While a company can set its own per diem rates, most follow the general guidelines set forth by the government. These are based on the cost of living across destinations.
Knowing the per diem rates in 2024 can help you anticipate travel expenses for the year ahead.
Looking at the Year Ahead
In general, you can expect your travel expenses to rise in 2024. According to research published by Business Travel News, Travel Managers expect travel budgets will be up more than 8% by 2024. This follows the trend of rising rates overall. In the first half of 2023, travel budgets had already increased more than 10%, year over year.
Across the board, Travel Managers are expecting to increase their budgets for air travel and food and beverage costs. The survey also found that Travel Managers are using cost-saving measures in anticipation of rising costs. Such as booking mid-tier hotels rather than upper-tier hotels.
This could be difficult for those Executives to calculate their per diem costs for the upcoming quarter, particularly following recent rises in per diem costs. (According to the Business Travel News 2023 Corporate Travel Index, some destinations in the United States saw their per diem rates climb significantly in recent years. Some U.S. destinations saw daily hotel rates increase by as much as 44% year over year (2021 to 2022). Some international destinations likewise saw daily hotel rates increase by nearly or more than 100%.)
U.S. Per Diem Rates in 2024
In August, the U.S. General Services Administration released its fiscal year 2024 per diem rates. These reflect the cost of living and associated per diem rates throughout the continental United States. The administration provides a handy search tool that allows you to search for per diem rates in the destinations your Travelers are most likely to go to in 2024. (Just be sure that you’re searching for per diem rates in 2024, not another year.)
Overall, according to a release from the administration, “For FY 2024, the maximum lodging allowance rates in some existing per diem localities will increase, and the standard [continental United States] lodging rate will increase from $98 to $107, resulting in 302 locations receiving a maximum lodging allowance higher than the standard rate. The meals and incidental expenses per diem tiers for FY 2024 are unchanged at $59-$79, with the standard M&IE rate unchanged at $59.”
However, that said, the administration’s rates aren’t as high as they have been in the past.
To compare rates in historically most expensive business travel destinations, just look at the rates from 2019. In 2019, the per diem rate in New York City was $385.08 for hotels, $48.92 for miscellaneous expenses and $115.04 for food. In San Francisco, the rates were $379.37 for hotels, $46,95 for miscellaneous expenses and $107.71 for food.
The administration’s per diem rates in 2024, in contrast, in New York City, include $315 for hotels (in the most expensive months) and $79 combined for meals and incidentals. In San Francisco, the administration’s per diem rates in 2024 are set at $333 for hotels in the city’s most expensive months and $79 combined for meals and incidentals.
The Business Travel News 2023 Corporate Travel Index, however, gives a slightly more generous estimate. Its average per diem rates for 2023 in New York City were $449.83 for nightly hotel rates and $125.15 for daily meal costs. Likewise, the Index sets San Francisco’s average rates at $300.11 for nightly hotel rates and $115.14 for daily meal costs.
Looking more broadly at the Index, for 2023, Business Travel News found the top, most expensive (based on average per diems) U.S. cities for business travel included New York City, San Francisco, Boston, Honolulu and Washington, D.C.
Global Per Diem Rates in 2024
The U.S. Department of State’s Office of Allowances likewise provides details on foreign per diem rates. There’s also a search feature that you can use to calculate per diem rates in 2024 for your business Travelers headed abroad.
However, to get a quick idea of international per diem rates, we can again look at the Business Travel News 2023 Corporate Travel Index. While in 2019, the highest international per diems were found in Tokyo, Zurich, London, Basel and Geneva, in 2023, those spots switched up slightly. The top five spots went to Zurich, Milan, Paris, London and Tel Aviv. Daily costs topped out at $553 in Zurich.
How to Use Per Diem Rates to Your Advantage
If you do not use per diem rates for your business travel, it might be time to start. Compared to itemized expense reports, per diem rates enforce a certain level of responsibility when your team travels. Business Travelers are limited as to how much they can spend and are encouraged to be more cost-conscious. Additionally, if you process expenses for business travel on your own rather than turning that task over to a Travel Manager. Per diem rates can also benefit you as an Executive. The flat rate makes reimbursements quick and easy.
Once you’ve decided to use per diem rates for your business travel, you can further increase their benefit. Choose to send business Travelers to destinations with more affordable per diem rates. You won’t always have this option, particularly when traveling to visit with clients or to attend conferences. However, you do have this option when it comes to things like hosting your own event or a company retreat.
Need Help Managing Your Business Travel Spend?
More or less overwhelmed with the task of managing your organization’s business travel spend? It might be time to think about working with a Travel Management Company. They can help you track and manage business travel spend and budgets. Then, you’ll be able to see a greater ROI for every trip.