GBTA Upbeat Despite Unsteady Business Travel Sentiment

The Global Business Travel Association held its annual convention in Denver last week, hosting 5,375 industry professionals from 52 countries for the event. The organization ran 95 education sessions and held specialized meet-ups for buyers as well as media presentations for supplier members. Mainstage sessions featured keynote speakers on leadership and the global economy as well as artificial intelligence, innovation and business transformation. Just prior to the event, CEO Suzanne Neufang sat down with BTN VP of content Elizabeth West to discuss the business travel return on investment, the realities of the business travel outlook in the face of trade and economic uncertainty as well as how GBTA and other organizations continue to advocate for travel across the board. The following is an edited transcript of that conversation.

BTN: The GBTA Convention in Denver is just a few days away. What are you anticipating, and what’s different this year than in past years?

Suzanne Neufang: The trade show floor is bigger than it's been since the Covid pandemic—at least in my stint—and has surpassed last year's numbers in terms of exhibitors. The Denver Convention Center is just a great place to host the event. The center itself gave us some opportunities for first-time [programming] so we were excited about that. Attendance is great. I think we're we're hitting some new highs again post-Covid, and maybe the key thing we thought might impact us hasn’t. We don’t see a decrease in government-related attendees, which was really in question this year. We also did not seem to be widely affected by [a decrease of] international inbound attendees. Those were things we’ve been tracking pretty carefully, but the optimism seems good.

BTN: GBTA released research just prior to the event about the Business Travel Return on Investment, finding that in the U.S. $1 of business travel drives more than $14 of revenue on average for businesses. It’s a tricky calculation, how does GBTA approach that kind of research?

Neufang: The first dilemma is accessing publicly available data that gives us a macro lens to be able to create a model that we can fine tune. But in the U.S. there’s generally good data that allows us to attach business travel spend related to sales and revenue numbers across several industries. There is a lot more nuance in the methodology. Chris, what would you add to that?

Chris Ely (GBTA research director): Sure. The key challenge is that we are trying to model the marginal impact business travel has on revenue for companies across the U.S. We want to boil it down to some of the basic factors of supply and demand in a given industry. … so we build a regression model to understand how one variable influences another, so in this case we strip out other factors like marketing, advertising things like that to isolate the impact of business travel.

BTN: You also found that there’s an optimal threshold for business travel, but most industries are falling short of that optimal point where they would maximize the return of the business travel investment.

Neufang: Yes, we found there’s still room—even if you factor in the virtual meeting component—for more investment in travel. Virtual has eased the travel burden a bit, but it doesn’t replace necessary customer servicing and other things related to the selling and delivery of goods and services. In the U.S. specifically, businesses on average could increase their travel budgets by about 8 percent to see a 6 percent increase in sales. That 8 percent equates to about $184 per employee, so it’s not that much when you think about it. That’s not to say any additional investment should be evenly invested in each employee, but it’s a way of looking at the potential investment that puts it in perspective.

BTN: There’s other industry research—and I’m thinking specifically of Scott Gillespie’s work—that has suggested 30 percent of business trips are low value and could be jettisoned without impacting business returns. Does this research respond to that?

Neufang: Our research does not point to that, but it also was not designed to answer that question. But the simple answer to your question is, ‘no.’ I would say, however, that the companies for the last 10 years or more have been getting better at realizing which trips are productive trips. There’s another factor, however, that companies should be looking at that is harder to attach to ROI, but it’s employee retention and education. Some trips have to do with talent becoming more talented or getting trained or learning from experts, and there’s an investment in a company’s human resources that will indirectly contribute to sales because you are building better teams to support the business. Our current research does not quantify that, but those are important business and social science questions we’d love to dive into if we had unlimited budgets and time.

BTN: I feel like those questions of investment in people and the future-building of the business travel investment brings up another line of research GBTA has been exploring—and that’s the forward-looking sentiment around travel volumes. The latest survey found that sentiment is trending down in the face of trade uncertainty and some other government moves, particularly in the U.S. that have de-stabilized the business travel outlook for large number of companies.

Neufang: About one-third of buyers are saying they expect a decrease in spend and volume year over year. We are seeing there may be a stabilizing right now in that overall uncertainty, but it’s stabilizing at considerably lower expectations than what we saw coming into this year. I also think consumer confidence, in general, has much to do with where we are as a travel industry writ large than CFO-related travel budgets. And what we’ve also seen is that when there is trade uncertainty, businesses have to find new customers and trade partners and supply chains. So what we did ask specifically this time is whether there is different travel happening as companies find those new trade opportunities. That may be driving more travel—at least in the short term.

BTN: We have seen similar results in BTN research. What we have not seen are across-the-board directives telling employees not to travel; we haven’t seen big policy changes in travel. What has GBTA found in that respect?

Neufang: Government employees in the U.S. did experience broad-reaching changes like you describe, and I do think there was some trickle-down into other industry. But we’re not seeing real cessation of business travel to any large degree. We haven’t specifically asked why, but I think that despite some cultural amnesia that we all have around Covid, our industry still has a muscle memory about it and CFOs may have a muscle memory about how hard it was to start things up again—the HR component, the security and risk. It’s harder to stop and then get the wheel turning again than to let the wheel gently keep going. Maybe not quite as fast, but keep it going. On the other hand, many companies are still in big growth cycles and we shouldn’t discount the impact of that. Those companies are definitely not slowing travel even with uncertainty. They are going after big sales in ways that are more focused on their product launches and lifecycles than on anything else happening in the economy around them.

BTN: Meetings and events were another area where companies were looking at some real changes—particularly with plans to bring their events to the U.S. About 15 percent to 20 percent were reconsidering their plans in some way.

Neufang: It’s a real concern, and directionally it looks a bit worse than what we saw in the original sentiment survey in April. Meetings get planned months and sometimes years in advance. So what we’re seeing now is that maybe over the last three months there’s actually been more corporates looking at “can we move it? Do we want to send fewer people? How are we doing this?” And it’s not just international; it’s also U.S. companies that are making changes—and considering their broader attendee mix and whether holding an event in the U.S. could impact attendance.  

BTN: Canadian business was particularly concerning.

Neufang: That response has been very consistent—the initial response and the response today. We have fewer respondents in that data set but we are confident in those numbers as they also reflect what we continue to hear anecdotally.

BTN: What is GBTA and the broader industry doing in terms of advocacy and work to counteract perceptions and uncertainty about travel and meetings in the U.S.?

Neufang: We’re consistent with our platform and policy statements … and I think it’s well received by members of Congress and their staffs. We are pleased to see that there’s investment in the air traffic control system that has been on our list forever—it’s one area where we see agreement whether we are talking to “Rs” or “Ds”. That said, we are still in last year’s review of the research Chris and his team did on the U.S. economic impact of business travel. It’s a super valuable document for us to deliver to each Congressional office … that business travel coming into communities is a tax driver and it’s different from tourism in terms of the impact it has on local economies.

We’re consistently there and we’re also looking for new opportunities, like in Brussels, where it’s even a broader remit for us—not just economic but also other policy-driven issues like multimodal connection for business travel. We are involved there on a more daily basis and policymakers are really interested in what we are doing. No matter where our advocacy activities are focused, though, the education never stops.