Per Diem

» Posted by on Apr 17, 2014 in Hotels | 0 comments

My first class in CGTP history about the Global Distribution Systems was of great interest to me. I plan meetings for government agencies and have some knowledge of the per diem but didn’t know the full history of it.

I was aware that the General Services Administration (GSA) established the per diem rates for destinations within the Continental United States (CONUS) but found out so much thru my studies on how it all was developed into the programs we have currently. Our Meeting Planning department is working with a government group in Bethel Alaska where the per Diem is currently $135.00. The Bed and Breakfast was originally offering breakfast but with the rising cost of food, and fuel, they can no longer offer this at the per diem.  When the gas barges arrived the rate of gas had increased to $4.90 per gallon. The price increase is then passed on to the population by increasing prices for all items that have to be transported in. The price of a gallon of milk today is approximately $8.00 and will continue to rise due to the cost of fuel.  Other areas that are affected is electricity, water and sewage, these rates have increased by 10%.     I’ve discovered during my research on the GSA per diem site that a study is conducted on these cites every 3-5 years.

One of the most recent studies was completed in 2005, regarding the meal allowance.

Research was done by surveying and accurately reflecting the meals pricing that are charged by restaurants in the areas that were frequently visited by the Federal travelers.

Because Bethel, AK is under the Department of Defense (DOD) the manager is aware that a Travel Manager would need to submit a letter stating that the present per diem is in adequate.  With prices for oil rising, all other locations which received there supplies by air or freighted will be experiencing the same types of hardships. The DOD and GSA may need to conduct their studies on rates and per diems every 1-2 years instead of 3-5 years in order to keep up the inflation. Unfortunately the Alaskan locations may not qualify special consideration for the increase in the per diem.   The justification from a Travel Manager may not be enough.  In these locations, Bethel, Kotzebue and Kodiak Alaska, they may not have the volume necessary to warrant studies on the increase.This was a great review to learn more on how the per diem is setup and monitored.   It  will allow me to help educate my clients and help them understand why some properties can’t honor the per diem in certain areas.

By Carolyn Amacker

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