WTTC study underscores importance of coporate travel to the global economy

Business travel in the US is recovering and given its importance to global trade and national economies, it was hardly surprising to note the upbeat atmosphere at the 11th Global Travel & Tourism Summit in Las Vegas.

At the panel discussion session, titled “The Business of Doing Business”, Ms Aw Kah Peng, CEO of the Singapore Tourism Board (STB), highlighted that corporate travel was a key pillar of Singapore’s tourism success. Even though it represented only 27 per cent of arrivals, business travelers accounted for approximately 40 per cent of total expenditure.

“Corporate travel is especially relevant to us now more than ever,” she told the audience.

In Singapore’s case, she explained that since Asia was a substantial market which made up about 70 per cent of visitor arrivals, the tourism industry had not been so affected by the slower economies in US and Europe.

Mr Doug Anderson, President and CEO of Carlson Wagonlit Travel, revealed that the company was growing again in the US exceeding the levels experienced in 2007.

He added that despite the slowdown, “growth rates in Asia Pacific were never negative. The region was still showing 10 to 20 per cent growth, much like Latin America. The resilience of Asia Pacific is very impressive.”

In spite of healthy prospects for the business travel sector, however, he warned that clients are increasingly discerning in terms of the ways in which they spend their money.

During the panel discussion, the World Travel & Tourism Council (WTTC) – the organizer of the summit, also shared the findings of its latest economic impact research on business travel.

The report underlined the importance of the sector, pointing out that business travel has accounted for one third of growth in global trade over the past decade, improved global corporate productivity tenfold and created millions of jobs worldwide.

Some of the key findings of the research:

• Growth in business travel from 2000 to 2007 helped create over 40 million jobs through increases in trade and productivity representing 20 per cent of the growth in global employment over the same period.
• Global business travellers believe that 50 per cent of their prospective clients become actual customers as a result of face to face meeting compared with 31 per cent without such a meeting.
• If business travel were cut by 25 per cent for two consecutive years, global GDP would be five per cent lower than would be the case after a five-year period resulting in 30 million fewer jobs than forecasted under baseline assumptions for the same period. This translates into an average loss of one per cent of global employment.
• Business travel improves corporate productivity, yielding a return on investment of 10:1.
• Business travel is integral to international trade and it is estimated that one third of global trade over the past decade has been driven by international business travel.

The STB was one of the sponsors of the survey – other sponsors were American Express Company, Las Vegas Convention & Visitors Authority and the US Travel Association. It was conducted by Oxford Economics which carried out surveys on 500 global business travellers and executives in the United States, United Kingdom, Germany, Brazil, and China.

In addition to this, an econometric analysis covering 190 countries tested for causal relationships between business travel and national economic performance.

Mr David Scowsill, President and CEO, World Travel & Tourism Council, commented: "As the industry begins to recover from the financial crisis, the business travel segment has remained in flux, so we wanted to examine in more detail the role that business travel plays in driving corporate performance.

"Our findings confirm that business travel not only helps company profitability, it also grows economies, raises incomes, and creates jobs."