A quarter of U.S. business travelers combine business and leisure, according to new research. A U.S. highway in Pennsylvania. Montgomery County Planning Commission / Flickr
Skift Take: It can be easy to forget that most U.S. business travelers aren't road-warriors hitting multiple cities in a week. Sometimes we fixate too much on those who travel the most instead of the majority, who spend a day or two visiting clients or potential customers.
— Andrew Sheivachman
It’s easy to picture a U.S. business traveler as a grizzled road-warrior crossing the country for days at a time, looking for business in cities across the country.
A research report from the Global Business Travel Association and American Express Global Business Travel, conducted by Rockport Analytics, paints a different picture: short trips, often by car, to visit clients in nearby cities.
Overall, the report shows that domestic U.S. business travel isn’t growing much despite a relatively strong economy.
Business travel revenue represented three percent of U.S. gross domestic product in 2016, totaling $424 billion. Trip volume grew 1.2 percent in 2016 while spending dipped slightly on a per trip basis, falling 1.1 percent.
The state of business travel remains strong in the U.S., even if growth has remained somewhat stagnant, when compared to the past.
“I think back to 10 years ago to when travel was dead, and travel management companies were going to die; there wasn’t a business model there anymore and today I think nothing is further from the truth,” said David Reimer, senior vice president and general manager of the Americas for American Express Global Business Travel.
“If you look at the almost 515 million domestic business trips and you add in 5.5 million international business trips, you start to wrap your head around the size of this business and what that contributes to the economy. The piece that hasn’t changed is that the pie is relatively flat, or growing at slow pace, but what you are seeing is people getting more bang for their buck. Fundamentally to get business there’s nothing like meeting face-to-face and looking someone in the eye.”
Here are three takeaways from the report on the behavior and habits of business travelers.
Business Travel Spend Dropped in 2016
While U.S. business travel volume grew slightly in 2016, total spending by business travelers dropped 2.2 percent to $520 per trip.
“The average spend per trip included $163 on lodging, $180 on transportation, $94 on food and beverage in restaurants, $33 on entertainment, and $50 on shopping and merchandise,” according to the report.
Transient business purposes accounted for 48 percent of business trips, while group travel totaled 28 percent and 25 percent were a combination of business and leisure.
Interestingly, meetings operation expenditure represents 38.1 percent of total business travel spending, showing an opportunity for businesses to continue to look for savings.
“Companies benefit from working with travel management companies and you can start layering in better data and complexity to allow companies to stretch their dollar further,” said Reimer. “You’ve seen an incredible amount of industry competition among airlines and hotel heading that way as well. You’re essentially getting better product across the board at more competitive rates than you got historically. What that means is companies are able to get people out in front of their customers and grow their business in a more regular fashion.”
Most Biz Travelers Don’t Use Uber
|Modes of Transportation Used|
More business travelers drive to their destination than fly, and nearly twice as many rent a car than use a ridesharing service. Taxi cabs, in fact, were used more often than ridesharing services.
“You look at the geography of the U.S. and you’ve got professionals across the major hubs and territory managers; the road trip comes into play if you need to travel two or three hours,” said Reimer. “Does it make sense to jump on a plane, or can it be more efficient to jump in a car? It comes down to putting as many people as you can where you’re customer base is.”
The Average Trip Is Short
|Length of Stay Among U.S. Biz Travel Trips|
The domestic U.S. business trip tends to be short, according to the research, with most traveling for the day or a couple nights.
“It is an interesting insight that you have people traveling in their own areas and they aren’t spreading themselves broadly,” said Reimer. “[The challenge for travel management companies is] how can you deliver a better experience?”