rivers.
   Cyril Isnard, general manager of the 731-room Fairmont San Jose, called the reduced rate drastic and unfair. “Our labor costs do not decrease. We still have to pay our employees and suppliers,” he said.
In Sacramento, Calif., the room rate jumped by $14, to $93. The hike was long overdue, according to Donna Carey, statewide travel program administrator for the Department of General Services in Sacramento and president of the Alexandria, Va.-based Society of Government Meeting Professionals.
   “Rate affects perception, and when you have a very low rate, the perception is that the city might not be as attractive to visit,” said Carey.
   These rates are intended for transient travelers, noted the GSA’s Rivers. To secure group bookings, government meeting planners have the flexibility to pay up to 25 percent above the per diem rate, if necessary. “It is completely up to the planner and the hotel,” Rivers said.