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BUSINESS TRAVEL SPENDING HITS ALL-TIME HIGH, ACCORDING TO THE AMERICAN EXPRESS 1992-1993 SURVEY OF BUSINESS TRAVEL MANAGEMENT

 BUSINESS TRAVEL SPENDING HITS ALL-TIME HIGH, ACCORDING TO THE
 AMERICAN EXPRESS 1992-1993 SURVEY OF BUSINESS TRAVEL MANAGEMENT
 NEW YORK, Oct. 13 /PRNewswire/ -- U.S. companies are continuing a high level of business travel spending, despite a recessionary environment and a slowing in the growth of corporate travel and entertainment (T&E), according to the American Express 1992-1993 Survey of Business Travel Management, released today. In fact, over two-thirds of companies participating in this year's survey reported that they have either increased or at least maintained their level of business travel spending since 1990.
 The survey also found that a greater percentage of employees in the average company are traveling and incurring local T&E costs today, while average travel costs per employee are rising rapidly. At the same time, companies are attempting to exert more control over their T&E costs than they were two years ago, and investing more in international travel.
 "Even in the face of corporate downsizing and cost controls, companies continue to invest heavily in travel in order to conduct business today," said Roger Ballou, president, American Express Travel Services Group, USA. "This T&E growth trend clearly illustrates that neither a sluggish economy, the Gulf War or the advent of video- conferencing can lessen the importance of face-to-face contact in business."
 This year marks the tenth anniversary of the survey, which has been examining corporate America's T&E policies, practices, spending patterns and attitudes since 1982.
 According to American Express, travel and entertainment is the third-largest controllable expense for most companies, ranking below salaries and data processing. Total business travel expenditures are expected to grow from $115 billion in 1990 to an estimated $130 billion for 1993. A decade ago, that figure was $70 billion.
 More than 67 percent of the companies participating in this year's survey said they have either increased or at least maintained their level of business travel spending since 1990, with over 28 percent of this group reporting increases of 10 percent or more. Thirty percent of the surveyed companies said their T&E costs had decreased.
 The survey also found that a significantly higher percentage of a company's total workforce travels and entertains for business today. In the average company surveyed, 34 percent of the employees take at least one business trip per year or incur local T&E expenses for business entertainment, up from 28 percent just two years ago.
 The growth in business travel is even more apparent when expressed per employee. According to the survey, today's corporations are spending 47 percent more on T&E per employee than two years ago, and more than two times as much (adjusted for inflation) than a decade ago, when the first American Express Survey of Business Travel Management was conducted.
 Despite these increases, companies feel that they have done a much better job of controlling T&E costs through activists such as negotiating with travel suppliers, setting and monitoring business travel policies, opting for more moderately priced travel, automating expense reports and reducing cash advances.
 Business Travel: More Essential Than Ever
 Of the 1,550 companies, government and academic organizations polled in American Express' biennial survey, the average private sector firm spent $3,113 per employee on T&E in 1991, compared to $2,121 per employee two years ago -- a 47 percent increase.
 According to Jud Linville, vice president of American Express Consulting Services, which conducted the survey, several factors are fueling corporations' need to travel. "Economic uncertainty and organizational change heighten the need for contact with customers and colleagues," said Linville. "And as marketplace instability creates a need for visible leadership, face-to-face communication is more vital than ever before."
 The trend toward more business travel also corresponds with the increasing focus on Total Quality Management (TQM) methods, which stress employee education and training, therefore increasing the need for business travel.
 "A key component of TQM is an emphasis on understanding customer needs, necessitating more on-site visits to customer facilities," Linville said. "Employees who might not have traveled regularly in the past are now frequently meeting with customers or attending one of several internal team meetings and training programs."
 Companies Say They Are More Successful At Controlling Costs
 As a result of corporate belt-tightening measures, companies are more likely to consider themselves successful at controlling their T&E costs than they were two years ago. Nearly half (47 percent) of those surveyed said they are "extremely successful" or "very successful" at controlling T&E costs, up from 38 percent in 1990.
 The survey confirmed that companies have responded to recessionary pressures by sharpening their focus on controlling all costs, including T&E expenses. Some examples include:
 -- 52 percent of companies surveyed have a policy mandating that all employees fly coach, versus just 37 percent in the 1990 survey.
 -- 58 percent of today's corporations direct employees to use hotels where they receive special rates, compared to 42 percent two years ago.
 -- 74 percent of companies use temporary cash advances, down from 80 percent in the 1990 survey.
 "Unfortunately, a relatively high number of companies are still quite lax in their efforts to take basic steps to control T&E costs, and they're losing money as a result," said Ballou. "Clearly, to be globally competitive, companies must apply the TQM model of 'best practices' in all areas of management -- and T&E is no exception."
 The success in controlling T&E cost varies by the size of the company and the industry in which it operates, according to Ballou. To give companies a more accurate assessment of their T&E cost-control effectiveness, this year's survey for the first time features a scoring model that allows corporations to "benchmark" the success of their T&E management efforts against companies with similar spending patterns in their industry. (See release on T&E Scoring Models/Benchmarking below.)
 Globalization of Business Stimulates International Travel
 Companies are venturing farther afield -- often overseas -- to search for new business opportunities. This "globalization of business" trend is helping to fuel the increased importance placed on international business travel.
 Since the 1990 survey, the average percentage of total T&E dollars spent by companies on international travel rose from 8 percent to 10 percent. Ten years ago, the survey found this figure to be 6 percent. Companies that spend over $5 million in T&E spend 20 percent of their T&E budgets on international travel (up from 17 percent two years ago).
 "Europe, the Far East and Latin America are offering significant growth opportunities for companies whose domestic markets are shrinking from competitive pressures," said Ballou. "Today's companies simply must travel -- both more frequently and greater distances -- in order to survive and to grow."
 Survey Methodology
 The American Express 1992-93 survey of Business Travel Management is the sixth biennial edition of the most comprehensive survey of Corporate America's travel and entertainment expense management. Published by American Express Travel Management Services, the 1992-93 edition examines the attitudes, policies, practices and spending patterns of nearly 1,600 companies, government and academic organizations.
 The information for the American Express 1992-93 Survey of Business Travel Management was obtained from a mail questionnaire sent to U.S. businesses, government and academic organizations in February and March of 1992. Approximately 12,000 companies and organizations were contacted. Questionnaires were returned by 1,675 organizations, for an overall response rate of 14 percent. A total of 1,550 questionnaires from private and public sector organizations were satisfactorily completed to make up the survey base.
 American Express Travel Management Services, which includes the American Express Corporate Card and Business Travel Services, assists companies in managing and controlling their business travel expenses. It is a unit of the American Express Travel Related Services Company, Inc., a wholly owned subsidiary of the American Express Company -- a family of travel, financial, insurance and communications businesses.
 -0- 10/13/92
 /CONTACT: Christine Levite of American Express, 212-640-3382, or Patrick Di Chiro of Ketchum Public Relations, 212-536-8740, for American Express/ CO: American Express Travel Related Services ST: New York IN: LEI SU:


PS-EE -- NY064 -- 9448 10/13/92 15:32 EDT
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Date:Oct 13, 1992
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