New US study confirms direct connection
The growth of a company's revenue and profit is directly linked to its level of business travel, a new report claims.
For every dollar invested in a company meeting, the return is between $15 and $19.99, the research by Oxford Economics says.
The study also found that for every dollar invested in travel, businesses on average increased revenue by $12.50 and profits by $3.80.
Returns on investment in conference and trade shows ranged from $4 to $5.99 for every dollar spent.
A 10% rise in business travel spending would lead to an increase of 1.5% to 2.8% in the US GDP, the study said.
Oxford which conducted the research on behalf of the US Travel Association, questioned 300 American executives and 500 business travellers.
The global research company said its findings established "the first clear link between business travel and business growth".
Adam Sacks, managing director of Oxford Economics, said: "This study shows that not all spending cuts are smart cuts.
"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."
The study said that an average American business would lose 17% of its profits in the first year of stopping business travel and it would take "more than three years" for profits to recover.
Roger Dow, the US Travel Association's president and ceo, said: "Business travel is economic stimulus.
"In order to grow, businesses have to invest. This research shows that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make."
Oxford said its research had been carried out over 13 years in 14 different sector of the US economy.
Global Insights, a US travel consultancy, is also researching the ROI of business travel for the National Business Travel Association.
It is due to present its full findings later this year.
www.ustravel.org