Not too long ago, the United States Travel Association published the results of a study (find the entire report at www.ustravel.org) it had commissioned through Oxford Economics. The study proved that business travel drives revenue and, ultimately, profit growth.
In fact, for every dollar invested in business travel, Oxford Economics determined that businesses experience an average $12.50 in increased revenue and $3.80 in new profits. For this study, "business travel included sales trips, meetings, conventions, and incentive trips." Their analysis was comprehensive, covering 14 economic sectors over a span of 13 years.
Business executives cited customer meetings for having the greatest returns, in the range of $15 to $19.99 per dollar invested. That’s an impressive 1,500 to 2,000 percent return on investment (ROI). The same executives identified the average return on conference and trade show participation to be in the range of $4 to $5.99 per dollar invested.
Both executives and business travelers estimated that approximately 40 percent of their prospective customers were converted to new customers with an in-person meeting compared to 16 percent without such a meeting.
On the other hand, curbing business travel has a negative impact on corporate profits. The average U.S. business would forfeit 15 percent of its profits in the first year of eliminating business travel. Profit recovery would take more than three years. Both executives and business travelers alike estimate that 28 percent of their current business would be lost without in-person meetings.
Moreover, if you think that web meetings and teleconferences are just as effective, think again. Among corporate executives, 85 percent found these remote meetings with prospective customers to be less effective than in-person meetings, and 63 percent believe virtual meetings are less effective than in-person meetings with current customers.
However, clearly the most remarkable finding relates incentive travel to compensation. According to the responding executives, companies would need to increase an employee’s total base compensation by 8.5 percent in order to achieve the same effect as incentive travel.
Moving into the future, wise companies will recognize the value that their business travelers/road warriors bring to the table. These enlightened employers worldwide will find innovative ways to support these valuable employees in being more effective and having less stress.
