Business travel pays. But it can be hard to justify sometimes. Are you thinking of cutting back on business travel as a way to save money during challenging economic times? For many companies, it's an easy target. Saving money on airfare, hotels, and rental cars can go right to the bottom line.
Think again—a study of 15 major industries has found that business travel drives sales and produces big profits. Cutting back on business travel may be a mistake. In fact, these top 5 business travel trends show how organizations can make business travel even more valuable. In other words, while business travel costs money, it has a direct and positive impact on a company's top line revenues.
Impact of Business Travel
The study, conducted by IHS Global Insight on behalf of the National Business Travel Association, found that the average incremental return on investment for business travel is 15 to 1. In other words, for every dollar spent on business travel, the average company reaps a $15 rise in profit from increased sales.
Specifically, the study found that business travel can contribute to increasing sales. Organizations with larger business travel spending had increased sales volumes. However, the study also found that business travel returns varied by industry. For example, the incremental ROI for business travel in the manufacturing industry was a bit over ten percent. For the transportation industry it was just over 50%. Thus, your return from business travel spending will depend on your specific industry.
Boosting business travel not only earns money, but it also creates jobs. The study found that raising travel expenditures to optimal levels would create 5.1 million new jobs and generate more than $101 billion in tax revenue.
It’s tempting for struggling companies to slash travel budgets and rely on teleconferencing in an attempt to shore up their bottom line. But sometimes, the best way to win a client, close a deal, and build profit is to get on a plane and make a face-to-face connection.
Other Ways to Make Business Travel Pay
Individual travelers may also want to maximize the value of business travel by referencing these tax tips and suggestions for keeping track of business travel receipts. You can also reduce business travel expenses by finding cheaper airline flights.
When I travel, I try to optimize by business travel expenses by finding the cheapest hotels available. When I'm on the road, I'm there to do business, not take a vacation.
Also, more and more business travelers are using ride share services such as Uber and Lyft. They're sometimes not only cheaper than taxis but they can be more convenient for business travelers because all the billing is done through the user's account. That makes it easier to retrieve receipts later and create your expense reports.