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Why are international per diem rates generally significantly higher?

Why are international per diem rates generally significantly higher?

Old Jun 15, 19, 11:16 pm
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Why are international per diem rates generally significantly higher?

I'm traveling to London for a conference, and the per diem rate is $186/day. That seems absurdly high. The highest per diem I've received in the U.S. is $66/day. A lot of other international cities seem to also have very high per diem rates, but I don't recall food being that much more expensive outside of the U.S.
Why is it so high?
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Old Jun 16, 19, 3:15 am
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Originally Posted by dzdang View Post
I'm traveling to London for a conference, and the per diem rate is $186/day. That seems absurdly high. The highest per diem I've received in the U.S. is $66/day. A lot of other international cities seem to also have very high per diem rates, but I don't recall food being that much more expensive outside of the U.S.
Why is it so high?
Hi,

Does the per diem rate include accomodation? at some times of year the hotel prices will be very high in central london ( ie Wimbledon)
As in all major cities you can pay a lot for food at the top end restaurants but the majority are reasonably priced ( especially with the relatively low value of the GBP vs US $ so the US$ buys you more for your money)
Regards

TBS
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Old Jun 16, 19, 6:08 am
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Whether $166 is high or low depends on what you are expected to cover with it. If it excludes hotel, then it is a nice piece of change. If included, then it is low.

Per diems are not always higher overseas (from the US). They are set by the employer and, for whatever reason, it has found that this is an appropriate sum.
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Old Jun 16, 19, 9:11 am
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No the per diem rate I quoted does not include lodging. It is only for meals and incidental expenses. Also this is the government rate (my university reimburses people st the government rate. They donít have their own rates)
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Old Jun 16, 19, 11:40 am
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That may explain it. Many US employers simply use the US government per diem for overseas per diem. Unless you are somewhere safe Western food is hard to get and expensive, these tend to be quite high for what the average person needs. London, it goes without saying, is just fine. The $166 will feed you quite well.
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Old Jun 17, 19, 11:50 am
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Are you expected to network with clients, colleagues and peers at these international conferences?
A generous per diem can ensure that you are able to “keep up” with people who may only interact with reprentatives from your company occasionally and help ensure that you don’t come across as “cheap” or miserly when interacting with them. Often one can take on a sort of ambassadorial status when going abroad.
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Old Jun 17, 19, 5:50 pm
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I am reminded of a trip from NY to Geneva a few years ago. I flew from JFK to ZRH then took the train to Geneva. It was a Sunday morning and my room wasn't ready and I was hungry since I hadn't eaten since a small meal before arriving in Zurich. So I go over for the brunch at the hotel. It was about $90.

Then there is NRT.
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Old Jun 18, 19, 5:23 am
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Originally Posted by dzdang View Post
No the per diem rate I quoted does not include lodging. It is only for meals and incidental expenses. Also this is the government rate (my university reimburses people st the government rate. They donít have their own rates)
The GSA sets US government per diem rates (If I recall OCONUS is actually set by DoD), while international rates are set by Department of State. My employer uses these rates as well. I'm not sure for government employees what is covered under incidentals. I know for my employer there are differences in international and domestic. The organization setting the rate could account for some of the relative differences as well. But yes, I would generally agree that international M&IE rates are way better than domestic ones. Lodging rates also sometimes don't seem to correlate with any sort of reality but that's a different topic...

Last edited by thesun; Jun 18, 19 at 5:34 am
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Old Jun 18, 19, 5:35 am
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what s/he said

The assumptions used by the two agencies are different--to oversimplify it a bit, GSA assumes you're a civil servant going to meetings in an office with other civil servants so you just need some decent food. State assumes you're a diplomat potentially going to fancy dinners with your foreign counterparts and may need to spend a bit to pay your part of the bill. This leads to State's M&IE being significantly higher than GSA's even when the cost of restaurants in the foreign city is lower than that in a major US city. (See, e.g. M&IE rates for Mexico City or Berlin vs. NYC)

Incidentals is sort of a catch-all for stuff like toothpaste and razor blades domestically, and it's always $5/day. Overseas it also includes things like laundry and is higher.

The lodging rates can be interesting... sometimes they're just outdated, sometimes they're based on a huge metro area and sometimes they're just weird. DC's always makes me laugh--you often can't touch a hotel room in downtown DC at per diem, but if you're out on the fringe of the DC per diem area you can stay at the nicest hotel in town and feel good about saving Uncle Sam some cash because it's under per diem.

ETA: overseas lodging allowances also include all taxes and fees, whereas in the US the taxes are reimbursable separately.

Last edited by der_saeufer; Jun 18, 19 at 6:02 am
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Old Jun 18, 19, 5:57 am
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Does this include travel, because they'll take $30 off you on the Heathrow Express into the centre, and taxis won't be cheap?
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Old Jun 18, 19, 6:01 am
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Originally Posted by Smid View Post
Does this include travel, because they'll take $30 off you on the Heathrow Express into the centre, and taxis won't be cheap?
Nope. Those expenses are separate.
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Old Jun 18, 19, 6:15 am
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Originally Posted by dzdang View Post
I'm traveling to London for a conference, and the per diem rate is $186/day. That seems absurdly high. The highest per diem I've received in the U.S. is $66/day. A lot of other international cities seem to also have very high per diem rates, but I don't recall food being that much more expensive outside of the U.S.
Why is it so high?
London is expensive, at least in my experience living here and then visiting the US on trips, but that does seem like an amount that will allow you to have a very good time here. At today's rates that should be nearly £150.

Breakfast - for a coffee and a croissant in the chain coffee shop of your choice: probably £5-£6. Going up to £10 if you want a breakfast sandwich or granola instead of the croissant, and want to add some fruit and a bottle of water. If you want the full breakfast in your hotel (coffee, continental buffet and cooked options) budget £20 instead. Alternatively find a back street cafe (pronounced "caff" in this situation) and the full breakfast with toast and a drink will be well under £10. Or go to a grocery store and buy a yoghurt and a banana for £1.

Lunch - £10 for a sandwich/salad, crisps (chips) and a drink at somewhere like M&S or Pret. For those of us who work here this is the killer - you can bleed money buying sandwiches until you realise you really need to start making your own. A bit more if you want to sit down for a pizza or you want something more expensive like sushi.

So let's say you've spent £30 on breakfast, lunch and another coffee in the afternoon. Maybe you've done some laundry and bought a newspaper and so on, so perhaps you've spent £50. You now have £100 left and that's an excellent meal with alcohol anywhere here. It's pretty much only ruling out the very highest end Michelin starred places. For reference my own employer's dinner expense limit is £25, which is completely possible at "normal" restaurants, so on £100 for dinner you will be having fun!
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Old Jun 18, 19, 6:37 am
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Originally Posted by der_saeufer View Post
The assumptions used by the two agencies are different--to oversimplify it a bit, GSA assumes you're a civil servant going to meetings in an office with other civil servants so you just need some decent food. State assumes you're a diplomat potentially going to fancy dinners with your foreign counterparts and may need to spend a bit to pay your part of the bill. This leads to State's M&IE being significantly higher than GSA's even when the cost of restaurants in the foreign city is lower than that in a major US city. (See, e.g. M&IE rates for Mexico City or Berlin vs. NYC)

Incidentals is sort of a catch-all for stuff like toothpaste and razor blades domestically, and it's always $5/day. Overseas it also includes things like laundry and is higher.
This is the answer to the question. As to the methodology:

The M&IE portion is intended to substantially cover the cost of meals and incidental travel expenses such as laundry and dry cleaning. The maximum per diem rates for foreign countries are based on costs reported in the Hotel and Restaurant Survey (Form DS-2026) submitted by U.S. government posts in foreign areas. This report includes prices for hotel rooms and meals at facilities representative of moderately priced and suitable hotels and restaurants most frequently used by typical Federal travelers.
(Form DS-2026 if really interested https://aoprals.state.gov/Content/documents/DS-2026.pdf)


Further, the Department of State publishes a breakdown of suggested split by meal, plus incidentals, for all per diem levels, at https://aoprals.state.gov/content.as...114&menu_id=75 .
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Old Jun 18, 19, 7:07 am
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A small company I used to work for had a higher per diem for international to reflect the belief that when traveling abroad, the traveler is less familiar with where to get a good meal at a good price. Travelers provided feedback that they are at a disadvantage when trying to anticipate menu prices when abroad since they are unfamiliar with the restaurants. Just saying.
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Old Jun 18, 19, 8:02 pm
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The per diem is based on the assumption that you will be consuming all of your meals at the hotel. In my experience, breakfast buffets alone in major European cities cost 30-35 euros. Yes, you can probably run out to a bakery on the corner and get a croissant and coffee for 5, but that's not the model.
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