NATIONWIDE — U.S. Senator Tim Kaine (D-Va.) is cosponsoring legislation that would freeze daily allowances permitted for federal employees on government travel at pre-pandemic levels for the next two years.
The bipartisan bill, which is also cosponsored by Kansas Republican Sen. Jerry Moran, aims to help get the American hotel industry back on track after being rocked by the COVID-19 pandemic for more than a year.
Per diem rates are set by the General Services Administration (GSA) and are the maximum allowances federal employees can be reimbursed for expenses incurred during official travel. GSA per diem rates are updated annually and are calculated on a 12-month basis beginning in April of the prior calendar year and running through March.
The American Hotel & Lodging Association (AHLA) is in full support of the bill.
“Government travel supports tens of thousands of hotel jobs and billions in travel spending across the country and is critical to the hotel industry’s recovery, which is still suffering the negative economic impacts of COVID-19,” said Chip Rogers, AHLA president. “As a result of pandemic-related shutdowns, capacity restrictions and safety precautions, calculating per diem rates using 2020 data would lead to an artificially low rate that would only exacerbate the economic crisis facing hoteliers.”
According to a study released by Old Dominion University’s Dragas Center for Economic Analysis and Policy, the Virginia hotel industry saw its revenue fall 31 percent from May of 2019 through to 2020.
“The travel industry was among the hardest-hit by the pandemic, and we must help this critical part of our economy and workforce recover from economic hardship,” Kaine said. “I’m proud to introduce this legislation, which will help ensure that federal employees receive a fair rate when they travel and that hotels receive fair compensation for their services.”
Despite the grim statistics from 2019 to 2020, the local hotel industry is starting to see a sharp rebound. According to the Dragas Center, hotel revenues for May 2021 were up over May 2020 by more than 150 percent in every major metropolitan area in Virginia.
As a whole, Hampton Roads saw a 79 percent increase in rooms sold. Williamsburg has lead the resurgence, both in rooms sold and revenue, finishing May with a gain 349 percent and 845 percent respectively.
Despite the recent growth, it should be noted that the hotel industry revenue across the Commonwealth still has a long way to go. Statewide, Virginia is 31 percent below its May 2019 numbers. However, revenues within Hampton Roads are up four percent.