Thurs, July 16 at 1:00 PM ET / 10 AM PTSponsored by: TripActions
Thurs, July 23 at 11am ET / 8am PTSponsored By: American Express Global Business Travel
Tues, June 30 at 11am ET / 8am PTSponsored in part by: Cvent and The Inception Company
Virtual Event - July 29, 2020
Virtual Event - September 9-10, 2020
Hyatt Regency Boston - October 12-14, 2020
Filter in or out as many as 200 cities, as well as hotel and car rental class and meals of the day and watch as the per-diem calculator automatically adjusts per diems to your program. Drill down into cost breakdowns and export the results.
The United States Travel Association with research partner Oxford Economics has added to the discussion about the value of business travelwith an extensive research project announced Tuesday which determined that business travel does indeed offer a return on investment. Moreover, cutting travel for business (including incentives and conferences) eats into profits, the researchers found.
Surveys this year of about 300 corporate executives and 500 business travelers projected that "28 percent of current business would be lost without in-person meetings." The researchers also noted that most customers require in-person meetings, and that such meetings are more valuable than virtual meetings.
Is this common knowledge? Perhaps, but "this is the first time that the return on investment of business travel has been successfully measured," USTA claimed.
Some of the results also question the validity of recent cutbacks in corporate travel demand.
After a separate February survey of about 400 business executives found that 72 percent of "business travel decision makers believe reduced travel is necessary during an economic downturn," the report released this week argued that every dollar invested in business travel produces $12.50 in revenue and $3.80 in profits. Eliminating business travel, the researchers found, would cut 17 percent of profits within a year for the average U.S. business. In-person meetings result in new sales 40 percent of the time, the study indicated, versus 16 percent without such meetings.
'Negative Consequences' To Cuts
"Not all spending cuts are smart cuts," according to Oxford Economics managing director Adam Sacks. "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."
Eighty-five percent of corporate executives perceived Web meetings and teleconferences to be less effective than in-person meetings with prospective customers, while 63 percent believed virtual meetings to be less effective than in-person meetings with current customers. Even for internal company travel, 47 percent and 39 percent of business travelers perceived remote conferencing to be less effective for training and company meetings, respectively.
Scope Of The Sector(s)
Slightly less than 1 percent of the average company's revenue is spent on business travel, according to the report. "In terms of absolute [annual] expenditures, the top business travel spenders are: business services ($60 billion); finance, insurance, and real estate ($48 billion each); manufacturing ($31 billion); and education and health care ($18 billion each). Sales-related meetings comprise about one-third (34 percent) of business travel expenditures. Work at client offices follows with 22 percent. Internal meetings, conferences, and trade shows each represent about 10 percent of the average corporation's travel budget."
A Wharton School finance professor reviewed the Oxford findings, which were based on 13 years of data in 14 economic sectors and "verified" by the business traveler and corporate executive surveys, as well as "a broad review of related research." The initiative was co-sponsored by the Destination Marketing Association International and USTA, which represent destination marketing organizations and travel suppliers, respectively.
Related resource: Download the full study here.
United Airlines in September will inaugurate service between Chicago O'Hare and Tel Aviv and will...
Lot Polish Airlines is resuming some international flights this week for the first time since...
Virgin Atlantic aims to resume passenger flights in late July, starting with five routes to North...