New federal per diem rates for work travel took effect Oct. 1, 2026, and some cities stretch them a long way. In Aurora, Colorado, 96% of hotel rates shown in Engine searches fit under the new lodging cap. In Arlington, Texas, the cap covers a 4-star hotel.

Per diem is the daily amount the federal government allows for lodging, meals and incidental expenses on work travel. Lodging is repaid at cost up to a nightly cap, and meals and incidentals are a flat daily amount. The U.S. General Services Administration's (GSA) table covers the 48 contiguous states and Washington, D.C., and many companies use it for their own employees.

Engine, a business travel platform, analyzed every hotel rate shown in its searches for check-ins from October 2025 through September 2026 and compared each one with the new lodging cap for that hotel's county and month.

This analysis looks only at lodging, the nightly per diem cap for a hotel room. The standard lodging cap rose from $110 to $113 a night, and 295 destinations have a higher cap of their own.. New York and Boston have the two highest caps of the 89 cities in the analysis, $291 and $284 a night on average. As you’d expect, both rank near the bottom in terms of how many hotel rates fit under the cap. Across the year, 38% of rates fit in New York and 44% in Boston. Chicago, with a $202 cap, fits 38%. Dallas gets $184 and fits 72%, enough to cover 3.5-star hotels.

Below, find out where the new per diem rates go furthest and where they fall short.

Where does the lodging per diem go furthest?

Six of the top 10 cities share a cap with a larger neighbor. Aurora gets the same $203 cap as Denver, and 96% of Aurora’s hotel rates fit under it, compared with 67% in Denver. Irving, Texas, gets Dallas’s $184 cap and fits 85% of rates. A traveler who can stay a few miles out gets a better hotel for the same per diem amount.

Engine

Where does the lodging per diem fall shortest?

In Boston, 94% of 2-star rates fit under the cap, but only 53% of 3-star rates do. Chicago is similar, with 83% of 2-star rates and 51% of 3-star rates under its cap. New York has the highest cap in the country and fits 38% of its rates. “None” means no hotel class fits under the cap often enough to count.

Engine

Which months does the cap fall furthest behind?

In 47 of the 89 cities, the typical hotel rate in at least one month was higher than that month’s cap. These four cities had the widest gap.

Engine

The same cities cover most rates in the off-season. In January, Boston’s cap is $213, the typical rate is $144, and 78% of rates fit under it. Chicago fits about three-quarters of its rates in November and January.

Why doesn’t a bigger per diem buy a better hotel?

GSA sets each cap at 5% below the average rate at mid-range hotels in the area, using data from the previous April through March. Upscale and luxury hotels are left out of that average, so in a city full of them, the cap covers the cheaper end of the market.

The cap also changes by month in 149 destinations. New York’s runs from $189 in January and February to $358 from September through December. Boston’s runs from $213 to $365.

Is the $113 standard rate enough?

Fourteen of the 89 cities have no GSA rate of their own and get the $113 standard rate. In all 14, the cap covers a 2.5-star hotel at most. Frisco, Texas, a Dallas suburb, fits only 32% of its hotel rates under $113, while Dallas itself gets $184. Jacksonville and Richmond fit about half of their hotel rates.

What are the options when hotel rates exceed the cap?

If hotel rates exceed the cap, check the month first. In New York and Boston, the cap swings by more than $150 a night across the year, so the same trip can fit under it in one month and not the next. Then check the suburbs, since a town a few miles out often shares the big city’s cap with cheaper hotels. In most of the 89 cities, the cap covers 2.5-star or 3-star hotels, so that is the class to search. Federal travelers can be reimbursed for actual expenses up to 300% of the per diem rate with agency approval. Company policies vary.

How the analysis worked

Engine used GSA’s FY2027 lodging rates by county and month, effective Oct. 1, 2026. Counties with no named destination use the $113 standard rate. The hotel data includes every rate shown in Engine searches for check-ins from October 2025 through September 2026 from the platform’s 2 million users across 40,000 businesses. Rates include fees paid at the hotel and exclude taxes, because GSA counts mandatory fees against the cap. A typical rate is the median rate shown in searches for that city and check-in month, compared with the FY2027 cap for the same month. Hotel rates are from the past year; the caps are the ones in effect now.

A hotel class counts as covered when at least 70% of its rates came in under the cap, and every lower class did too. “None” means no class qualified. In Pittsburgh, 2-star rates fell just short at 69.9% while 2.5-star rates cleared the mark. Detroit had too few rates below 3.5 stars to judge those classes. Buffalo had too few 2-star rates, and its 2.5-star rates missed the mark.

The analysis started with the 100 largest U.S. cities by Census Bureau estimates. It excluded Anchorage and Honolulu, which use separate federal tables. A city includes hotels with that city in their address, so Irving and Frisco count separately from Dallas.

This story was produced by Engine and reviewed and distributed by Stacker.