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
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
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
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,”
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.