Travel in the Economic Downturn
This year (and all of 2008-2009) has been a difficult year for business travel, in part because businesses have cut travel in the face of economic, political, budgetary, and even media pressure. However, business travel is an essential part of economic recovery, new jobs, and corporate productivity. NBTA recently released a study indicating that businesses can realize more than $15 in profits for every $1 spent on business travel. The research indicates that companies are potentially losing out on nearly $200 billion in additional gross profits because they are not optimizing their investments in strategic business travel.
The analysis shows a clear link between travel spending and corporate profits, with the return on investment varying across the several industries examined. The study also illustrates that for each industry there is a point at which increasing business travel spending begins to cut into profits. Among the study’s key findings:
- Business Travel Contributes to Sales: A significant and measurable relationship exists between business travel expenditures and sales volumes.
- Sizeable Returns on Investment: An average return on business travel investment of 15-to-1.
- Billions in Profits at Stake: Companies within most industry segments are not operating at optimal travel expenditure levels and collectively could realize over $100 billion in additional profits.
- Stimulative Effect on the Economy: Increasing travel expenditures to optimal levels could create over 1 million new jobs while generating significantly more in tax revenue.
The study examines 10 years of data for 15 industry sectors covering the economy, analyzing industry-level data on business travel, business expenses, revenues and profitability in order to establish a link between business travel and corporate profits. At Edgemount Solutions, we aim to understand this link which highlights the importance of building relationships with vendors and forming collaborative marketing efforts for target markets. This ultimately leads one to get in front of the clients and vendors through various meet and greets, client socials, conferences, and industry expos. By developing these experiences for your clients, you’ll naturally increase your return and can measure the success of the tasks/events or track purchases.
To learn more, we recommend you visit the Global Business Travel Association (GBTA) Foundation at: http://www.gbta.org
Check out the recent studies published by the GBTA Foundation: http://www.gbta.org/USA/RESOURCELIBRARY