Yet another sign of the times: no more fancy steak dinners on the company's tab. Morton's Restaurant Group, which derives 80 percent of its revenues from business travelers, stands to take a hit in 2009, thanks to serious cuts in travel spending, Jefferies & Co. analyst Jeff Farmer warned investors recently.
Morton's isn't likely to be the only one suffering. About one-third of corporate travel directors foresee reduced travel spending in 2009, while another third will hold it steady, according to a recent survey by the Association of Corporate Travel Executives. And as airline prices rise, even "those spending the same would ultimately be traveling less," ACTE executive director Susan Gurley noted in a press release.
Still, most companies can trim travel-and-entertainment budgets 30 percent by "traveling smarter," starting by scrutinizing what happens in the office, says Frank Schnur, a vice president at American Express Business Travel.
Advanced purchasing, for one, saves companies an average of 17 percent on airfare, Amex estimates. Scripps Networks CFO Jim Clayton whittled down his entire travel budget 10 percent simply by closely monitoring employees' airfare purchases. After he E-mailed employees who frequently made last-minute bookings, the number decreased "significantly," he says.
Many companies are minimizing internal meetings that require travel, according to the ACTE survey. Design consultancy Continuum is holding more meetings via video and Web. The company has also reduced the number of employees who attend conferences, but CFO Jim Ahern labels some draconian efforts to rein in spending as "shortsighted." Continuum designers still travel in business class when they fly internationally, Ahern says, so they can be "fresh and ready for meetings." Maybe there's a lesson in that for the steak-deprived: stress the ROI of the meal.