Passage 12

Business travel dropped dramatically last year. The US Travel Association says roughly $215 billion were spent on business travel in 2009, down from $244 billion in 2008. The travel industry predicts an increase this year. There was a 1.5% increase in spending on travel and entertainment during the first quarter of 2010 compared with that period last year, says Mike McCormick, executive director of the National Business Travel Association, or NBTA, and a 2.8% increase during the first quarter of 2010 over the fourth quarter of 2009.

And that travel can spur more—for competitive reasons. "The stabilizing and growing economy puts companies, competitors, back out on the road—especially the sales departments," says Kevin Mitchell of the Business Travel Coalition. "So you can't really sit back like you were able to comfortably do through most of 2009, comforted in the knowledge that most of your competitors were scaling travel way back as well."

Some business-travel analysts say that for businesses to profit and grow, travel is essential. An NBTA study conducted by HIS Global Insight determined that for every dollar spent on corporate travel, the average business would see $15 in profits. "The only way to grow sales is to go out and get them," McCormick says. "All it takes is for a company to lose that piece of business because their competitor showed up and they didn't, and they're back on the road."

Ultimately when evaluating whether to hit the road, corporate travel experts say, companies are trying to figure if the potential for revenue in the near future or down the line is greater than the cost of the trip. Such decisions are often as much art as science. They depend on many factors, including a company's priorities, the service or product it's selling, and the status of a particular client relationship and transaction. "It's very much down to individual companies and what they prioritize," says Eric Bausman of Carlson Wagonlit Travel, a global firm that helps companies manage corporate travel programs.