Originally published by Abha Bhattarai on The Washington Post
The federal government adjusted its allowances for employee travel and conferences last week, sending area hotels scrambling to make adjustments before the new per diems take effect Oct. 1.
The most marked change, hotel managers say, is the elimination of a clause that currently allows employees to spend an extra 25 percent for conferences.
Beginning next month, government employees will be allowed to spend up to $219 per night at District hotels in October. That is down from the year before, when nightly rates were capped at $226 for general travel and $282.50 for conferences.
In Frederick County, that per-diem rate will fall to $100 from $118.75 for conferences; and in Loudoun County, to $105 from $135.
"We've already suffered pretty severely from the cutbacks in government travel," said Katie Doherty, general manager of the National Conference Center in Leesburg. "This is one more hit."
As a result, the conference center is reworking its budget and adjusting government-friendly packages to reflect the new prices.
"We'll look at each piece of business individually and see if it fits our budget," Doherty said. "The big thing is that we want to do whatever it takes to get the government to begin holding conferences and training [sessions] again."
Hotel managers throughout the region said they were parsing the new numbers and trying to figure out exactly how their bottom line would be affected.
"Right now, it's hard to tell how it will affect us," said Sheldon Johnson, general manager of the Sheraton Silver Spring Hotel. "We don't know just yet -- not until we look at our budget more closely."
The adjusted rates -- which are 5 percent lower than the average daily rates in any given market -- are expected to save $10 million for the federal government.
"From a travel industry perspective, we want to provide the federal government the best value they can get," said Erik Hansen of the U.S. Travel Association. "But in some cases, the new per diems make it more difficult [for hotels]."
Some hotel managers in downtown Washington said it is becoming cost-prohibitive to keep lowering prices to meet GSA caps. Instead, they are focusing on trade shows, private sector conferences and tourists to make up for lost government business.
"I'm not necessarily going to say I'm going to give up on [government business]," said John Rish, general manager of the Hilton Garden Inn in downtown Washington. "But there is enough demand in downtown D.C. that we don't necessarily have to chase after government per-diem business."
