This phenomenon is seen in every small town dominated by a U.S. military base. Retail prices always go up the day that pay increases go into effect.
Yes. As a government civilian I attended a long course and stayed at a hotel. There were lots of hotels and my fellow classmates stayed at various ones. Almost all the hotels charged the government rate and competed on amenities (free breakfast, etc.). The government per diem (daily allotment for expenses) went up during the course. Rooms rates all went up to the new maximum the government was willing to pay.