Business Travel’s Powerful Effect

Business travel has a powerful effect on the country’s economic health, according to a new study from the Global Business Travel Association (GBTA) Foundation.

It found that in 2012 business travel accounted for about 3% of the U.S. gross domestic product (GDP) – or $491 billion. Business travel supported 7.1 million jobs domestically and generated $118 billion in federal, state and local taxes.

For every 1% increase in business travel spending, the U.S. economy gains an additional 71,000 jobs, $3 billion in wages and $1.2 million in tax collections, the report noted.

Intercontinental Hotels Group was the corporate sponsor for the study, which is titled, “The U.S. Business Travel Industry: Road Warriors’ Impact on Jobs and the Economy.”

“While the road warriors’ focus is on closing deals, it comes as no surprise the huge impact the business travel industry has on the nation’s economy,” said Michael W. McCormick, GBTA’s executive director and COO.

More spending potential
Business travelers spend “hundreds of billions” on hotels, airports and restaurants, said McCormick.

If governments enacted pro-business traveler policies, companies would spend even more, “adding another $13 billion in travel spending and yielding $915 billion in new sales and nearly $250 billion in additional gross profit,” he added.

In other findings, the study said that in 2012 the nation’s businesses spent $384 billion to send travelers out on 452 million business trips.

Communicating face to face
Reacting to the report, travel executives and government officials stressed the importance of the face-to-face communication fostered by business travel.

“Electronic communication is important to our economy but it cannot completely replace the personal connection formed by meeting face to face,” said Rep. Sam Farr (D-Calif.), co-chair of the Congressional Travel and Tourism Caucus.

Mike Fegley, vice president, America sales, for Intercontinental Hotels Group, said “The study shows we can really move the needle of the economy by getting out on the road for face-to-face meetings conducting business and generating jobs.”

Effect on states
Rep. Gus Bilirakis (R-Fla.), co-chair of the Congressional Travel and Tourism Caucus, noted business travel’s positive effects on state economies.

“Business travel is an important aspect of travel and tourism,” said Bilirakis. “Florida’s tourism industry [in 2012] supported over 1 million employees and contributed over $51 billion to Florida’s economy.

“Business travel and the tourism industries are a crux of economic vitality across the country, and especially in states like Florida,” he added.