Archive for July, 2014
Wednesday, July 30th, 2014
Travel is just part of business for many companies. In industries where crews must be sent to the site to carry out their work, choosing to not travel is simply not an option. For many companies there are alternatives, such as online meetings and video conferencing. However, recent studies suggest that even when alternatives to direct travel are available, they may not be the best option.
A recent study by Oxford Economics clearly indicated that business travel directly leads to an increase in both corporate revenue and profits. The study found that every dollar invested in business travel results in $12.50 in added revenues and $3.80 in new profits.
“This shows that companies need to appreciate the effects of certain types of cost cutting,” says Adam Sacks, managing director of Oxford Economics USA. “The research informs us that when a company reduces its travel budget, it loses both revenue and profits, giving competitors a real advantage.”
The study indicates that if a company eliminated its business travel, corporate profits would drop 17 percent in the first year.
With budgets tighter, a greater emphasis is being placed on measuring the impact of meetings. “There is no reason to have a meeting unless you want the audience to do something differently – sell more, learn more, do more,” Beauchine says. “If you can’t measure whether the meeting led to new action, you will be unlikely to get the same budget again.”
Increasing evidence is mounting about the types of situations that are most effectively handled face-to-face. Group processes and outcomes that require coordination, consensus, timing and persuasion of others are better accomplished up close and personal. Some studies have found face-to-face meetings were most effective for negotiating important contracts and understanding and listening to important customers. Anything with new customers, closing sales, and improving the top line is still best done face-to-face.
When the option is available, travel budgets have historically been one of the first things to get cut when companies begin looking at ways to save money. However, with increasing evidence that travel related budget cuts have such a strong impact on the bottom line, many companies are looking for ways to continue traveling while reducing travel costs. Whether travel is mandatory for your company or you simply do not want to risk losing up to 17% in profits, CLC Lodging can help mitigate the cost and consequently some of the pain points associated with business related travel.