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The United States Business Travel Industry
Road Warriors Impact on Jobs and the Economy
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 
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.
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
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.

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The United States Business Travel Industry 2014 (Select Pages)

  • 1. Sponsored by: 2013 Q1 February 2014 The United States Business Travel Industry Road Warriors Impact on Jobs and the Economy
  • 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.