Recent Oxford Economics research makes a striking point that can’t be ignored – the average international business travel air trip triggers a £34,000 contribution to GDP.
The report, “The Value of International Business Travel” was commissioned by the GTMC, the industry body for the travel management sector. Members are made up of professional Travel Management Companies (TMCs) who work on behalf of companies to advise on travel strategies and book smarter – a little like an expert travel agent for businesses.
For any business, whatever the scale, the planning and booking of a simple trip can end up costing precious time and money. No one would disagree that a business leader spending time booking travel is not the best use of their time.
A TMC takes this away, but also ensures that duty of care responsibilities are met by employers and that travel is delivered on budget. They are a business consultant who can help you go faster, and reduce the financial outlay.
Throughout the research is a clear link between business travel and economic prosperity. Staggeringly, the findings show that if business travel returns to pre-financial crisis levels within the next five years, then £6.5bn will be added to the value of UK trade.
If international air business travel volumes continue on the upward trajectory that they have enjoyed since 2010, then the return to the wider UK economy would be very significant.
The report went further and looked at what the estimated value of business travel is to imports and exports, and Foreign Direct Investment (FDI). An increase in business travel of one per cent grows FDI by 0.3 per cent, the equivalent of providing a £100m boost to investment.
A return to pre-crisis levels of business travel could grow inward FDI by £1.6bn – an amount that equates to five per cent of the total FDI in 2012.
Business air travel boosts trade – a one per cent increase in total business travel volumes will boost trade by around £400m, or 0.05 per cent. Plus, business air travel plays a greater role in driving exports than imports – a one per cent increase in business travel increases exports by 0.05 per cent, and imports by 0.03 per cent, around £160m and £125m respectively.
Perhaps most powerful, there is strong evidence that greater trade and FDI provide a boost to productivity. The extra trade and FDI generated from a one per cent increase in international air business travel would boost productivity and increase UK GDP by £390m.
The numbers are impressive and wholeheartedly outline the direct correlation between business travel and imports, exports, foreign direct investment (FDI) and productivity.
For any business leader looking at allocating business development budgets – travel is not an area to reduce.
But how can businesses make the most of these opportunities and can using a TMC help? Find out on the next page.
Share this story