Bipartisan legislation introduced by U.S. Reps. Bill Posey (R-Fla.) and Charlie Crist (D-Fla.) would require the General Services Administration to set a floor for fiscal year 2022 and 2023 federal per diem rates at those established for fiscal year 2020, which began on Oct. 1. The Restored, Equitable, Coronavirus Adjusted Lodging Act would avoid cuts to per diem rates due to the impact of COVID-19 on the lodging and travel industries. The rates limit what federal government employees can spend on travel and lodging each day.
Last year Posey and Crist introduced this legislation and worked with the GSA to set and lock in federal lodging reimbursement rates for 2020 based on 2019 data. The new legislation would require the GSA continue to freeze future federal per diem rates at the 2020 level established in 2019 before the pandemic, rather than letting these rates reflect a pandemic-depressed market. Past economic crises show it can take years for the hotel and travel industry to recover to previous levels.
“Tourism is critical to Florida’s economy,” Crist said in a statement. “Because of COVID’s heavy impact on travel, it makes no sense to base hotel per diem rates on 2020 numbers, which was obviously an outlier for the industry. I’m proud to work with Congressman Posey on this bipartisan bill to support Florida’s hotel workers and owners to keep the Sunshine State the premiere travel destination for business, pleasure and government travel.”
“Coronavirus-related travel restrictions and shutdowns have had a crippling effect on our whole economy, especially the hospitality and tourism industry which is essential to Florida and many other travel destinations around the country,” Posey said. “Setting per diem rates at the 2020 level is one important way that the federal government can help struggling businesses and their employees recover faster and I thank Congressman Crist for working with me to reintroduce this legislation.”
Industry associations expressed their support for the measure.
“We applaud Reps. Posey and Crist for recognizing that COVID-19 continues to have a devastating impact on government travel and hotel occupancy, and working to ensure future government per diem rates reflect the current crisis,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association. “Government travel is incredibly important to the hotel industry, supporting tens of thousands of jobs and billions in travel spending that benefits communities across the country. At a time when our industry is fighting for survival, it is critical that GSA establish reasonable rates for FY22 and FY23 that reflect the timely business conditions for hotels and travelers. We urge Congress to swiftly pass this legislation.”
“America’s hoteliers applaud Congressmen Crist and Posey for calling upon the GSA to stabilize future per diem rates by locking them in at FY 2020 levels,” said AAHOA President and CEO Cecil P. Staton. “Future rates are calculated on a trailing 12-month basis from April to March. The COVID-19 pandemic and associated stay-home orders, shutdowns and social distancing measures caused the average daily rate at hotels to plummet. Using the depressed industry figures from the past year as the basis for future per diem rates would hinder our government officials’ ability to travel in service to the American people and cut a crucial source of revenue for hotels and other small businesses. At a minimum, the current FY 2020 per diem rates should be the floor for rates in FYs 2023 and 2024.
“The hospitality industry is facing its biggest recovery effort since the 2008 financial crisis. Industry experts expect leisure travel to rebound before business travel with a recovery lasting well-into 2024. Some experts are forecasting that business travel will only recover to about 80 percent of pre-pandemic levels. It is imperative that the GSA move quickly to stabilize per diem rates.”