According to new research released Wednesday by the World Travel&Tourism Council (WTTC), companies from Southeast Asia generate the highest return on investment (ROI) from business travel of any region within Asia Pacific.
The individual country with the highest return from business travel is Singapore. The findings show the importance of face to face meetings in doing business in the Asia.
Adam Sacks, Managing Director, Oxford Economics, launched new research on business travel in Asia, on behalf of WTTC, which revealed:
- Across Asia Pacific, businesses from Southeast Asia have the highest ROI from business travel. This is driven particularly by the high proportion of international travel from the region.
- Within Asia Pacific, Singapore and China yield the higher ROI of business travel. The findings demonstrate that $1 invested in business travel would yield a return of $15.7 and $13.8 for Singapore and China, respectively.
- On average, executives report that 29% of their company’s new sales depend on business travel, and China reports the largest proportion of sales which are dependent on business travel at 38%.
- Business travelers on average estimate that 38% of their customers would switch to a competitor without in-person meetings. In fact, these responses were remarkably stable across the different countries surveyed, but personal meetings seem most important in China.
- Compared to other world regions, Asia Pacific would suffer greatest in terms of GDP loss. If Asia was to drop its business travel by 25% over 2 years, this would result in a 5.7% of GDP loss over 5 years.
- The same is also true for employment. With the same scenario, the region would experience a loss of 2.5% of employment over 5 years.
David Scowsill, President&CEO, WTTC, said: “The findings demonstrate that Singapore has got the highest ROI in Southeast Asia, which is clearly underlined by the TravelRave week and the event today. Hosting such important events creates synergies across diverse travel and tourism sectors by gathering industry leaders who share best practices, expand business networks, and set the stage for collaboration to leverage and sustain Asian’s tourism growth.”
Adam Sacks, Managing Director, Oxford Economics, stated: “On a global basis, the analysis was conclusive that company performance is directly tied to business travel. For Asia, the relationship was particularly striking as the region seems to place a premium on face-to-face meetings. The importance of international trade to Asia makes business travel all the more crucial, creating business links across borders, cultures, and languages.”
The Asian business travel research is based on an earlier report, “Business Travel: A Catalyst for Economic Performance” by WTTC that was launched at WTTC’s Global Summit in Las Vegas, US, in May this year.
Key findings from the report show:
- Growth in business travel from 2000-2007 helped create over 40 million jobs through increases in trade and productivity, representing 20% of the growth in global employment over the same period.
- Global business travelers believe that 50% of their prospective customers are converted to new customers with an in-person meeting compared with 31% without such a meeting.
- If business travel were cut by 25% for two consecutive years, global GDP would be 5% lower than would otherwise be the case after a 5-year period resulting in 30 million fewer jobs than forecast under baseline assumptions for the same period – an average loss of 1% 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.
David concluded: “Our findings substantiate that business travel not only helps company profitability; it also grows economies, raises incomes, and creates jobs. This evidence should make CEOs aware of the substantial risks that they run when they cut back in this important segment. I urge business leaders and policy makers to consider the implications of these findings and to put business travel back on the corporate agenda.”
The research was conducted by surveying 500 global business travelers (in Brazil, China, Germany, UK, and the USA) and through an economic research analysis covering 190 countries.
It was sponsored by American Express Company, Singapore Tourism Board, Las Vegas Convention&Visitors Authority, and the US Travel Association.