Dear Valued Client,

As we begin the planning and budgeting process for next year, many of our clients ask us what to expect in terms of cost increases and industry trends.

Travel and Entertainment costs have remained relatively flat for the past 3 years, but the industry experts and statisticians predict that will change beginning in 2005. Runzheimer International predicts that overall travel expenses will increase by 10%, with air travel increasing by 10%, lodging as high as 13 %, car rental increasing by 6%, and business meals increasing by 10%. I have advised many of our clients to budget a modest increase of 3% for next year.

The average ticket price for our entire client base of over 1,600 companies has actually decreased substantially each year for the past 5 years, and our corporate affiliation with the American Express Hotel Program will keep hotel rates in line and even add a few extra amenities.

The car rental industry has seen consolidation which will increase rates and business meals will also increase.

Business Travelers are expected to hit the road in record numbers in 2005. Trade show and conference attendance is expected to increase and incentive travel will see a significant increase.

We greatly appreciate your business and if there is anything that we may assist you with please do not hesitate to call any of our 13 full service travel offices.

Sincerely,

Terry W. Brennan
President