Was This Trip Really Necessary (or Profitable)?

A recent study purports to disprove the notion that business travel is a nonessential expense that does not contribute to sales and profits. The study indicates an incremental 1% increase or decrease in travel spending yielded a corresponding 1.7% increase or decrease in sales. Results varied by industry.

The research was conducted by IHS Global Insight and commissioned by the National Business Travel Association and American Express Business Travel. It used data from 1998 to 2008 and across 15 industries and 9,500 U.S. companies.

“We supported this research to begin to apply the critical ROI business discipline to travel that business leaders need to guide decision making around all expenditures and tie them to business outcomes,” American Express Business Travel Vice President and General Manager Hervé Sedky said in a news release.

The research also explored the optimal point of travel for each industry sector. Of the 15 industries studied, the research suggests that the chemical manufacturing (which includes pharmaceutical and medicine) and retail/wholesale industries could have benefited by increasing their average yearly spending in business travel over the last 10 years. Other industries, including business services and consulting, may have reached their maximum return on travel expenditures based on the last 10 years of average spending data, and an increase in business travel is not likely to correlate to increased sales and profit in those industries, according to the news release.

Source: National Business Travel Association, nbta.org.