U.S. hotels welcome higher federal per diem rates

THE U.S. HOTEL industry is set to benefit from the General Services Administration’s recent decision to raise per diem rates for fiscal year 2025. This
is the first increase in the meals and incidental expenses allowance in three years, a change welcomed by AAHOA and the American Hotel and Lodging Association.

Each year, GSA sets per diem rates to reimburse federal employees’ lodging and meals expenses for official travel within the continental U.S., typically based on
the ADR for lodging and meals over a trailing 12-month period, minus five percent. Starting Oct. 1, the standard daily lodging allowance for most of the
continental U.S. will increase by $3 to $110, while the meals and incidental expenses allowance will rise by $9 to $68.

“With government travel being a significant contributor to hotel revenue, it’s crucial that federal per diem rates align with the economic pressures hotels
face today, including persistent inflation and widespread labor shortages,” said Miraj Patel, AAHOA’s chairman.