Per Diem Rates Updated: May 2019
Today’s most successful corporations are constantly sending their people on the road. Business Travel is essential to serving customers and growing the business, but it’s also a serious expense that needs to be managed. Hence, the need for per diem rates.
One way to reduce travel costs where possible is to understand where the most expensive cities to visit are located. Understanding the per diem rates in different locations can help you better plan events, all-hands meetings, retreats, business meetings and other important gatherings.
Here’s a look at the cost of doing business per day in top cities here in the United States and around the world.
Per Diem Rates in the United States
If you were asked to guess the most expensive travel rates in cities in the United States, there’s a good chance you could name the top 5. These are major cities that have a reputation as expensive places to live and to do business. Here they are as provided by Business Travel News:
Top 5 U.S. Per Diems
|1. New York City||$385.08||$48.92||$115.04||$549.04||5%|
|2. San Francisco||$379.37||$46.95||$107.71||$534.03||-2.4%|
|4. Washington, D.C.||$320.41||$43.45||$98.51||$462.37||12.5%|
What’s more interesting is to look at cities that are getting either more or less expensive than they were to visit the previous year. Chicago and Washington, D.C. jumped up dramatically in per diem from 2016 to 2017 — as did Jackson, MS, increasing 11.9% in 2017.
The list of cities decreasing in per diem from 2016 to 2017 is filled with regionally important metro areas — but ones that are unlikely to be significant centers of commerce for large corporations. Little Rock, AR dropped 9. 3%, Wichita, KS Dropped 7.1% and Rochester, NY is down 5.6% in 2017.
For comparison’s sake, the average per diem across the largest 100 cities in the United States was $321.97 — a 1% increase over 2016.
Per Diem Rates in International Cities
Doing business internationally is a little more complicated given that exchange rates play such an important role. A war, a terrorist attack or even a significant policy shift (like the United Kingdom exiting the European Union) can have a dramatic impact on the currency values and, hence, the cost of doing business there.
You might be a little more surprised by the list of most expensive foreign per diem rates. They include the following (also provided by Business Travel News):
Top 5 International Per Diems
As you can see, Switzerland dominates the top 5 with 3 cities that cost well over $400 a day — Zurich, Basel and Geneva. Tokyo checks in at No. 1 and growing with an increase of 7.9% over 2016. London remains in the top 5 at $468.63 a day, but it fell a staggering 15.3% between 2016 and 2017 — again, most likely because of exchange rates and issues related to the nation’s planned exit from the European Union.
The largest increases in per diem came in the South American cities of Buenos Aires, Argentina (31.3%) and Lima, Peru (17.1%), as well as the Osaka-Kobe area of Japan (20.1) — which is less than a 4-hour train ride from list-leader Tokyo.
London wasn’t the only international city to see its per diem tumble in 2017. Your corporation may be unlikely to send Travelers to Muscat, Oman (24.8% decrease), Lagos, Nigeria (18.9%) or cities experiencing strife like Cairo, Egypt (18.6%) and Istanbul, Turkey (17.2%). But important international business centers also saw severe declines in per diem, including cities like Rome (15.5%) and Dubai (15.9%) — in addition to London’s steep fall.
The average per diem among top 100 international cities in 2017 is $292.57 — a 6.3% decrease from 2016.
In 2019, companies are operating under new guidance for per diem rates. These new per diem rates issued by the IRS went into effect on Oct. 1, 2018, and they will remain in effect until Sept. 30 2019. The rates are created using a “high-low substantiation method,” which simply means that some localities are considered “high-cost” while all other localities are considered “low-cost.”
High-cost localities include the same cities listed as most expensive above, including New York City and San Francisco. But they also include some seasonal destinations that might not seem as obvious. For example, Napa, CA is considered a high-cost locality only from May through October.
Every penny counts, of course, when you’re seeking return for your investment in business travel. If you’re looking for destinations for meetings or retreats, consider choosing low-cost localities where you will spend less per traveler. Also, if you need to do business in an area that is subject to seasonal changes in per diem rates, consider going during low seasons when you can save money.
Where to Find Per Diem Rates
Where you can find these new per diem rates? The U.S. government is perhaps the best source for per diem calculator options. Government per diem rates are set in the Continental United States by the General Services Administration, in Alaska, Hawaii, Guam and other territories by the Department of Defense, and in international cities by the Department of State.
Check out the GSA’s per diem calculator for an in-depth look at the travel per diem in different domestic cities at different times of year.
How to Take Advantage of Per Diem Rates
What should these numbers mean to you? If you’re interested in maximizing your Business Travel budget, consider holding your all-hands meeting in Santa Barbara (a 3.3% decline year over year) rather than Chicago. If you do business internationally, now is the best time in recent memory to hold an event or visit significant clients in London, Rome and Dubai.
At JTB USA Business Travel, we offer clients a common sense approach to Business Travel. We provide tools, approaches and expert guidance that can help you make the best possible travel decisions and that can help you make the most of your investment in flights, hotels, rental cars, meals and more.
Contact us today about saving money and getting the most out of your Business Travel.