For every dollar invested in business travel, businesses experience an average of $12.50 in increased revenue and $3.80 in new profits, according to a study released yesterday by the U.S. Travel Association. The comprehensive Return on Investment of U.S. Business Travel was conducted by Oxford Economics and is composed of three different methodologies: an econometric analysis of the effect of business travel on U.S. businesses covering 14 industry sectors over a span of 13 years; a study of 300 U.S. executives conducted in May 2009 via LinkedIn, and an online survey of 500 business travelers. The study was sponsored by the Destination & Travel Foundation, a combined effort of the USTA and the Destination Marketing Association International. Among other findings:
• A 10 percent increase in business travel spending would increase multifactor productivity, leading to a U.S. GDP increase of between 1.5 percent and 2.8 percent.
• Both the executives and business travelers polled estimated that 28 percent of current business would be lost without in-person meetings.
• Seventy-nine percent of the executives surveyed said incentive trips had a high impact on employee morale, while 80 percent of business travelers agreed.
"This study shows that not all spending cuts are smart cuts," said Adam Sacks, managing director of Oxford Economics. "When companies reduce their travel budgets, there are negative consequences that we can now quantify, in terms of lost revenue and profit growth, and in terms of giving competitors a distinct advantage." During a press conference yesterday, he said the outlook for business travel in 2010 was “modest growth,” with more robust growth expected in 2011.