Entertainment, Travel Expenses To Hold Steady

Corporate travel and entertainment expenses likely won’t change this year, despite a projected reduction in air fares for business travelers, said an industry study released Thursday.

A 2 percent to 4 percent decrease in business air fares in 1995, atop a 10 percent reduction last year, will be offset by increased lodging and car rental costs, American Express Travel Related Services Co. Inc. said.

Meal and entertainment costs are expected to rise 1 percent to 2 percent.

Airline tickets typically account for about half of corporate travel and entertainment spending, while meal and entertainment costs make up 25 percent.

American Express said lodging expenses are to increase 3 percent to 5 percent and car rental expenses by 5 percent to 6 percent.

“With prices rising for hotel rooms and rental cars, companies should focus more than ever on expense management to help control costs in a tougher negotiating environment,” said James Yasinski, a senior vice president with American Express Travel Management Services.

The air fare reductions are due to successful cost-cutting efforts by airlines and competition from low-cost carriers.

American Express said a continued strong demand for hotel rooms will push lodging prices up this year.

Car rental rates also will rise, but meals will increase only slightly.