Fed hurdle threatens summer conference biz | SummitDaily.com

Fed hurdle threatens summer conference biz

summit daily news

SUMMIT COUNTY ” Local resorts and conference centers have large federal, military and state-run agency groups in their sights to boost business during the slower summer and shoulder seasons.

But a drastic adjustment to the county’s “per diem” rating by the federal government late last year isn’t doing local bookers any favors.

On Oct. 1, the General Services Administration (GSA) in Washington, D.C., surprised local tourism industry professionals by slashing the per diem rating for Summit County lodging between the months of April and September. The per diem number established by the GSA is crucial, as it is the maximum amount federal employees can spend on lodging per night while traveling on business.

Seemingly out of the blue, the GSA cut Summit County’s per diem number for those shoulder season months by 27 percent ” from $127 to $89. A review after much noise about the change resulted in bumping the number up a couple of dollars to $91, which is where it stands now.

“We’ll have to look at turning business away,” said Bruce Horii, director of sales and marketing for Beaver Run in Breckenridge. “If you can get $130 versus $90, it doesn’t make any sense to take (the cheaper federal business). It will restrict the type of business that we can approach or be approached by.”

When asked if he’s worried about the potential impact to summer business at Beaver Run, Horii said, “Very much so.”

David Sudduth, the associate director of conference sales at the Keystone Resort and Conference Center, echoed those concerns.

“We’ve just been put in a position where we can’t accept, or we turn down, group business that requires the per diem,” he said. “We’ve had inquiries from groups that we’ve wanted to attract to Keystone, and now we have to turn them away because the rates are too low.”

GSA’s sudden adjustment has tourist businesses perplexed. When announced, the GSA changed just two regional per diem rates in Colorado: a 33 percent drop in Colorado Springs, and the Summit County drop for the April to September months.

After a thumbnail investigation by Sen. Wayne Allard’s office, spurred by the Summit County Chamber of Commerce and the Colorado Tourism Office, people are still asking the questions, “Why Summit County, and why so much?”

The GSA officially laid out their criteria for establishing per diem rates in a December letter by determining an Average Daily Rate based on room and revenue data collected from “mid-price range” hotels across the county, excluding weekend rates.

But 27 percent in one year? And Summit County in particular?

“Their formula doesn’t add up,” Horii said. “We’re all going up … and trying to go higher,” he said, referencing the rates at Beaver Run. Horii estimated his summer rack rate at $155, but negotiated rates for a large conference group would be well below that number. But they certainly would be well above the $91 per diem rate, Horii said.

“If (the GSA) said the average rate dropped 10 percent because of inventory ” I can appreciate a 10 percent drop. No way is it 27 percent,” he said.

The GSA’s Patrick McConnell, who has been the agency’s contact with the Colorado groups, did not return multiple phone calls seeking comment or clarification.

“I really haven’t heard a good answer about how they establish their rates,” Sudduth said.

Evania Archuleta, a caseworker for Allard, confirmed that the senator’s office initiated an inquiry into the changes. But when asked whether the investigation is finished, Archuleta said, “It pretty much is.”

The immediate impact that the change will have on summer bookings isn’t known. But the concern about whether conferences for governmental and federal groups will shy away from Summit County because of the new limitation is very real.

“What we had been talking about is trying to get the word out to places like Fort Carson or federal agencies in Denver that this is a great place to have a conference,” said Kathleen Kennedy, operator of the Woods Inn in Frisco and executive director of the Frisco Chamber of Commerce. Frisco has been working hard lately to capitalize on a newly energized connection to Copper Mountain Resort, whose conference facilities and amenities are ideal for drawing summer conference business from the federal sector.

“It’s an area we’re anxious to get into,” Kennedy said.

Duffy Hayes can be reached at (970) 668-3998, ext. 13611, or at dhayes@summitdaily.com

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