For every $1 they spend on business travel, businesses see an average of $20 in additional gross profit, finds a new study from American Express Global Business Travel and the Global Business Travel Association (GBTA) Foundation, the results of which were released yesterday.
The study, titled "Return on Investment Refresh: Travel as a Competitive Advantage," benchmarks the travel spending businesses require to help support their growth, and concludes that companies — to their detriment — often overlook travel as means to gaining competitive advantage.
"This study further affirms the link between business travel spending and corporate growth, giving businesses a reason to think about travel as an essential investment and not just a bottom-line expense to incrementally reduce year after year," said Christa Degnan Manning, director, eXpert insights and Research, Advisory Services, American Express Global Business Travel. "Companies can use this study as a guidepost in evaluating optimal levels of spending appropriate for their business objectives based on corporate characteristics, as well as benchmarking themselves relative to their peers. Considering optimal spending within a managed travel program that also includes virtual meeting solutions is a key component to achieving a balanced, successful program."
To reach optimal revenue potential, the study found, U.S. industries should increase business travel spending by an average of just over 4 percent, which translates to an average of just over $70 more per worker. Doing so is especially important in industries that under-spend; according to the study, business services, entertainment and sports sectors typically already operate closer to optimal levels while banking and finance, pharmaceutical and retail companies could likely benefit from greater business travel spending growth.
"With this research, corporations have the ability to take their managed program to the next level and use the benchmarking data to competitively manage their budget, by understanding if they are operating at their optimal level," said GBTA President and CEO Craig Banikowski. "Business travel is a key component to the success of a company and business travel buyers must play a role by working directly with the C-level to drive revenue growth. Now that the economy is in recovery, companies have a chance to optimize their travel spending, creating new connections and new growth."