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Travel trials.

Are you traveling less on business these days? Did you get a memo that asked you to cut out all unnecessary business trips? Many executives have decreased their time on the road, but that doesn't mean companies are spending less on travel and entertainment.

"Companies perceive they've cut back on travel," says Christine Levite, of American Express Travel-Related Services Company, "because individuals are traveling less," but that's not the whole picture. Levite reports that more than 67 percent of the U.S. companies American Express surveyed in 1992 have either increased or maintained their level of business travel since 1990, and that companies are spending a lot more--47 percent more--on travel and entertainment per employee: $3,113 in 1991 compared to $2,121 in 1989.

Levite dissects the increase: "The big increase in the per-employee spending figure is largely attributable to downsizing. When you have fewer employees in a company, your total spending is going to be divided by fewer employees so the total per-employee number is going to go way up. Second, now a broader base of the corporate population is traveling. With this downsizing, you're seeing lower-level managers and even secretaries, who 10 years ago never would have traveled, get on a plane to go to a training session, for example."

Is all this travel necessary? Levite thinks so. She says American Express just held its first worldwide travel meeting in 12 years, flying in travel managers from 1,700 offices to brainstorm "what in the heck we're going to do with our business." Like any large company facing change or restructuring, she says, American Express needed to bring together everyone to "lay out a vision, a plan."

Doug Curling, controller of financial practices for Atlanta-based Equifax, Inc., agrees. "Like a lot of corporations, the rate we're going through changes internally is dramatically increasing. Because we need to manage change, and change begets a lot of interaction. I think that drives a lot of the travel."

Equifax's travel function has reported directly to Curling for the last year, moving from a staff function when the company decided it needed to focus more on the cost issues. Under Curling's direction, the company recently hired a full-time travel manager, standardized all the accounting and expense reporting, and centralized the entire travel function under one travel agency.

"We've made a quantum improvement in the kind of information we have available about travel expenditures over the last 12 months," says Curling. "But we're certainly not where we want to be yet."

For Curling, the amount of business travel per employee, or for that matter for the entire company, isn't the real issue. The issue is the quality of the travel.

"We're starting to look at where we're spending our travel dollar and how close to the customer that is," he explains. "If you just get in a customer's face and aren't communicating, then you're not getting value. But, if you're out there trying to understand what's important to the customer and what we can do to better service that customer, then that's a dollar well spent."

Under Curling, Equifax is looking closely at staff travel and the class of service in which employees travel. The company has asked for sacrifices in such areas as limousine use, first-class flights, and luxury hotel accommodations.

Is the controller facing any backlash from its newly perkless executives? "I think the issue is to 'walk the talk,'" he says. "Travel's a touchy topic, a very personal topic. And occasionally we 'll make exceptions to our travel policies at Equifax if, for instance, an employee is suffering above and beyond the call of duty by making some long hauls for the company. What we're trying to be is fair but prudent. And we've really had pretty good cooperation. If you've got tough cost calls to make as an organization--about facilities or products or people-it's a lot easier to get people to focus on the easy dollars. Cutting out flying first-class is a pretty easy dollar savings."
COPYRIGHT 1992 Financial Executives International
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Business Talk; business travel statistics
Author:Couch, Robin L.
Publication:Financial Executive
Date:Nov 1, 1992
Previous Article:My goals for FEI.
Next Article:What's next: surviving the 'lost decade.' (Viewpoint)

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