Business travel is big business
While travellers and companies tend to treat business travel as just an expense, new research shows that it’s actually a significant investment in the growth of individual businesses and the health of the global economy.
Think about this the next time you submit an expense report: if business travel were cut by 25% for two consecutive years, global GDP would decline 5%, resulting in 30 million fewer jobs worldwide, according to a new report from the World Travel and Tourism Council (WTTC).
The Council's report, Business Travel - A Catalyst for Economic Performance, also finds that business travel yields a return on investment of ten to one (in the US, the return is larger - 12 to 1). So think about that expense report again. Let's say it totals around $1,000. This research shows that, on average, your company can eventually expect a return of at least $10,000 in sales as a result of your business trip.
Part of the research study included a survey of 500 business travellers and executives from the US, United Kingdom, Germany, Brazil and China. Results showed how business travel and sales are linked. On average, executives said that 29% of their companies' new sales depend on business travel and that 50% of prospects become customers when an in-person meeting takes place, versus only 31% without one. Nearly 40% of executives fear that they would lose customers to competitors without face-to-face meetings.
The report also shows a clear link between international business travel and growth in world trade. Countries with larger outbound business travel markets tend to enjoy higher exports. Also, rapid growth in business travel is linked to rapid trade growth. For example, recent increases in outbound travel are resulting in higher exports from the UK and Brazil.
All of this means that those who have been sitting on the sidelines over the last few years as the global economy contracted will soon be crossing borders more frequently on their business trips. There's already evidence of this in a new survey of Chief Financial Officers by American Express revealing that international travel will drive a larger proportion of spending growth than domestic travel. Nearly 30% of CFOs plan to increase spending more on international travel compared with 20% who plan to spend more on domestic travel.
Chris McGinnis is the business travel columnist for BBC Travel.