Business travel has been under scrutiny as firms responding to weaker profits targeted travel as an immediate cost-cutting area. Here are some corporate-travel trends we can expect in 2011.

In 2009, research firm Oxford Economics established the first clear link between business travel and business growth, showing that for every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits.

In tough economic times, however, many business executives have an understandable short-term focus on managing costs. As companies have carefully watched their budgets over the past year, many have been reluctant to send their employees on planes, trains and automobiles.

Last year, at least 30 percent of companies cut back on business travel, according to a recent CareerBuilder.com survey of more than 2,400 U.S. employers and 3,900 U.S. workers. Of those companies, more than one-third (37 percent) said the cutback negatively affected their business.

When asked how the cutbacks in business trips affected their bottom line, companies cited less effective internal communication (12 percent), fewer sales (11 percent), less effective execution on internal business initiatives (10 percent) and less customer loyalty (8 percent).

According to Oxford Economics’ analysis, which covered 14 economic sectors over a span of 13 years, the average business in the U.S. would forfeit 17 percent of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover.

In fact, according to Oxford Economics’ landmark study, both executives and business travelers estimate that 28 percent of current business would be lost without in-person meetings. About 40 percent of prospective customers are converted to new customers through an in-person meeting, compared with 16 percent without such a meeting. Executives cited customer meetings as having the greatest returns — approximately $15-$19.99 per dollar invested — with conference and tradeshow participation returns ranging from $4-$5.99 per dollar invested.

“Business travel is an important part of many companies’ operations, as it lets them stay connected with clients and employees across the globe,” Rosemary Haefner, vice president of human resources for CareerBuilder, recently said. “Some companies are revisiting their policies, though, to ensure they’re maximizing the effectiveness of their business travel initiatives.”

In addition to keeping a close eye on travel frequency, companies have also placed specific restrictions on business travel for employees since the recession, asking them to fly coach, lowering entertainment budgets and having them only travel domestically.

In a recent survey of 1,001 business travelers, Deloitte found that 72 percent of respondents have monitored their business travel expenses in various ways over the past year. In particular, business travelers said they have had to cut back on overall travel costs (37 percent), reduced the duration of their trips (33 percent) or spent less on food/restaurants (32 percent). More than one in five (21 percent) booked less-expensive hotel rooms.

Web conferencing is another way companies are keeping business travel budgets in check. According to CareerBuilder’s findings, 42 percent of companies rely more on phone and Web conferencing now to conduct business with clients, with 31 percent saying they get just as much out of virtual meetings as face-to-face meetings. In Deloitte’s survey, nearly a quarter of companies said they now look to schedule conference calls or video-conferencing in lieu of traveling.

Moreover, Deloitte found that nearly three out of five (59 percent) respondents whose companies have corporate travel policies feel the rules are now more strictly enforced. Among the top five guidelines noted by respondents, pre-trip approval for business travel (50 percent) was the highest priority. Among hotel-related guidelines, 42 percent of business travelers said their company currently covers booking accommodations in advance, and 32 percent said they have spending limits for accommodations.

The economic climate over the past few years has had a dramatic effect on work-related travel, yet as the economy continues its upward climb and companies look to build on their current customer base, business travel may soon pick up.

The majority of companies (77 percent) surveyed by CareerBuilder expect 2011 business travel levels to stay the same as last year, while 11 percent told CareerBuilder their companies will take more business trips this year. Approximately 13 percent expect business travel to decrease.

Deloitte’s findings are more optimistic, indicating that business travelers anticipate an increase in corporate travel for 2011.

By the end of this year, 80 percent of business travelers expect to take more or the same number of business trips than they did in 2010, with a similar number (79 percent) expecting to also spend more or the same.

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Resources

Business Travel ROI – Research Shows Benefits of Travel to Business’ Bottom Line
Oxford Economics/U.S. Travel Association, September 2009

The Return on Investment of U.S. Business Travel
Oxford Economics/U.S. Travel Association, September 2009

…Companies Report that Less Business Travel has Adversely Affected Their Business…
CareerBuilder.com, Feb. 16, 2011

Business Travelers Anticipate Uptick of Trips in 2011
Deloitte, Nov. 9, 2010

Global Business Travel Forecast
American Express Business Travel, Oct. 20, 2010

The Economic Significance of Meetings to the U.S. Economy
PricewaterhouseCooperss LLP/Convention Industry Council, Feb. 17, 2011

Business Travel 50
Inc.com, 2010