I'm starting with the man in the mirror.
I'm asking him to change his ways.
And no message could have been any clearer:
If you wanna make the world a better place, take a look at yourself and then make a change.
These lyrics from one of my favorite Michael Jackson songs seem especially pertinent this morning. Judging by what I heard last week and what I’ve read on the HotelNewsNow.com message board, there’s some anger out there over the widespread drop in government per diem rates for the hotel sector.
That ire is misplaced. Instead of getting mad at the United States General Services Administration, hoteliers should be getting mad at themselves for slashing the rates from which the GSA sets per diems.
In a voice-mail message to me last week, a GSA spokeswoman referenced the agency’s website in response to questions about how the per diem rate is set. On its site, the GSA states a handful of metrics are used to set the rate, including average daily rate.
The agency noted the severe falloff in ADR during the downturn as being one factor behind this coming fiscal year’s decline. The GSA drew from ADRs set between Monday and Thursday for the time period stretching from April 2009 to March 2010, a period of declining rates for the industry.
During that time frame, ADR dropped 7.3% to US$96.94, according to STR data. A return call for further comment from the GSA was not returned by deadline Tuesday.
Sure, it’s too bad the GSA’s calculation of per diem doesn’t take into account the recovery shown in the hotel sector during the past few months. Occupancy, revenue per available room and ADR all have shown increases lately. But keep in mind that when heading into a downturn, the use of historical data can help hoteliers, too.
In short, maybe if hoteliers had heeded the words of Michael Jackson and taken a look at themselves in the mirror several months ago and not continued to cut rates, they wouldn’t be quite so peeved today.
