Business travel can help bottom line: study
By Deborah Charles
WASHINGTON (Reuters) - Business travel -- often the target for cutbacks by companies seeking to reduce expenses -- actually boosts profits and could help the U.S. economy come back from the recession, a report found on Tuesday.
Research released by the global research firm Oxford Economics estimated that for every dollar invested in business travel, companies can expect an average $12.50 in increased revenue and $3.80 in new profits.
"Cutting back on business travel can in the short run have some benefits but, even over a 12 month period, (have) significant negative effects on corporate performance," said Adam Sacks, managing director of Oxford Economics. "As companies perform, so does the U.S. economy.
"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 was commissioned in part by the U.S. Travel Association, which represents the American travel industry.
Roger Dow, president of the association, said the report quantified how businesses can benefit from travel and from face-to-face meetings.
The analysis said executives and business travelers estimated 28 percent of current business would be lost without in-person meetings. They said about 40 percent of prospective customers are converted to new customers with an in-person meeting compared to 16 percent without one.
"In this economy especially, business travel has come under greater scrutiny than before," Dow told reporters. Continued...