What value do work trips create for business travellers?
26 May, 2016
Travelling can be time-consuming and stressful, so we should make sure get as much out every business trip as possible. But how can we measure the effectiveness of these journeys?
In 2014,our analysts at CWT Solutions Groupinvestigated the ROI from the traveller’s point-of-view, based on awide-scale traveller survey of 10,000 respondents to find out what makes a successful business trip, and whether unsuccessful ones can be avoided.
Understanding the value of business travel and its return on investment (ROI) is of huge importance to the travel industry, but estimating the ROI for a business trip can a tricky and daunting prospect.
Based on the survey findings we found that the
main reasons for travel were:
How do you define a successful trip?
Once we pin-pointed the reasons for travelling, we measured the success of the business trips by asking travellers how useful their last one was on a scale from 1 to 5, with 5 being the most successful. We found that 88% of the trips were judged useful by travellers, achieving a rating of 4 or 5.
To further understand what made a trip valuable to the travellers, we asked what they thought were thebest outcomes for a business trip.
For the investment part of ROI, we needed to consider the productivity loss generated by travel stress along with the actual expenses. For the return aspect, it can be trickier to quantify the value of a trip or understand what makes a trip succeed or fail, so this research addressed those particular challenges.
What makes a business trip unsuccessful?
Upon investigation, travellers reported thatwhen a meeting is unsuccessful, it is primarily due to alack of preparation(40%) orlack of a clear agenda(16%).
Other reasons given by respondents included:
· Trip’s costs in relation to its benefits (10%)
· Lack of participation (10%)
· Lack of an action plan (6%)
· Too many participants (5%)
· Not reaching set goals (4%)
After learningwhat travellers expect from business meetings, we measured the success of a business trip taking these factors into consideration and found that:
· 88% of trips are perceived as successful
with a score of 4 or 5 out of 5
· 9.5% of trips have an average outcome, scoring 3 out of 5
· 2.5% of trips are seen as not useful (achieving scores of 1 to 2,
indicating that the return on the time and financial investments are
outweighed by the total cost of the trip, including travel stress.
Can lower results be anticipated before the trip?
For the trips showing average and below-average returns we asked travellers if these low results had been expected before the trip.We found that on the lowest-rated trips, a low return had been anticipated by 68% of the travellers. For trips rated 2 or 3, the low return had been predicted by 56% and 43% of the travellers, respectively.
This shows that a sizeable fraction of travellers had foreseen the low results prior to the trip and the lower the success of a trip, the more likely it is for the traveller to have anticipated it. These findings indicatethere is an element of predictability to failure.
Number of meetings and length of stay
If the return on a given trip is the sum of the returns of the meetings which took place during that trip, thenmore meetings will generate more valueandimplicitly fewer failed trips.
There are two factors which make the length of stay relevant for business success. The first one is that during a longer trip a traveller is able to fit more meetings and thus derive more value. The second factor is advance booking: longer trips tend to be booked earlier, and somore time is available to travellers for meeting planningand preparation.
Benefit of advance booking
Advance booking also has a strong impact on the probability of a bad trip.The further a business trip is booked in advance, the less likely it is to fail.Early planning allows travellers sufficient time for travellers to book their trips and arrange their meetings and, as a result, they can maximise their time in the chosen destination.
Does the type of travel affect failure rates?
We measured the failure rates for the three main trip types: domestic, continental and intercontinental. Our results found that theprobability of having an unsuccessful trip is the highest for domestic travel(14%).
For continental and intercontinental trips this probability is drops to 12% and 9%, respectively. Thisdecrease is explained by the fact that international trips are typically longer and booked earlier, so meetings can be better arranged and prepared.
What is the potential financial impact of failed trips to the organisation?
To assess the financial impact of unsuccessful trips, we took the case of a company with 1,000 travellers taking a total of 5,000 air trips annually:
Assuming an average cost of $1,000 per tripcovering air ticket and hotel accommodation charges, the total travel spend is $5,000,000.
Based on the 12% of unsuccessful tripsas defined by those trips scored between 1 and 3 out of 5this represents $600,000, assuming they account for a proportional amount of travel spend.
So how can business travellers can get more from their work trips?
· Increase the number of meetings attended during the trip.
Our study found that more meetings attended while travelling for
work generates greater value for those travelling. Each additional
meeting reduces the probability of an
unsuccessful trip by roughly 10%.
· Spend more time catching up with your contacts.The duration
of meetings also affects the probability of an unsuccessful trip.
Less time in meetings increases the likelihood of an
· Make sure the trip will be worthwhile. Domestic travel has
a greater probability of being unsuccessful than continental
or intercontinental trips
And what steps can we take to prevent unsuccessful business travel?
· Plan ahead to ensure that travellers get more benefit
out of their trips
· Arrange longer stayswith more meetings planned to
maximise the valueof the journey
· Book further in advance to allow formore itinerary planning andbenefit from greater cost savings