10 November 2021, Virtual
London, UK - November 2021
London, UK - December 2021
Research by Oxford Economics unveiled at the GTMC conference in Florida shows that business travel is a significant and direct factor in economic growth.
The study found that if international business travel returns to pre-financial crisis levels in the next five years, it could increase UK trade by £6.5 billion, and Foreign Direct Investment (FDI) by £1.6 billion.
Dr Nishaal Gooroochurn, head of econometrics at Oxford Economics, told delegates that a 1 per cent change in business travel leads to a 0.05 per cent change in total trade, worth around £400 million for the UK.
The research, commissioned by the GTMC, used the ‘gravity model’ approach looking at bilateral trade and FDI. Dr Gooroochurn pointed out the study took into account “two-way causality” – the increase of business travel caused by economic growth – and was therefore a more realistic picture than more dramatic figures published by other, similar studies.
He said that international business travel volumes are on an “upward trajectory”, but were still down 17 per cent from 2006-2014.
Among other findings, he revealed the average international business travel trip adds a £34,000 contribution to GDP. Air connectivity also has a significant impact on UK trade, said Dr Gooroochurn: a 1 per cent increase generates a 0.09 per cent rise in trade, equivalent to £600 million – a figure that delegates argued strengthens the case for airport expansion in the south east.
Dr Gooroochurn said the report, entitled The Value of International Business Travel, “outlines that business travel has not yet recovered from its pre-2008 levels, and defines the remarkable impact on the UK’s economy that such a rebound would bring.”
He added: “Our findings demonstrate the huge worth of business travel as an industry sector to the UK.”
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