A new study, conducted by global research firm Oxford Economics, is said to establish a clear link between business travel and business growth.

The results show a strong relationship between a company's investment in business travel -- to meetings, trade shows, conferences, incentive and sales meetings -- and its profitability.

For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits, according to the findings. It is the first time that the return on investment (ROI) of business travel has been successfully measured, the researchers believe.

The Oxford Economics study found that curbing business travel can have a significant negative impact on corporate profits. The average business in the U.S. forfeits 17% of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover, the researchers stated.

The study comes on the heels of NEXA Advisor's study confirming the link between the use of business jets and corporate profits. Commentary: New NEXA Study Confirms Competitive Advantage of Biz Aircraft

More than half of the road warriors surveyed said 5-20% of their company's new customers were the result of trade show participation. And company executives estimate that 28% of current business would be lost without face-to-face meetings. These results further underline and reinforces the validity of in-person meetings, the researchers concluded.

Business travel in the U.S. is responsible for $246 billion in spending and 2.3 million American jobs; $100 billion of this spending and nearly 1 million U.S. jobs are linked directly to meetings and events, according to the U.S. Travel Association. The aviation industry contributes $1.3 trillion to the U.S. economy.General aviation accounts for 1,265,000 jobs and a $150 billion contribution to the economy annually, according to a new tool calculating the benefits of the business and general aviation segments of the industry. Economic Impact of GA Tallied, Senate Gets GA Coalition

In the first six months of 2009, business travel in the U.S. was down by 12.5%. A 10% increase in business travel spending would increase multi-factor productivity, leading to a U.S. GDP increase between 1.5 and 2.8%, the researchers believe.

"In tough economic times, many business executives have an understandable short-run focus on managing costs. The report points out the less visible -- but significant -- long-term benefits resulting from business travel, such as partnership building and new business opportunities," said Dr. Martin A. Asher, adjunct professor of finance at the Wharton School. "Increased business travel in this economy can actually increase sales and reduce the financial decline companies might otherwise suffer."

The Oxford Economics Business Travel study was sponsored in part by the Destination & Travel Foundation, a combined effort of the U.S. Travel Association and Destination Marketing Association International.

The mission of the Foundation is to enhance the destination marketing and travel professions through research, education, visioning and development of resources and partnerships for those efforts.

Oxford Economics' analysis covered 14 economic sectors over a span of 13 years. Care was taken to control for other contributing factors to business growth and productivity. The findings were verified through a combination of three separate surveys of corporate executives and business travelers and a broad review of related research, the group noted.
The findings were also reviewed by Dr. Asher. This approach was used by Oxford Economics in previous analyses on European travel.

The analysis should provide some justification for grounded road warriors to pack their bags as the economy brightens.

After a year of slashing ticket prices to keep business and leisure travelers on jetliners, airlines can look forward to a modest recovery in 2010 as business travelers begin returning to the skies.

American Express Business Travel Monitor predicts that international business class airfares will rise 1-6% next year. Domestic airfares are expected to be flat, but could increase as much as 5%. American Express cited potential GDP growth for driving the higher ticket prices, helped by the reduction in airline capacity and pent-up demand among businesses that slashed travel spending this year, putting off customer meetings.

And American Express said 64% of the road warriors who did fly in 2009 were crammed into the coach cabin, compared to only about 50% seen in past years.

The drastic drop in premium travel has eroded the prime source of profit at carriers like British Airways, which got 45% of its revenue last year from the high rollers and business travelers that filled only 13% of the seats it sold.

Carriers are seeking to limit the damage from the desertion of business travelers who have moved to the back of the plane.

Delta Air Lines, for example, now offers more amenities, including wider seats, bigger and better meals and high-tech toys (like wireless Internet access) to business customers flying from New York to Los Angeles and San Francisco, as part of expanded transcontinental BusinessElite service. The U.S. carrier has added full flat beds on flights between New York's Kennedy International and London Heathrow. And Delta has enhanced its SkyMiles frequent flier program, allowing preferred customers to roll over miles earned above their qualification status during the year.

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