Travel Service Providers to Market to Expanding Businesses
During the recession, marketers were advised against cutting their advertising budgets because doing so would result in further loss of business. Could marketers also be facing a loss of business because they’ve been cutting travel budgets? New research from American Express Global Business Travel and the GBTA Foundation (Global Business Travel Association) suggests that businesses should reconsider the link between their travel budgets and revenue growth. The findings of this research should also prompt travel marketers to target businesses.
To understand how business travel expenses affect corporate revenue levels, analysts studied over 900 public companies. The study covered a 10-year period and considered characteristics such as business size, industry, corporate culture, productive travel spending and international presence. In general, all U.S. businesses should consider increasing their business travel activity by 4% to improve revenue. According to this study, some industries have yet to achieve the right balance between travel spending and revenue growth. While business services and sports sectors have achieved ‘optimal’ travel spending, the following segments could improve their bottom line by boosting business trips:
- Banking and finance
- Retail firms
Overall, for each $1 spent on business travel, a company can generate $20 in new profit. "This study further affirms the link between business travel spending and corporate growth, giving businesses a reason to think about travel as an essential investment and not just a bottom-line expense to incrementally reduce year after year," said Christa Degnan Manning, director, eXpert insights and Research, Advisory Services, American Express Global Business Travel.
As the economic expansion gets underway, look for travel service providers to increase ad campaigns aimed at businesses.[Source: New Research Measures Business Travel Spending Relative to Top-Line Company Growth. AmericanExpress.com. 17 Feb. 2011. Web. 17 Mar. 2011]