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U.S. Companies Can Boost Revenue by 30% with Strategic Business Travel Management, Study Finds – Image Credit Unsplash+
A recent study by the Global Business Travel Association (GBTA) and the American Society of Travel Advisors (ASTA) reveals that U.S. companies with well-managed business travel programs can achieve up to 30% higher revenue compared to their peers. This research, which analyzed over 3,200 U.S. firms across 17 industries, highlights the significant impact of strategic travel management on company performance.
Study Overview
The study, titled “Quantifying the Return on Investment of U.S. Business Travel: Company Benchmarking Analysis,” provides insights into the return on investment (ROI) of business travel. It aims to equip organizations with actionable data to optimize travel spending and improve business outcomes. The research is a continuation of a previous report by GBTA and ASTA, which offered a broader perspective on ROI and business travel investment for U.S. firms.
Key Findings
The analysis found that for every 1% increase in managed travel spending, there is a 0.20% increase in revenue. Companies that balance strategic travel policy controls with flexibility can outperform those that do not by up to 30%. The study emphasizes the importance of disciplined, data-driven travel management, which is a common trait among growth-oriented firms.
Factors Influencing Travel Spending
Several factors influence travel and expense (T&E) spending:
1. Travel Management Design and Approach: Firms with a strategic approach to business travel policies tend to spend more, reflecting greater travel demand and stronger ROI.
2. Firm Size: Larger organizations benefit from economies of scale, resulting in lower per-employee costs. Smaller firms face higher per-employee travel costs, suggesting a greater reliance on travel for growth.
3. Industry Variation: Sectors with high field activity, such as utilities, healthcare, and public administration, show the most significant per-employee spend. Conversely, industries with location-bound workforces, like food services and education, spend the least.
Travel Policy Enforcement
The study highlights the importance of effective travel policy creation and management as a strategic driver of business performance. Overly rigid enforcement can limit returns, underscoring the need for balanced compliance frameworks that maintain both control and flexibility.
Benchmarking and Actionable Insights
The benchmarking model enables organizations to compare their travel investments with industry peers, accounting for factors such as revenue, employee count, and operational intensity. This allows companies to identify opportunities for efficiency gains or strategic investment. For instance, a company in the Human Health and Social Work sector was found to be underspending by $50,000 compared to its predicted benchmark, while a firm in the Information and Communication sector was overspending by $160,000.
Implications for Business Leaders
The study provides several key takeaways for business leaders:
– A 1% increase in staffing corresponds to a 1.1% rise in travel expenditures.
– Capital-intensive sectors, such as energy and manufacturing, spend approximately 34% more on travel, while labor-intensive industries spend about 27% less.
– Companies with travel management programs spend a higher proportion of revenue on travel compared to the industry average, reflecting higher travel intensity and more structured management.
Conclusion
The research underscores the strategic value of business travel and its impact on company performance. Companies that approach travel management with effective policies, discipline, and flexibility are better positioned to capture new opportunities and outperform their peers. Leveraging data-driven benchmarks is essential for maximizing the value of every travel dollar.
Download the full report here.
