The United States Business Travel Industry 2014 (Select Pages)2. 22
The United States Business Travel Industry
February
2014
© February 2014 GBTA and its affiliates. All rights reserved. Members may copy this publication in its entirety
for internal company use.
The United States Business Travel Industry
Road Warriors Impact on Jobs and the Economy
Table of Contents
INTRODUCTION....................................................................................................................................................................................3
CONTACT................................................................................................................................................................................................3
EXECUTIVE SUMMARY......................................................................................................................................................................4
WHAT MAKES U.S. ROAD WARRIORS TICK: A PROFILE OF U.S. BUSINESS TRAVELERS ............................................6
OVERVIEW..............................................................................................................................................................................................6
THE TOP LINE: PERSON-STAYS & SPENDING .........................................................................................................................................7
TRIP MOTIVATION, PURPOSE, AND BEHAVIOR........................................................................................................................................8
MOST ACTIVE TRIP DESTINATIONS AND ORIGINS.................................................................................................................................10
BUSINESS TRAVEL BY MODE OF TRANSPORTATION AND TRIP DISTANCE.............................................................................................11
AVERAGE SPENDING BY TRIP PURPOSE ................................................................................................................................................12
ACCOMMODATIONS AND BOOKING METHOD .......................................................................................................................................13
U.S. BUSINESS TRAVELER DEMOGRAPHICS..........................................................................................................................................14
THE 2012 ECONOMIC CONTRIBUTION OF U.S. BUSINESS TRAVEL....................................................................................15
BUSINESS TRAVEL-INITIATED TRIPS AND SPENDING ............................................................................................................................15
HOW BUSINESSES, CITIZENS, AND GOVERNMENTS BENEFIT FROM BUSINESS TRAVEL: CONTRIBUTION TO U.S. GDP, JOBS, WAGES,
AND TAXES ...........................................................................................................................................................................................20
A BROAD RANGE OF U.S. BUSINESSES BENEFIT WHEN WARRIORS HIT THE ROAD .............................................................................23
WHAT IS LOST WHEN BUSINESS TRAVEL IS REDUCED .........................................................................................................................25
TRAVEL’S CONTRIBUTION TO U.S. BUSINESS –REVISITING THE LANDMARK 2011 STUDY ON THE ROI OF U.S.
BUSINESS TRAVEL.............................................................................................................................................................................29
BUSINESS TRAVEL’S CONTRIBUTION TO TOP & BOTTOM LINES...........................................................................................................29
BUSINESS TRAVEL’S CONTRIBUTION TO U.S. EXPORTS........................................................................................................................31
ABOUT ROCKPORT ANALYTICS...................................................................................................................................................33
3. 33
The United States Business Travel Industry
February
2014
© February 2014 GBTA and its affiliates. All rights reserved. Members may copy this publication in its entirety
for internal company use.
Introduction
Business travel in the U.S. is a significant industry, totaling $384
billion in spending in 2012. When businesses send workers on
the road, jobs are created, sales and taxes are generated and the
national economy grows.
The focus of this study is to quantify the economic contribution
made by business travel to the overall U.S. economy. To achieve
this, we estimated total annual spending initiated by business
travel in 2012 (most recent full year data available) and used a
standard economic model to translate that spending into GDP,
jobs, wages, and taxes. The study also sought to profile U.S.
business travelers in a number of key areas in order to better
understand their behavior, motivations, and spending patterns.
The total economic impact of business travelers is separated into
three distinct effects: direct, indirect, and induced. The direct
impacts represent the spending that “touches” the traveler.
Among other costs, this includes airfare, hotels and car rentals.
The indirect impact represents the benefit to local suppliers to
those businesses that are directly serving the travelers. This
includes, for example, food suppliers to restaurants. The induced
impact adds the effect of travel‐generated wages as they are spent
throughout the U.S. economy.
Contact
For more information or specific questions, please contact:
Kenneth McGill
Managing Director
Rockport Analytics
610‐213‐2558
ken.mcgill@rockportanalytics.com
Joe Bates
Vice President, Research
GBTA Foundation
703‐236‐1181
jbates@gbtafoundation.org
Methodology Notes:
The economic impacts described
in this study are based on
domestic traveler spending as
reported by D.K. Shifflet &
Associates (DKSA), international
spending reported by the National
Travel & Tourism Office (NTTO),
and meeting spending derived
from a Convention Industry
Council (CIC) study.
The most recent full year data
(2012) for all inputs was analyzed
and compared to other economic
data for the same period. This
data is fully consistent with the
travel spending estimates
released each quarter in the GBTA
BTI™ Outlook – United States.
Expected growth in business
travel activity of 3.8% and 6.6%
for 2013 and 2014, respectively,
suggests that the findings in this
study have continued to expand.
Only spending that took place
within the United States was
included since it is only this
portion that ultimately accrues to
U.S. Gross Domestic Product.
Study findings include only the
impacts of business‐initiated
travel and meetings. Leisure
travel was not included.
An economic model of the United
States is critical to estimating how
traveler spending resounds
through the U.S. economy. The
IMPLAN model, a non‐proprietary
economic model that has fast
become the defacto standard for
most economic impact
assessments in the United States,
was chosen by the authors.
4. 44
The United States Business Travel Industry
February
2014
© February 2014 GBTA and its affiliates. All rights reserved. Members may copy this publication in its entirety
for internal company use.
Executive Summary
Business travel supports a broad array of business objectives. Of the 452 million business trips
taken in the U.S. during 2012, nearly two‐thirds (65%) were for transient purposes such as
operations management, sales, client service, government and military travel, and travel for
construction or repair. The other one‐third of business trips were taken for group travel
purposes, including travel for conventions, training, professional development, and seminars.
U.S. business travelers are most likely to be mid‐career (age 35‐55) and be employed in a
managerial or professional position. Business travelers have an average annual household
income of $102,329 and almost three‐quarters of business travelers are married.
In 2012, U.S. domestic business travelers spent an average of $540 per trip, including $147
on lodging, $230 on transportation, $100 on food and beverage, $28 on shopping, and $22 on
entertainment. These averages consider all trips –day and overnight and all methods of
transportation –air, rail, personal auto and rental car. Business trips that utilized air travel as
the primary mode of transportation averaged $1,100 in total spending per trip.
In 2012, top U.S. business travel markets were New York, Los Angeles, Chicago, Boston, and
Dallas. Out of the top‐25 business travel origin markets, average spending skewed highest in
Houston, Washington DC, New York and Atlanta.
The average business trip lasts 1.75 days and covers 268 miles (945 miles if primary
transportation is by air). The typical U.S. business traveler takes about 4 day and 2 overnight
trips per month. Over the course of a year,
a road warrior on average spends 19
nights in a hotel.
In 2012, business travel spending
within the United States totaled $384
billion USD. This was comprised of $244
billion in trip‐related spending (60%) and
$140 billion in meetings operations
expenditures.
International inbound trip spending
was estimated at over $19 billion in
2012, with over $8.3 billion of that taking
place within the U.S. International
outbound travelers spent a total of $32
billion in 2012, $6.2 billion of which took
place within the U.S.
Business travel in the U.S. contributed
$491 billion to U.S. GDP in 2012.
Essentially, every dollar of business travel
spending generated about $1.28 in GDP.
Business travel was responsible for about 3% of U.S. GDP in 2012. Of the $491 billion total,
$208 billion accrued directly to businesses that served travelers or meeting attendees. The supply
Stakeholder/
Beneficiary
2012 Benefit
Business
Travel
Industry
$384 billion in travel & meetings
spending
4 million industry jobs
$208 billion in revenue (GDP)
U.S Economy
$491 billion in total GDP (3% of
total U.S. GDP)
Jobs
7.1 million total jobs supported
$297 billion in wages & salaries
Businesses
Potential 20:1 ROI from increased
Travel &Entertainment spending
Taxes
$118 billion in taxes ‐$62 billion
federal and $56 billion in state &
local receipts
5. 55
The United States Business Travel Industry
February
2014
© February 2014 GBTA and its affiliates. All rights reserved. Members may copy this publication in its entirety
for internal company use.
chain for these businesses received an additional indirect contribution of $120.5 billion. Finally,
the downstream spending of business‐travel supported wages generated an induced contribution
of $162.8 billion.
In 2012, business travel supported 7.1 million jobs in the U.S. Just short of 4 million of those
were with hotels, airlines, rental car companies, and other direct providers of travel services.
About 1.3 million were with travel supply chain employers and about 1.9 million more resided
with firms that supplied consumer goods and services to business travel‐supported workers.
U.S business travel contributed significantly to federal, state, and local tax receipts ‐$118
billion in total. In 2012, business travel‐initiated federal taxes totaled $62 billion. Meanwhile,
state and local taxes attributable to business travel surpassed $56 billion. Of each dollar spent on
business travel, about 30₵ goes to taxes.
For every one percent increase in business travel spending, the U.S. economy gains an additional
71,000 jobs, nearly $5 billion in GDP, $3 billion in wages, and $1.2 billion more in tax
collections.
The United States Congress continues to examine reform of the corporate tax system. Proposals to
reduce U.S. corporate tax rates, among the highest in the world, have included strategies to close
certain loopholes and eliminate a list of existing deductions –including the deduction of travel and
expenses (T&E). Eliminating the T&E deduction would effectively raise the cost of business
travel by 35%, the current U.S. corporate tax rate. This would be expected to reduce business
trips by anywhere from a 9% to 18%; at the low end, this would be about 40 million trips.
This translates into $22 billion in lost travel spending, which would result in the loss of 418,000
U.S. travel sector jobs, $28 billion in GDP, and $6.8 billion in tax revenue.