# Presentation: 212715

## FY 2006 Per DiemsOctober, 2005 Lois Mandell, Per Diem Team LeaderPatrick McConnell, Acting Director

**Notes:**
Cover-No talking points

## Background

- 3 Federal agencies set per diem rates
- GSA: CONUS, DoD: US territories/possessions, State: foreign
- 3 Components: Lodging, Meals, Incidentals
- Non-Standard lodging rates set annually, Standard CONUS every 3 years
- Stakeholders:
- Top 3: Federal Travelers, Agencies & Taxpayers
- Others: OMB, GSA, FEBs, eTS, DTS, TMCs, CVBs, hoteliers, travel/lodging associations, meeting planners, Congress, etc.

**Notes:**
3 Federal agencies have authority to establish per diem rates
Non-Standard also called “Designated” locations
Conflicting interests between stakeholders
Current st. CONUS rate is $91, $60 for lodging & $31 for meals & incidental expenses (M&IE). Lodging portion raised from $55 to $60 based on CPI data for lodging costs away from home.
Focusing today on lodging portion of per diem

## FY06 Standard & NSA’s in CONUS

## Exceeding the Per Diem Rate

- FTR 301-11.300 to 11.306 Actual Expense
- Approval from agency before traveling
- Traveler can spend up to 300% of the current per diem rate for the area (amount can vary by agency)
- FTR 301-74 Conference Lodging Allowance (CLA)
- Spend up to 125% of lodging per diem rate in an area to attend or plan conference lodging

**Notes:**
Per Diem allows travel at that rate w/o prior approval.  Are provisions w/I FTR when must travel at higher rates.
Hotels not bound by per diem rates.  It is a business decision whether they can extend rates to customers.

## Key Process Steps

- Increase awareness of/and FEMA certification of lodging properties
- Update lodging properties database (~45K properties)
- Determine proposed NSA’s and run areas (uses requests, GIS, FEB,  historical knowledge and credit card information)
- Testing of new methodology, if applicable
- Contractor produces per diem reports w/ applied methodology including FEMA approved mid-range properties and seasonality evaluation
- Review/re-evaluate reports for NSA’s
- Develop proposed rates
- Determine cost impact for all NSA’s and Standard CONUS areas using Federal travel room nights
- Submit to OMB and GSA for approval
- Submit to Federal Register and publish on GSA website

**Notes:**
3. Geographical Information System (GIS)
If enhancing methodology, testing impact occurs.

## Methodology Used for Non-Standard Areas (NSA)

_**FY05**_
- ADR data: Jan-Dec ‘03
- Full Week
- FEMA Approved Properties (7,785) -midrange, upscale & upper upscale chains
- Seasons (+/- 15%)
- Ceilings and Floors (_+_ $50)
- Results in ADR used for per diems

_**FY06**_
- ADR data: April ‘04-March ‘05
- Business Week (M-Th)
- FEMA Approved Properties (11,785) -
- 	mid-price range
- Seasons: Review occupancy if ADR _+_10-14%
- Ceilings and Floors (_+_ $50)
- Results in ADR used for per diems

- Based on STR’s ADR reports using our methodology

**Notes:**
FY04 & earlier conducted telephone surveys which provided data that proved questionable
One recommendation of the Gov’twide Per Diem Advisory Board of July 2003, which was an Advisory board consisted of private and public sector travel industry experts, was to use industry data, specifically the Average Daily Rate.  The ADR is an industry metric which divides the Average Room Sales Revenue/# of Room Sold. 
We receive the Average Daily Rate or ADR from our contractor (Smith Travel Research) who is in the business of capturing and reporting this industry data for the hotel industry and their investors.  Smith Travel is the preeminent provider of this information in the travel industry.
FY05 used ADR as the basis for our rates.  Our data was based on lodging for the entire week and mid-range FEMA properties.  To minimize the impact of any locations having a substantial drop we instituted ceilings and floors at + $50.  
FY06 we refined the methodology.  Using more current data last 6 months in prior year and 6 months in current year; business week (M-TH) (another recommendation of the Per Diem Advisory Board), and expanded the properties in the mid-range that are used.  Formerly used 3 chain scales, FY06 use all in prior range.  
Due to our changed methodology we are using 50% more properties for FY06 (almost 12K vs. 8K) than FY05.  We feel this gives us a better average for these areas.
As the basis for our rates, we can legally only use properties approved by the Federal Emergency Management Agency (FEMA) as being fire safe and in compliance with the Hotel Motel Fire Safety Act of 1990

## Methodology Example

- One example of how this works.  Rates could increase or decrease rates depending upon market’s specifics

## Distribution of FY06 Lodging Rates

**Notes:**
This is a histogram showing the FY06 rate distribution
90% of the lodging rates fall between $61-130
The modes are $61-70 w/ 132 occurrences and a close second w/ 126 occurrences with lodging rates of $71-80
The lodging rates taper off greatly above the $130 amount

## Meals & Incidental Expenses

- Meals study conducted in FY05, changes effective FY06
- Reimbursement ranges increased to $39-$64 from $31-$51

## Future Plans

- Federal credit card data:
- Where feds are staying, frequency, actual expense
- Which areas to set rates on, sufficiency of existing rates/demand, non-standard areas
- Increase # of FEMA certified hotel
- Rate change in Standard CONUS
- FY06 evaluate to make Regional
- FY07 effective FY08

## Requests for Reviews

- Letter by _Federal Agency Travel Manager_, indicating why per diem rate is inadequate (§301-11.26):
- # trips annually by Feds
- Travel purpose
- Lodging properties w/i travel proximity & rates
- # actual expense used &/or another lodging facility
- Federal agencies supporting a rate change & their data
- Requests made by 2/28 for review w/i FY or to evaluate for new area in next FY
- Rate changes can result in increases or decreases

**Notes:**
Director, Travel Management Policy (MTT), General Services Administration, 1800 F Street, NW Room G-219 Washington, DC 20405. 
Not senator

## Q&A and Additional Resources

**Per Diem Team:**
- Cheryl McClain 202.208.4334
- Cy Greenidge 202.219.2349
- Lois Mandell 202.501.2825
- Travel & Transportation, Acting Director,
- 	Patrick McConnell 202.501.2362
- Email: www.gsa.gov/perdiemquestion
**Websites of Interest:**
- _www.gsa.gov/perdiem_
- FTR, FAQs, travel policy & e-notifications
- _http://www.FedRooms.com/_
- _www.feb.gov_
- _www.FEMA.gov_