Industry Partners Newsletter - Federal Policy and Issues

Federal Policy and Issues

GSA Per Diem Rate
Roger Dow (US Travel) issued a response to the cut in the lodging per diem rate following the GSA scandal.  Following are excerpts from the letter:
Dear Travel Colleague:

Following the General Services Administration (GSA) conference scandal, the federal government is continuing to pursue policies that could reduce federal travel budgets, alter private sector spending and harm the travel industry.  U.S. Travel recently learned that GSA is considering several revisions to its methodology for calculating its annual lodging per diem rate.  One proposal under serious consideration would reduce per diem rates in major travel markets by upwards of 30 percent.  This could have significant and long-lasting economic impacts on government and private sector business travel, and harm the nation's tentative economic recovery. 

U.S. Travel is deeply engaged and partnering with our colleagues at the American Hotel and Lodging Association (AH&LA) to address this matter.  By mobilizing 50,000 targeted grassroots leaders and an array of advocacy resources, we are working with leaders on Capitol Hill and within the Administration to stop any policies that could negatively impact travel.    

Each year, GSA adjusts the lodging per diem rates in 400 separate markets in the U.S. by using Smith Travel Research (STR) data for mid-price hotels.  GSA calculates the lodging per diem for each market by using the average daily rates of independent, midscale, upscale and upper upscale properties over a one year period (from April to March of the previous two years).  By eliminating "upper upscale hotel rates" from the data used to calculate the lodging per diem, the government would reduce the maximum amount it is willing to reimburse federal employees for lodging.

This could have wide-ranging impacts on business travel across the nation.  While responses to the GSA scandal focused on federal meetings and conferences, lowering the lodging per diem rate would impact both government group and transient travel.  Furthermore, because private sector companies and government contractors routinely base their reimbursement rates on the government per diem, revenue from private sector business travel could also be impacted over the next year. 

U.S. Travel Action
• U.S. Travel quickly activated its grassroots army of travel employees by issuing an alert asking them to contact their local GSA administrator and urge that the current per diem methodology remain unchanged.
• U.S. Travel and AH&LA are scheduling meetings with GSA officials to explain the potentially harmful economic impacts of changing the per diem rate calculation and offer sensible policy alternatives.  U.S. Travel is also engaging officials at the Office of Management and Budget (OMB) and the White House to ask that they prevent any harmful proposals from moving forward.
• U.S. Travel is building a third-party advocacy coalition of nontraditional allies, including defense contractors and government vendors that would also be impacted by a change to the GSA per diem rates.
• U.S. Travel is developing an aggressive communications strategy, backed by sound research, to put this issue front and center with the mainstream media.
• Lastly, U.S. Travel is engaging travel champions on Capitol Hill to ensure they are aware of these potential changes to the per diem rate and to craft an appropriate response. 

We will keep you updated on the impact this issue has on the Nevada travel industry. 

Surface Transportation Bill
On July 29, 2012, congress passed a package reauthorizing the Surface Transportation Act for two years, through the 2014 fiscal year ending October 1, 2014, as well as measures to extend flood insurance and lower federal student loan rates, sending the bill to the President for signature.  Tourism and recreation interests fared better than expected with some modest successes, but were shut-out of several issues.  Following is an overview:

National Scenic Byways Program.  The good news is that the Scenic Byways Program is not eliminated completely as the House Highway Bill would have done.  The less than good news is that, although the program is continued, it is not given dedicated funding, but instead must compete for State DOT dollars in every State with other programs.

Enhancements and Recreational Trails.  Spending will be reduced substantially for Transportation Enhancements. They are combined with Safe Routes to School and the Recreational Trails Program into a new Transportation Alternatives Program and provided $760 million per year, compared with a total of $1.2 billion at present. The programs will now have to complete with each other and with other programs for the $760 million.  The Cardin-Cochran Amendment supported by the Western States Tourism Policy Council (WSTPC) was retained in the final bill but with the indicated substantially reduced funding.

The bill would protect the Recreational Trails Program by guaranteeing $85 million per year. However, the bill would allow states to opt out of spending half of that amount. Program supporters are already working to prevent states from opting out.

Begich Amendment. This amendment that would have included "travel and tourism" as a factor to be considered in State DOT and local Metropolitan Planning Organization transportation plans. This was not retained in the final bill. The legislation refers instead to the need for those transportation plans to consider their effect on "travel mobility."

We will keep you updated on how this will impact us in Nevada and any other subsequent federal legislation regarding this bill.