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Alert: FY'16 Per Diem Rates Announced; VA Sees Increases, But Not All Destinations Are A Bright Spot

Friday, August 14, 2015  
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Earlier today (August 14, 2015), the General Services Administration’s (GSA) announced its Per Diem Rates for FY 2016, effective October 1, 2015.

“While Virginia as a whole will see a positive increase in government travel spending due to a $6.00 increase (from $83 to $89) in the Standard CONUS Rate, some Virginia Non-Standard Area Destinations will not benefit as strongly from the changes,” said Eric Terry, President of the Virginia Hospitality & Travel Association.

Helpful Definitions
CONUS: Standard Rate for lower 48 Continental United States
NSAs: Non-Standard Areas for which a higher Per Diem Rate is established.

Three Virginia localities have been moved from NSAs to the CONUS Rate; two of which are prominent feeder markets for Washington, DC and the third of which is home to the world’s largest naval base. These localities are:

  • Fredericksburg
  • Norfolk/Portsmouth
  • Prince William/Manassas

The average Rate increase over FY 2015, for the 14 Virginia localities maintaining NSA status for FY 2016, is a meager 3.3%, or $3.47.

The Standard CONUS increase aside, perhaps the lone bright spot in the announcement is that two Virginia NSAs (Richmond and Wallops Island [Accomack County])—as well as the counties immediately outside of DC between July and August—will see an increase at or above the CONUS Rate for FY 2016.

“All things considered, the FY 2016 GSA Per Diem Rates are largely positive for the Virginia Hotel & Lodging Industry,” said Eric Terry, President of the Virginia Hospitality & Travel Association. “In what may be the most confusing change, however, is that Loudoun County will only receive a $1 increase over FY 2015. Looking at the Year-to-Date ADR figures that seemingly drive these Per Diem Rates for Northern Virginia, which includes Loudoun County, Fredericksburg, and Prince William/Manassas, have been outpacing the national growth.

“While the CONUS Rate increase [$6.00 over FY 2015] will help the industry as a whole, Loudoun, and to an extent Fredericksburg and PCW/Manassas, did not get an increase in line with what we expected.”

In a notable change in policy, the standard continental United States (CONUS) rate will now be reviewed every year, as opposed to the previous policy under which it was reviewed every three years. Non-Standard Areas (NSAs), which have a higher per diem rate, will continue to be reviewed every year, as is the current policy.

The below chart outlines the changes from FY 2015 to FY 2016.

FY 2016 Per Diem Rates - Effective October 1, 2015   (Click To View PDF)

Chart: FY 2016 Per Diem Rates - Effective October 1, 2015

 

If you have any additional questions about today's announcements or the rates in general, please contact Eric Terry at ericvhta.org or 804.288.3065.

 


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