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 Consider impact of Per Diem and

discretionary 30 day+ policies On your travelers On your budget

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

Alternative Names for 30+ travel

Corporate Housing

Temporary Housing

Long-Term Lodging Extended Stay 30+

Lodging

TDY

TCS

TAD

PCS

Temp Quarters

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.

2011 Highland Report

Corporate Housing Industry Statistics

Measurements 2010 2009 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

Average Daily Rate By Apartment Type

CHPA Industry Report 2010 for U.S.(The Highland Group)

One Bedroom - $112

Two Bedroom - $120

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

2011 Highland Report

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

Supply Change-2011 Highland Report

U.S. Corporate Housing Average Rates – 2011 Highland Report

2007 ~ $ 115.97

2008 ~ $ 117.35

2009 ~ $ 114.35

2010 ~ $ 115.88

Furnished Apartment or Hotel?

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?

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

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

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

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

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

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.