Federal Lodging Per Diem Reduction in Walworth County
September 4, 2014
Dear Walworth County WH&LA Member:
As we reported in our August 15 WH&LA Capitol Insider, the changes in the Federal Lodging Per Diem rate for federal employees traveling on business in the Lake Geneva/Walworth County area starting October 1 of this year included a removal of your area's "Non-Standard Area (NSA)" status designation. This means that instead of the current federal employee reimbursable rate of $93 from October through May and the much higher rate of $129 for June through September, your area, effective October 1, only is allowed the general Continental U.S. ("CONUS") rate of $83 for federal employees traveling there on business.
Also as mentioned in that advisory, we have been looking into what options are available to try to revert to your former NSA status. The primary method to challenge a change in rates, such as this, is for a Federal Travel Manager to submit an official request to the GSA noting their challenges with finding a place to stay in an area using their Per Diem rate. In other words, if such a Manager were to contact one or more properties in the area to book rooms for federal employees and be advised that they are not willing to accept the new lower rate, and this Manager were to then contact GSA officials to seek an increase in the Per Diem for lodging. Unfortunately, the GSA only allows this twice each year, with the first deadline of Dec. 31, meaning the Manager would have to experience this lack of availability between Oct. 1 (when the rate changes) and December (in time for remitting a written request by Dec. 31), which is a very short window and not during prime season, making this option a tough challenge.
After reviewing Walworth County ADR history for the last year, we found that it was documented to increase over 5%, which should not warrant the removal of NSA status. However, just to complicate matters, the GSA only takes into consideration the following:
- Lodging properties federally certified as "Fire-Safe" (only approximately 20 separately listed that we could find in Walworth County)
- No condos, cabins, or B&Bs are included
- Only properties considered in a Mid-Price Range are included (not Economy or Luxury)
- Only Monday through Thursday rates count (no weekend rates)
- After the above data is collected, they take 5% off for a group volume discount
The above combination is not information collected or reported to a city or county, but is reported to the GSA through a special contract.
What does all of this mean? WH&LA will be coordinating with AH&LA, which has a meeting scheduled with GSA officials later this month, to explore if a non-Travel Manager (WH&LA or AH&LA) could request a re-evaluation of the data in a situation such as this that appears to go against the data.
We have also been in communication with Darien Schaffer from the Lake Geneva CVB, a WH&LA member CVB on this concern, and Kathy Seeburg from the Walworth County tourism agency, as they naturally are concerned with anything impacting tourism in the area.
Our effort in collaboration with AH&LA is a non-traditional approach to change, and one that could still take time, therefore in the meantime, any property that decides on their own to not accept the new rate should be very clear to the federal employee contacting them why they have so chosen this.
Important Note: I would strongly suggest that innkeepers in your area/county not in any way discuss or come to any collaborative conclusions relating to rate acceptance, due to potential liability pertaining to the Federal Anti-Trust Act governing implications of rate-setting among competitors.
We will let you know of any developments, should we learn of any in the coming weeks. As always, we appreciate your support and membership in the Wisconsin Hotel & Lodging Association.
Trisha A. Pugal, CAE| President, CEO | Wisconsin Hotel & Lodging Association | 1025 South Moorland Road - Suite 200, Brookfield, WI 53005 l www.WisconsinLodging.org | 262.782.2851