WASHINGTON -- Motorcoach operators and industry suppliers who remain undecided whether to attend or exhibit at UMA Motorcoach Expo in late February may want to consider new research that claims to establish the first clear link between business travel and business growth.

According to the study by the global research firm Oxford Economics, for every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits.

"This study shows that not all spending cuts are smart cuts," said Adam Sacks, managing director of Oxford Economics. "When companies reduce their travel budgets, there are negative consequences that we can now quantify, in terms of lost revenue and (reduced) profit growth, and in terms of giving competitors a distinct advantage."

The Oxford Economics study marks the first time the return on investment of business travel has been successfully measured, say the researchers.

Negative impact

The study found that curbing business travel can have a strong negative impact on company profits. 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 earnings to recover.

"In order to grow, businesses have to invest," said Roger Dow, president and CEO of the U.S. Travel Association. "This research shows that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make."

Dr. Martin A. Asher, adjunct professor of finance at the Wharton School at the University of Pennsylvania, said that in tough economic times many business executives have an understandable short-run focus on managing costs.

"The (Oxford Economics) report points out the less visible -- but significant -- long-term benefits resulting from business travel, such as partnership building and new business opportunities," said Asher.

"Increased business travel in this economy can actually increase sales and reduce the financial decline companies might otherwise suffer."

'In-person's impact

The research found that roughly 40 percent of prospective customers are converted to new customers with an in-person meeting, compared to 16 percent without such a meeting. The study also found that returns from participating in conferences and trade shows ranged from $4-$5.99 per dollar invested.

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.

Oxford Economics analysis was comprehensive, covering 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, plus a broad review of related research.

The findings were independently reviewed by Dr. Asher of the Wharton School.