On Friday, the U.S. General Services Administration released the fiscal year 2026 continental United States per diem expense rates, effective Oct. 1, 2025, through Sept. 30, 2026. Federal agencies use these rates to reimburse their employees for lodging and meals and incidental expenses incurred while on official travel.
For the fiscal year, the GSA will keep the FY 2026 per diem reimbursement rates at the same level as FY 2025 with the lodging rate at $110, the standard meals and incidental expenses rate at $68, and the M&IE rate tiers for 296 non-standard areas between $68-$92.
According to a statement from the GSA, the rate has been left unchanged “to uphold the Administration’s cost-efficiency goals.” The last time the GSA declined to increase the per diem rate was in 2021 as travel began to recover from the worst of the COVID-19 pandemic.
“Maintaining the FY 2026 per diem rates is a prudent step that reflects our commitment to responsible stewardship of taxpayer funds,” Larry Allen, office of government-wide policy associate administrator, said in the statement. “GSA’s decision ensures cost-effective travel reimbursement while supporting the mission-critical mobility of the federal workforce.”
AHLA Responds
The American Hotel & Lodging Administration issued its own statement about the rates, arguing that rising costs justify an increase but also acknowledging the need to preserve government per diem rates at least at current levels in the context of a “sharp reduction” in government travel.
“Government travel is a vital economic driver for the hotel industry and the broader travel economy,” AHLA President & CEO Rosanna Maietta said. “That’s why it’s so important for government per diem rates to keep pace with rising costs across the economy. The GSA’s decision to keep per diem rates flat will place a strain on the hospitality industry as well as government travelers seeking lodging. A strong economy requires a thriving hospitality sector. We will continue to advocate with the GSA and members of Congress for per diem rates that reflect hotels’ rising costs of doing business.”
In a letter to members, Maietta noted that corporate America “often looks to the federal per diem rates when setting their own travel reimbursement policies,” which makes it “important that government per diem rates keep pace with rising costs.”
Government Travel & Revenue Guidance
At the end of the first quarter of the year, several U.S.-based hotel companies lowered their guidance for full-year growth in revenue per available room and noted government travel as a contributing factor for the decision. In May, Marriott International CFO Leeny Oberg noted "continued reduced government nights" as a factor in lowering the company's guidance 50 basis points “due to a more cautious outlook” in the region. Demand in the U.S. softened in March, she said, “primarily due to a 10 percent year-over-year decline in U.S. government RevPAR.” Last year, the U.S. government segment contributed around 4 percent of the region’s room nights.
By the second quarter's earnings call with investors, Marriott International President and CEO Anthony Capuano reported that RevPAR for select-service and extended-stay hotels in the U.S. and Canada declined around 1.5 percent year over year in the quarter and credited the drop to “a decline in government demand as two-thirds of government revenues are in the select-service segment, as well as weaker demand from smaller-business customers across chain scales.” Oberg said that business-transient RevPAR was down 1 percent, while government-transient RevPAR was down 17 percent in the quarter.
Choice Hotels International, meanwhile, reported a 2.9 percent year-over-year decline in domestic RevPAR for the second quarter of the year, which CFO Scott Oaksmith credited to “reduced government and international travel as well as softer leisure-transient demand due to the broader economic uncertainty” during the call with investors. And during Hilton’s Q2 earnings call, President, CEO & Director Christopher Nassetta credited “government spending declines, weaker international inbound business and broader economic uncertainty” for the company’s 2 percent decline in business transient RevPAR.
At the recent 17th Annual Hotel Data Conference in Nashville, CoStar and Tourism Economics downgraded growth projections in a revised 2025-26 U.S. hotel forecast, and STR President Amanda Hite told Hotel Management that apart from the luxury and upper-upscale segments of the chain scale, “it could be a street-corner fight for shifting of demand share."