Aug. 15, 2012--The federal government announced Tuesday that it will freeze but not reduce the rates it pays for employees to travel on official business.

The lodging industry celebrated the decision to freeze the "per diem" rate, saying efforts earlier this year to fend off a possible reduction in the rate were successful. At the same time, the government said a freeze in the rates will help keep federal travel costs in line.

The U.S. General Services Administration, which sets the per diem rates for lodging, meals and incidentals, said keeping those rates steady for fiscal year 2013 will save the federal government an estimated $20 million during the year.

"By keeping per diem rates at current levels, we are supporting federal agencies in controlling costs and ensuring that taxpayer dollars are used wisely," said Dan Tangherlini, the GSA's acting administrator.

In Orlando, the rate the government will reimburse employees for hotel stays is $111 a night from January through May, a period that includes some of the city's highest priced convention months. The rate falls to $97 a night from June through December.

Rumors of steep reductions in rates began to filter through the industry earlier this year, after the White House ordered federal agencies to rein in travel costs. Lobbyists for the travel industry said if the GSA changed the way it calculated the rates, it could result in cuts of more than 30 percent in some markets.

Hoteliers responded by saying they might not be able to accommodate government business if the prescribed price were cut, and the travel industry said a reduction would price federal workers out of the market, making them unable to secure lodging in cities where they had business.

When the GSA announced its plans to hold rates steady Tuesday, the American Hotel & Lodging Association, which has lobbied against the government cost-cutting measures, declared success against what it characterized as an arbitrary proposal to "slash rates."

"While certainly not ideal, the rate freeze is a far less radical approach than the crippling move that GSA had contemplated," the group said in an email.

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