Hotels in Jefferson County soon will have a good reason to court military members and government workers staying here on business, as per-diem reimbursement rates the feds offer for rooms will be raised from $77 to $99 in October.
Set by the General Services Administration, the per-diem rates were increased to make it more affordable for hoteliers to take in guests with ties to Fort Drum, said Gary S. DeYoung, executive director of the 1000 Islands International Tourism Council. Hoteliers, who have an option to participate in the program by accepting lower room rates, had a hard time swallowing the $77 rate but now are lauding the federal agency’s decision. In addition to the lodging rate increase, reimbursements for meals and incidental expenses will go up for employees in Jefferson County, from $46 to $56.
“It’s going to be a nice bump in income at hotels,” Mr. DeYoung said. “It’s really important because there are now many more rooms in the market (with new hotels), and this will make them a bit more profitable. Government business is very important to hotels here, but they were caught between a rock and a hard place because they wanted a discount that wasn’t quite so severe.”
Tourism advocates such as Mr. DeYoung have been pushing for years for a higher per-diem rate for hotels. Even though occupancy rates are boosted by military employees, offering the low rates sometimes isn’t financially beneficial for hotels. This year Smith Travel Research conducted a survey in Jefferson County for the government that concluded there’s enough traffic among federal workers here to justify the per-diem increase, which will put more cash in hotels’ coffers.
“We have enough federal business in our district because of Fort Drum, and those federal employees have to find rooms that are in the middle end of the market,” Mr. DeYoung said.
Since 2006, a total of 670 rooms have been pumped into the market as eight hotels have been opened in the greater Watertown area to meet demand at Fort Drum, according to a study by the 1000 Islands International Tourism Council.
As a hot spot for government travelers, Jefferson County will be named a “non-standard area” by the federal agency in 2013. It will join a list of 12 other regions in New York state that have higher non-standard rates, including Niagara Falls and Lake Placid. The increase will take effect in October because it’s the start of the federal agency’s fiscal year.
The Holiday Inn Express, 1290 Arsenal St., has participated in the program, but it sometimes has rejected government employees at peak times when booked with patrons paying higher rates, general manager Charlotte H. Waterson said. She said the long-awaited per-diem increase was needed by all of the hotels in the region to make lodging government workers worth it.
Depending on occupancy levels, “I would only allow a certain number of rooms at the $77,” she said. “Charging that much is like going back to another era, especially for a hotel that includes continental breakfast.”
Mrs. Waterson said that with the $22 increase, however, the hotel should be able to take in most military employees during the year. But if all of its rooms are booked, it still could turn some workers away during its peak season from mid-June to Labor Day.
The hotel charges $129 per room most of the year, but rates climb to between $149 and $189 during peak season.
Some middle-end hotels adopt a conservative policy by offering per-diem rates only when they have vacant rooms, while others always offer them. But thanks to the forthcoming rate increase, Mrs. Waterson said, all hotels likely will accept the rates for most of the year.
“Now the people who come to the area as government workers will have more of a choice, instead of being limited to the few hotels that would take them all,” she said. “Once our room quota was up, they used to have to go to other hotels.”
The Ramada Inn is one of the few middle-end hotels along Arsenal Street that’s never sent government employees away, said Charles W. Palmatier, that hotel’s general manager. While that policy hasn’t always made sense from a financial perspective, he said, the hotel always has welcomed military members as a matter of principle.
“In certain (peak) months of the year it was a little more of a strain, but we would always honor that because we find it a service to the military families,” he said, lauding the government’s decision to put Jefferson County on the map. “The 99-dollar rate is extremely competitive and comparable to the lower rates we offer.”
Roughly 60 percent of the hotel’s patrons are employees who have some connection to the military, Mr. Palmatier said, although not all of them receive per-diem rates for traveling on business. In turn, he expects to see better results when he checks the hotel’s bottom line at the end of the year.
“It’s going to put us where we need to be,” he said.