This discussion is confusing in that AFAIK the word local here does not mean local government workers, such as city and county employees, but rather it's a matter of a distinction between the state rate only applying for employees of the state in which the hotel is located versus rates for employees of any state in the USA.

There typically are government rates for employees of any government anywhere (including foreign, state, local, federal, military, etc.) versus federal rates, state rates, state and local rates, etc.