Given the ready availability of cheap airplane tickets and discount hotel rooms and a recent report which recommended that American companies boost their business travel spending by an average of 4 percent in 2011 to better maximize sales revenue, now appears a great time for businessmen to be flying.
The report was issued by American Express Global Business Travel and the Global Business Travel Associations research division. The report noted that the additional investment in travel being proposed would equate to $72 per employee.
At econometric analysis of the relationship between travel spending and revenue of 900 public companies in the years between 1998 to 2009 revealed that for every $1 strategically invested in business travel companies saw an increase of $20 in gross profit.
The report noted that American corporations cut back on travel too much during the recent recession, contributing to the economic downturn and making it more severe that it might otherwise have been.
Between 2007 and 2009 travel expenditures were cut by almost $35 billion, a 13 percent drop. According to the reports analysts the travel reduction was $3.7 billion more than warranted, resulting in a loss of top line sales of approximately $26 billion.
Ten years ago travel amounted to 1.4 percent of every revenue dollar vs. 0.9 percent today. The study found that banking, pharmaceutical and retail companies were the most likely to under spend on travel, thus reducing revenue growth. www.cheapfares.com