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Business Travel Responsible for $547 Billion in U.S. GDP in 2016, Creates Over 7.4 Million Jobs

July 19, 2017 Business News No Comments Email Email

A new report issued today at GBTA Convention 2017 by the GBTA Foundation, the education and research arm of the Global Business Travel Association, in partnership with American Express Global Business Travel (GBT), highlights the positive economic impact business travel has on the nation’s economy. The study, titled ‘The U.S. Business Travel Economic Impact Report,’ reveals business travel was responsible for about 3 percent ($547 billion) of U.S. GDP in 2016. Additionally, the research found that for every 1 percent change in business travel spending, the U.S. economy gains or loses 74,000 jobs, $5.5 billion in GDP, $3.3 billion in wages and $1.3 billion in taxes.

The economic impact study found that in 2016, the nation’s businesses spent $424 billion to send travelers out on the road for 514.4 million domestic business trips. The business travel industry supports 7.4 million jobs and generated $135 billion in federal, state and local taxes. Much of business travel’s contribution to the economy accrues directly to industries that serve business travelers, but their supply chain beneficiaries received an additional indirect contribution of $132 billion.

“Business travel matters – it is a critical driver of the economy,” said Michael W. McCormick, GBTA Executive Director and COO. “In a time where many policies have created uncertainty and disruption around travel, this study shows the importance of enacting pro-travel polices to our nation’s bottom line.”

“The way that people and companies conduct business has undergone transformative, digitally-led changes in the past 20 years. Yet, the U.S. Business Travel Economic Impact Report shows that face to face interaction enabled by business travel remains a critical business tool,” said David Reimer, Senior Vice President and General Manager, North America, American Express Global Business Travel. “Today’s modern business travelers want access to all content, to the best personalized rates and fares, and via consumerized channels. To sustain business travel’s economic impact, our industry must continue to evolve to meet the needs of these travelers.”

Breaking Down the Business Trip

In 2016, the average amount spent per business fell 2.2 percent to $520, including $163 on lodging, $180 on transportation, $94 on food and beverages in restaurants, $33 on entertainment and $50 on shopping and merchandise. These averages include both domestic and international inbound trips, as well as both day and overnight trips.

Roughly half (48 percent) of U.S. business trips were taken for transient purposes (sales trips, client services, government and military travel and travel for construction or repair), while 28 percent were taken for group travel purposes. The remaining 25 percent of trips were taken for a combination of business and leisure. Three-quarters of the business trips taken in the United States in the last year included an overnight stay. Nearly 40 percent of business trips included a 1-2 night stay, 22 percent included a 3-4 night stay and 14 percent included stays of 5+ nights.

A personal car or truck (35 percent) was the most popular mode of transportation among U.S. business travelers in 2016, followed by airplane (28 percent) and rental cars (13 percent). The largest share of business travel stays was in traditional hotels (42 percent) with 18 percent staying in other accommodations, including sharing economy properties, their own second home or B&Bs.

Popular Business Destinations

Domestic business travel accounted for approximately 94 percent of total trip-oriented business travel spending in the United States in 2016. Not surprisingly the majority of business trips were taken to destinations with higher population densities and states with large business centers. This includes states in the Pacific region, those in the Northwest and Southeast as well as Central and Mountain states like Illinois, Michigan, Texas and Colorado.

Defining The Modern Business Traveler

U.S. business travelers have an average household income of just over $82,000 and more than 60 percent are men. Just over one-third of U.S. business travelers have obtained a bachelor’s degree, while just less than one-third have a graduate or professional degree. They are well distributed across age cohorts – roughly half are under the age of 45 with the other half over the age of 45, and nearly 60 percent are married.

 

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