Although the U.S. has not officially slid into a recession, many businesses are feeling the pinch of a slowing economy. Rising fuel prices and the weakening dollar are causing organizations to rethink how they spend their money. In many cases, travel budgets find themselves at the business end of a cost-cutting initiative.

Businesses across the country are slashing their travel and entertainment budgets. According to a recent Business Travel News Online article, less than half of 333 businesses surveyed reported that they plan to increase travel spending in the next year. A majority said they would either maintain current levels or decrease spending.

For instance, Hewlett-Packard recently eliminated its single companywide T&E budget. Instead, each division now has independent T&E budgets based on revenue. The company has also put caps on the amount employees can spend on hotel rooms and is expanding use of videoconferencing capabilities to reduce travel. Increased videoconferencing has led to a 40 percent reduction in travel spend compared to previous years.

Proctor and Gamble's fiscal year, which ended in June, saw a 30 percent T&E reduction compared to last year. In the BTNO article, P&G Global Travel Service Manager Debbie Gittinger said it took a while for employees to realize the company was serious about cutting back travel.

"Some people have had to stop traveling," she said. "They didn't do a good job the first part of the year. They didn't think the company was really serious until they actually saw it come out of their budget."

Global shipper United Parcel Service has also reduced travel spending. During a recent earnings report, the company stated that profits fell 0.9 percent in second quarter 2008. As a result, UPS implemented a number of cost-cutting measures such as reduced hiring and urging drivers to cut down on fuel use in addition to eliminating non-essential corporate travel.

With American Airlines predicting that overall corporate travel spend will decrease by 20 percent in the coming months, it appears that organizations are tightening their T&E belts for the foreseeable future. Has your organization reduced T&E spend? Register to post comments and let us know how the slow economy has affected your business' travel plans.

For the full BTNO article "Click Here"