Findings from two studies released last week, one commissioned by the U.S. Travel Association and one by the National Business Travel Association and American Express Business Travel, each show a positive correlation between business travel spend and the growth of corporate profitability.
According to the Return on Investment of Business Travel study, conducted by Oxford Economics and commissioned by U.S. Travel, every dollar invested in business travel yields an average $12.50 in increased revenues and $3.80 in new profits.
The three-part study—which involved surveys of 300 corporate executives and 500 business travelers, as well as a 13-year economic analysis spanning 14 industries—found that business travel in the U.S. accounts for $246 billion in spending and 2.3 million American jobs, with $100 billion of this spend and 1 million American jobs directly linked to meetings and events.
The study also correlated investment in meetings, trade shows, and incentive travel with a company’s financial growth. According to the findings:
- Surveyed corporate executives and business travelers estimated that 28 percent of current business would be lost without in-person meetings.
- Executive respondents cited customer-facing meetings as having the greatest returns, approximately $15 to $19.99 per dollar invested.
- Conference and participation yielded estimated returns of $4 to $5.99 per dollar invested, according to surveyed execs.
- Corporate executives estimated that in order to achieve the same effect as an incentive travel reward, an employee’s total base compensation would need to be increased by 8.5 percent.
- Roughly 80 percent of the executives and business travelers surveyed said incentive trips had a high impact on employee morale.
- More than half of business travelers stated that 5 percent to 20 percent of their company’s new customers were gained as a result of trade show participation.
The full report was released on September 15 and is available on the U.S. Travel Association’s Web site.
In a similar study, conducted by IHS Global Insight and commissioned by NBTA and AEBT, initial findings reveal that a 1 percent increase in business-travel spend yields a corresponding 1.7 percent increase in sales.
The study analyzed 10 years of government data from 9,500 companies across 15 industries. Initial findings were released on September 14, and the full report will be available at the end of the month.
The two studies above are the latest research to come out in defense of business travel and meetings. Other recent studies on the topic include a June 2009 survey conducted by Forbes Insights, which found that 84 percent of execs prefer in-person, face-to-face business meetings for reaching a variety of business goals over webconferences, videoconferences, or teleconferences. (Forbes Insights is a custom research division of Forbes Media, publisher of Forbes magazine.)
And a fourth study, sponsored by British Airways and conducted by Harvard Business Review in June, revealed that 95 percent of respondents believe that in-person meetings are a key factor in successfully building and maintaining long-term relationships, while 79 percent said that face-to-face meetings are the most effective way to meet new clients and make sales.
The full HBR study is available on British Airways’ Web site.