ROI of Business Travel
New research conducted by Oxford Economics, and sponsored in part by the Destination & Travel Foundation, establishes the first clear link between business travel and business growth as American businesses are planning their 2010 budgets and federal policymakers are looking to stimulate the American economy.
Oxford Study: ROI of Business Travel
For every dollar invested in business travel, businesses experience an average US$12.50 in increased revenue and US$3.80 in new profits, according to the study.
This is the first time that the return on investment of business travel has been successfully measured. The study found that curbing business travel can have a strong negative impact on corporate profits. The average business in the U.S. would forfeit 17% of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover.
Business travel in the U.S. is responsible for US$246 billion in spending and 2.3 million American jobs; US$100 billion of this spending and 1 million American jobs are linked directly to meetings and events. In the first six months of 2009, business travel spending is down by 12.5% and business travel volume is down more than 6 percent. A 10%increase in business travel spending would increase multi-factor productivity, leading to a U.S. GDP increase between 1.5% and 2.8%.
Both executives and business travelers estimate that 28% of current business would be lost without in-person meetings. Roughly 40% of prospective customers are converted to new customers with an in-person meeting, compared to 16 percent without such a meeting. Executives cited customer meetings as having the greatest returns, approximately US$15-US$19.99 per dollar invested, with conference and trade show participation returns ranging from US$4-US$5.99 per dollar invested.
For copy of the full study and additional resources, go here.