Global business travel spending reached a record-breaking $1.33 trillion in 2017, a figure that is only set to rise in the coming years. That’s an astonishing number (it’s larger than Australia’s GDP) and one that begs the question: why are companies spending so much on corporate travel? Haven’t face-to-face meetings gone the way of dial-up internet and fax machines? The short answer—when it comes to business, travel matters.
Let’s take a few minutes to look at why. The first reason is the most obvious, as study after study has shown that business travel spending reaps significant rewards on a company’s bottom line. Oxford Economics USA published a well-regarded study called The Return on Investment of U.S. Business Travel that concluded that every dollar spent on business travel results in a resounding $12.50 in incremental revenue. That alone is worth pondering, but ROI figures are just the tip of the iceberg. Business travel has many hidden benefits that are incredibly impactful on a company’s long-term growth and success. Let’s take a look at who stands to benefit from a well-managed travel program.
Every dollar spent on business travel results in $12.50 in incremental revenue.
Why Travel Matters to Your Clients
• Face-to-face meetings are essential for building rapport and trust
• The implicit time and effort required shows clients you value their business
• In-person meetings foster engagement, innovation and creativity
• Non-verbal cues are essential for effective communication
Of course, business travel can be a hassle. Long security lines, over-crowded planes and time away from home can be taxing on employees. But many people actually enjoy traveling for work and consider it a perk of their job. This is especially true of companies that take employee satisfaction into consideration when making travel policy decisions.
Why Employees Love to Travel for Work and How Companies Benefit
• New experiences build confidence and skills
• Exposure to different perspectives boosts problem-solving skills and creativity
• Loyalty program points offset vacation costs resulting in higher morale
• The opportunity to explore new places increases job satisfaction
In addition, there are a myriad other ways in which travel has a direct impact on the growth and success of a business. The Oxford Economics study also noted that, “The average business in the U.S. would forfeit 17% of its profits in the first year of eliminating business travel. It would take more than three years for profits to recover.” It’s not hard to see why business trips are more than worth their cost when you consider the facts.
Why Business Travel is the Cornerstone of Success
• Prospective clients are 50% more likely to sign a contract after an in-person meeting
• Face-to-face meetings correlate to higher client retention rates
• Well-managed travel programs attract and help retain talented employees
• Travel offers an abundance of both planned and unplanned networking opportunities
Prospective clients are 50% more likely to sign a contract after an in-person meeting.
You can see why companies choose to invest in corporate travel programs, but as a company’s second or third most controllable expense, it’s also important to remember that more isn’t necessarily better. There’s no denying travel is a serious investment of both time and money, which is why it’s important to invest wisely. A well-managed travel program provides all the benefits of travel while controlling costs. The result? A win-win for clients, employees and the long-term success of your company.
Want to know more about how business travel can impact profits and revenue? Check out this article.
Ready to speak with a corporate travel expert about how you can better manage your business travel? Get in touch with us to schedule a free consultation that can help lower costs and improve employee productivity.