The General Services Administration, which sets allowable daily spending limits for federal employees and contractors traveling on government business, has decided to freeze 2013 per diems at 2012 levels as part of a larger effort to rein in federal travel spending.

The GSA's per diems are revised annually to reflect hotel and meal prices in various travel destinations. Earlier this year, the Office of Management and Budget sent out a memo to all federal agencies, ordering them to cut their travel spending by 30 percent in fiscal 2013. While the per diem freeze won't reduce spending, it will at least keep it from rising as much as it might have if the rates were revised upward.

In fact, the U.S. hotel industry is breathing a sigh of relief over the GSA decision, since the agency had apparently been considering a new method for calculating allowable per diems that could have caused big problems for federal travelers.

The traditional method used by GSA involved calculating per diem rates based on the average rate of mid-priced hotel rooms, using data from four tiers of the mid-price range in a given market, but none from economy or luxury properties, according to the American Hotel & Lodging Association, a trade group.

"In late June of this year, AH&LA learned that GSA was prepared to radically change that methodology by removing the data of an entire tier of mid-priced hotels in calculating the average, excluding most hotels in many large cities," the association said. "If the change were made, it would result in an artificially low 'average' rate that would not reflect actual room rates. Although it would vary by market, some estimates indicated that per diem rates would be slashed by 30 percent."

That could have meant that federal workers traveling on business "would be priced out of the market and unable to secure lodging where they had business," AH&LA said. Thus they would have to book hotels farther away and spend more on rental cars or taxis, increasing their actual trip costs.

"While certainly not ideal, the rate freeze is a far less radical approach than the crippling move that GSA had contemplated," AH&LA said.

GSA per diem rates can be found here: www.gsa.gov.