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Policy and Per Diems for Travel of 30 days and longer

Policy and Per Diems for Travel of 30 days and longer. Schedule 48 Long-Term Lodging Vendor Council September 2011. Today’s objectives. Clearly define 30 day+ housing Review “industry” inventory and pricing Compare to hotel lodging options

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Policy and Per Diems for Travel of 30 days and longer

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  1. Policy and Per Diems for Travel of 30 days and longer Schedule 48 Long-Term Lodging Vendor Council September 2011

  2. Today’s objectives • Clearly define 30 day+ housing • Review “industry” inventory and pricing • Compare to hotel lodging options • Consider impact of Per Diem and discretionary 30 day+ policies • On your travelers • On your budget

  3. Long-Term Lodging Defined • Lodging for 30 continuous days or longer • Travel usually related to TDY or PCS • Typically means a furnished apartment or condo • If contracted, NAICS 531110 used most often • GSA Schedule 48, SIN 653-9 • Travel Services Solutions • 26 approved vendors (as of 29 Aug 2011) • $51.3M in total sales since 2007 inception

  4. Corporate Housing Temporary Housing Long-Term Lodging Extended Stay 30+ Lodging TDY TCS TAD PCS Temp Quarters Alternative Names for 30+ travel Within our industry, vendors have found “Temporary Housing” is used more often as the key word search by government travelers than the “corporate housing” term.

  5. 2011 Highland Report

  6. Corporate Housing Industry Statistics Measurements20102009 • Industry Revenue $2.5B $2.36B • Guests in housing every day 65,000 62,000 • Average length of stay: 83 nights 92 nights • Industry Average Daily Rate (ADR) per night: $116 $115 from 2010 and 2009 CHPA Reports

  7. Average Daily Rate By Apartment Type CHPA Industry Report 2010 for U.S. (The Highland Group) One Bedroom - $112 Two Bedroom - $120

  8. Industry Inventory • Predominantly “virtual” inventory • Vendors rent apartments in residential communities on both long-term and as-needed basis • Vendors furnish apartments, provide housewares and services, connect utilities, facilitate all service and billing • Offers greatest flexibility – of location, of furnishings, etc. • Some dedicated buildings – “fixed inventory” • typically a mix of furnished and unfurnished apartments • capacity to change ratio of furnished to unfurnished

  9. 2011 Highland Report

  10. Industry Inventory and Rates • “Available” inventory shrinks or expands based on supply and demand • Apartment rent is biggest cost factor • Current demand is driving rental costs up • have increased 5 - 11% nationwide since 2009 • Per diem does not consider rental costs

  11. Supply Change-2011 Highland Report

  12. U.S. Corporate Housing Average Rates – 2011 Highland Report 2007 ~ $ 115.97 2008 ~ $ 117.35 2009 ~ $ 114.35 2010 ~ $ 115.88

  13. APARTMENT: Multiple rooms, like home Residential community Full Kitchen Washer/Dryer in apt. Housekeeping options Enhanced privacy Self-sufficiency HOTEL: Usually a single room Transient Population Microwave, Mini-fridge Shared laundry facility Daily Housekeeping Entry Additional cost potential (parking, internet, etc.) Furnished Apartment or Hotel?

  14. APARTMENT Selection of locations based on client needs Can select properties that are current and fresh Space for family to visit or stay HOTEL Fixed location Black-out dates Infrastructure may be dated or obsolete No additional space in room for family – or additional cost Furnished Apartment or Hotel?

  15. Choosing Corporate Housing …WIIFY - What’s In It For You? • Utilizing the GSA Schedule: • Faster and more simplified procurement • Pre-qualified vendors • Negotiated, discounted rates • Cost savings – travel and administration • Reporting / Spend Analysis • Flexibility and transparency • Option to buy direct via individuals, groups or contracts

  16. Choosing Corporate Housing …WIIFTT - What’s In It For The Traveler? • More location options – • Quality • Shorter Commutes • Quality of Amenities • Full size kitchen and appliances • Larger Fitness Centers • In-unit Washer and Dryer • Personal privacy and security • Maintenance of morale & well-being

  17. Per Diem Dilemmas • Per Diem rates are based on mid-priced hotels’ average rates less 5% • Apartment costs rising – not part of per diem calculation • Discretionary authority further restricting 30+ lodging spend to “XX% of per diem” or sliding scales • How are these percentages determined? • Costs do not go down proportionately to enacted restrictions • GSA Schedule Rates must be “most preferred rate” • No volume or compliance requirements as in commercial sector

  18. Per Diem Dilemmas, continued • $112 average 1BR daily rate nationwide • Versus flat PCS daily rate at $77 nationwide • Significantly reduced rates may force traveler: • into inconvenient location compared to workplace • into inferior lodging options • Above factors takes a toll on productivity • performance level, work quality and satisfaction • adds cost, stress, and time for commute

  19. Travel Policy Recommendations There is methodology and science behind the per diem process. It is created by the Federal Government for use by federal personnel. It further impacts private sector for defense contractors. Please support and use systems in place.

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