CRIST, POSEY CALL FOR STABILIZATION OF GSA RATES TO HELP PROTECT FLORIDA ECONOMY
Washington, DC,
May 28, 2020
St. Petersburg, FL – U.S. Representatives Charlie Crist (D-FL) and Bill Posey (R-FL) sent a letter to the General Services Administration (GSA) calling for future hotel per diem rates to be set at Fiscal Year (FY) 2020 levels to avoid severe cuts in FY 2021 and beyond due to the coronavirus’ impact on travel and tourism. GSA hotel per diem rates cover lodging for federal employees and personnel who must travel for government purposes. The GSA rates are calculated using average daily hotel and lodging rates from the prior year. Unfortunately, the industry has been severely impacted by the COIVD-19 pandemic, causing rates to plummet. Should GSA use rates from this year to calculate future per diem, Florida’s hotel and lodging industry would experience prolonged suffering, hindering the State’s overall economic recovery. Congressman Crist and Posey are urging GSA to set an extended floor for per diem rates through at least FY 2022 to mitigate the disastrous impacts of this crisis on the hotel sector and safeguard Florida’s travel industry. “Tourism is the heart of Florida’s economy,” said Rep. Crist. “It makes sense for GSA to set a per diem rate that does not take into account the near term impact of the coronavirus, but rather takes a longer view. I’m proud to work with Congressman Posey on a bipartisan basis to support Florida’s hotels to help ensure the Sunshine State will continue to be the premiere travel destination, whether for business, pleasure, or government travel.” “The coronavirus has had a crippling effect on many sectors of our economy like the hospitality and tourism industries which are essential to us here in Florida and many other travel destinations around the country,” said Rep. Posey. “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 Rep. Crist for working together on this effort to support Florida jobs and businesses.” A pdf of the letter to GSA can be found here, with text appearing below. May 27, 2020 The Honorable Emily W. Murphy Dear Administrator Murphy, We write today to express our concern about the negative impacts the COVID-19 pandemic will have on the hotel and lodging industry, particularly impacts to the federal per diem rates for future Fiscal Years (FY). As members who represent a state that is highly reliant on the travel and tourism industry - and its recovery - we urge the General Service Administration (GSA) to lock in future federal per diem rates at FY 2020 levels. Due to stay-at home orders, mandatory shutdowns, and social distancing measures, the average daily rate (ADR) collected this year will produce significantly depressed per diem rates, negatively impacting the hotel and travel industry’s long-term recovery.[1] As you know, GSA Per Diem is calculated on a trailing 12 months basis from April of the prior calendar year through March of the current calendar year, which is why setting an extended floor is necessary to prevent lingering COVID-19 impacts from drastically lowering the per diem in future years. To allow the hotel industry to make a full recovery, the floor should be in place through at least FY 2026. However, at a minimum, GSA should set the floor at current FY 2020 per diem rates for FYs 2021 and 2022. As a comparison, following the 9/11 terrorist attack, it took roughly three years for hotel room rates to return to the same level as before the attack. Following the 2008 financial crisis, hotel rates did not rebound for almost six years.[2] Meanwhile, COVID-19 related hotel rate declines are significantly outpacing those seen in prior downturns. In April alone, in the state of Florida, hotel room rates were down 50% and occupancy was down more than 70% (see Attachment A). It is vital that a floor for GSA Per Diem rates be set for an extended period of time to mitigate the disastrous impacts of this crisis on the hotel industry. We appreciate your attention to this matter and look forward to your response. Sincerely, Charlie Crist Bill Posey |
