Factors that Influence the changes to Lodging Rates

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» Posted by on May 18, 2014 in Hotels | 0 comments

Starting in 2005 the lodging per diem rates have been based on the average daily rate (ADR) data, which is a measure based upon a property’s room rental revenue divided by the number of rooms rented as reported by the hotel property to the contractor.  GSA reviews each specific property to make sure they meet their criteria for geography, fire safe certification, and various property’s demography combined with their ADR to help determine market rates.  This calculation provides GSA with the average rate that rooms rent in a given area.  The goal is to find properties that have the best mid-range hotels in the market.

For fluctuations, GSA has created seasonal rate periods in many markets where there is a sustained period (two or more months in length) where rates (ADR) are different from the preceding or following period by at least 15%.  Three years’ worth of data is used to determine seasons.

Due to ongoing changes in the market, GSA reviews the per diem rates continually to determine if changes and updates are needed.  Impact of forces of nature and economic times can determine the requirement for immediate action for inadequate rates in certain locations.

Once GSA has applied the changes to per diem rates they are published on the Internet at http://www.gsa.gov/perdiem as FTR Bulletins.  The Bulletin indicates the revisions prescribed by the Office of Government wide Policy for the continental United States.  Notices are published periodically in the Federal Register constitute as notification of revisions in CONUS per diem rates to agencies.

By:  Debra Hardman

“The views expressed are those of the author and do not necessarily reflect the position of the Bureau of the Government or my Agency.”

 

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