USTA Study Claims High Return On Business Travel

By Andrea Doyle / September 14, 2009

The U.S. Travel Association today released a study that draws a direct link between business travel and corporate revenue and profit growth.

According to the study, conducted by global research firm Oxford Economics, for every dollar invested in a company meeting, the return is in the range of $15 to $19.99. Conferences and trade shows are in the $4 to $5.99 range. Data also showed that in order to achieve the same effect of incentive travel, an employee's total base compensation would need to be increased by 8.5 percent. According to the figures, an incentive trip yields a return of more than four times the investment, not including any broader motivation the opportunity provides to those who do not meet the award criteria.

Oxford Economics USA conducted the study of 300 U.S. corporate executives and 500 business travelers from late spring through the summer. A professor of finance and economics at the Wharton School at the University of Pennsylvania audited the methodology.

Other findings indicated that for every dollar invested in business travel, businesses average $12.50 in increased revenue and $3.80 in new profits.

"This study shows that not all spending cuts are smart cuts," said Adam Sacks, managing director of Oxford Economics. "When companies cut 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."

The study also found that curbing business travel can have a strong negative impact on corporate profits. The average business in the United States would forfeit 15 percent of its profits in the first year of eliminating business travel.

"Business travel is economic stimulus," said Roger Dow, president and CEO of the U.S. Travel Association, which commissioned the study. "In order to grow, businesses have to invest. This study shows that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make."

More