This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

May 22, 2013

The ROI of Business Travel and its Future

Not too long ago, the United States Travel Association published the results of a study* it had commissioned through Oxford Economics. The study proved that business travel drives revenue and ultimately profit growth.

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.

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 1500 to 2000 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.

On the other hand, curbing business travel has a negative impact on corporate profits. The average US business would forfeit 15 percent of its profits in the first year of eliminating business travel. Profit recovery would take over 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.

* You can find the entire report at

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